Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
SB1979 by Schwertner (Relating to liability for the additional tax imposed on land appraised for ad valorem tax purposes as agricultural land if the use of the land changes as a result of a condemnation.), As Introduced
No significant fiscal implication to the State is anticipated.
The bill would amend Chapter 23, Subchapter C, of the Tax Code, regarding land designated for agricultural use, to provide that if additional taxes are due on land qualified for agricultural-use appraisal because the land has been diverted to a non-agricultural use as a result of a condemnation, the additional taxes and interest imposed by this section are the personal obligation of the condemning entity and not the property owner from whom the property was taken.
The section of the Tax Code to be amended (Section 23.46) is under Subchapter C of the Tax Code, which is very rarely used by taxpayers to qualify land for special agricultural use appraisal. Landowners prefer to qualify land under the more recently adopted Subchapter D of this chapter for special open space appraisal because it is much easier to qualify. Subchapter C requires that income from agriculture be the landowner's primary source of income and Subchapter D does not, among other differences.
Because the bill's imposition of the additional taxes and interest due on qualified agricultural land on the condemning entity and not on the property owner is under Subchapter C, and very little land is qualified under that subchapter, the bill's cost would not be significant.
The bill would take effect September 1, 2017.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.