The Attorney General of Texas 

November 29, 1917 

The Honorable Johnny W. Actkinson Opinion No. H-1098 

Parmer County Attorney 

P/O. Box 286 

Farwell, Texas 79325 

The Honorable Oscar H. Mauzy 

Chairman, Senate Committee on 

Education 

Senate Chamber 

State Capitol 

Austin, Texas 78711 

Re: Constitutionality 

of House Bill 22 permitting an income capitalixation valuation 

of open space land used 

for agricultural purposes. 

Dear Mr. Actkinson and Senator Mauzy: 

You have asked whether House Bill 22 of the 65th 

Legislature, Acts 1977, 65th Leg., ch. 318, at 847, codified as article 7150k, V.T.C.S., can be given effect 

without the people voting on a companion constitutional 

amendment. Each of you has submitted a brief with your 

request and each has concluded that a constitutional 

amendment is required before the bill can be effective. 

In Attorney General Opinion H-1022 (1977). which was 

issued on July 6, 1977, we answered a similar inquiry from 

our State legislative leadership in the negative. Inasmuch 

as the controlling constitutional provisions and the controlling judicial decisions remain the same, our answer 

must remain the same. Once again we will set forward those 

controlling provisions and decisions. 

The constitutional questions surrounding House Bill 

22 involve article 8, section 1 of the Texas Constitution 

which provides in part: 

Taxation shall be equal and uniform. 

All property in this State, whether 

owned by natural persons or corporations, other than municipal, shall 

be taxed in proportion to its value, 

which shall be ascertained as may be 

provided by law. 

p. 4504 
The Honorable Johnny W. Actkinson 

The Honorable Oscar H. Mauzy - Page 2 (H-1098) 

Article 8, section l-d of the Constitution provides for special 

assessment of certain agricultural land, but there is no dispute that House Bill 22 provides for a broader program than that 

authorized by article 8, section l-d. 

When House Bill 22 was introduced it obviously was the 

view of the sponsors that a constitutional amendment would be 

necessary to authorize this broader program of appraisal of 

open space land. The bill provided that it would become effective only if and when the companion constitutional amendment 

was adopted. In fact, the contingent effective date provision 

was in House Bill 22 as it passed the House and Senate and as 

it was referred to conference committee. It was only on May 25, 

1977, when the conference committee reported its version of 

the bill, that House Bill 22 emerged without being explicitly 

dependent on the passage of the constitutional amendment. House 

Journal, 65th Leg., R.S., at 3922 (May 25, 1977). The proposed 

constitutional amendment was defeated in the House of Representatives when it lacked one vote of obtaining the one hundred votes 

necessary for passage. House Journal, 65th Leg., R.S., at 3923 

(May 25, 1977). The vote was 99 yeas, 48 nays and 3 not voting. 

Since House Bill 22 had, therefore, been passed but the 

companion constitutional amendment had been defeated, the legislative leadership requested an opinion prior to the special 

session on the constitutionality of a program of valuation of 

agricultural land on a basis other than market value. While 

the opinion request did not specifically mention House Bill 

22, the same constitutional issue raised by that legislation 

was involved. Attorney General Opinion H-1022 (1977) was issued 

on July 6, 1977, and stated that a constitutional amendment 

would be required before the Legislature could provide for the 

valuation of one type of property at a smaller percentage of 

market value than other types of property. Thereafter, certain 

legislators and this office, all of whom had supported the program sought to be enacted by House Bill 22, urged that the subject of such a constitutional amendment be included in the call 

of the special session which convened on July 11, 1977. However, 

the subject was not included by the Governor in the proclamation 

calling the special session. 

In spite of this clear history, additional arguments have 

been advanced in an effort to uphold the bill without the necessity of a constitutional amendment. The arguments can be grouped 

under two general headings. First, it is argued that such an 

amendment would not be necessary because the income capitalization method of valuation provided by House Bill 22 is merely a 

means of ascertaining market value. We believe House Bill 22 

P. 4505 
The Honorable Johnny W. Actkinson 

The Honorable Oscar H. Mauzy - Page 3 (H-1098) 

indicates on its face that something other than market value 

is produced by the formulas set out in the bill. While an income capitalization method of valuation may sometimes be useful 

in determining market value, it is clear that House Bill 22 

is designed to produce a valuation which does not represent 

market value. The bill provides that the value produced by the 

income capitalization method will be less than market value. 

The assessor is required to record both market value and an 

income capitalization value. He is also required to roll back 

the assessments for the four years prior to a change in the use 

of agricultural land and to collect the taxes for those years 

as if they had been levied on market value assessments. Additionally, the legislative debates leave no doubt that the 

legislation is designed to produce valuations which do not 

reflect market value. 

The other argument is that an amendment is unnecessary 

because the Constitution gives the Legislature broad authority 

to permit valuation of property on a basis other than market 

value. This argument has been rejected by our highest legal 

authority on State constitutional issues. The Supreme Court 

of Texas has addressed the requirement of article 8, section 1 

of the Constitution. The court said: 

Article 8, 9 1, of the Constitution, contains this language: "All property in 

this state, whether owned by natural persons 

or corporations, other than municipal, shall 

be taxed in proportion to its value, which 

shall be ascertained as may be provided by 

law." The rule announced by that provision 

is "equality and uniformity." To secure 

this "uniform and equal" taxation, the same 

sentence prescribes that the property of 

all persons and corporations, other than 

municipal, "shall be taxed in proportion 

to its value, which shall be ascertained as 

may be provided by law." This is a clearly 

expressed purpose, that the officers charged 

with the assessment of property shall in 

the manner prescribed by law ascertain its 

value. "The value of the property is to 

be determined by what it can be bought and 

sold for." New York State v. Barker, 179 

U.S. 287, 21 Sup. Ct. 124, 45 L. Ed. 194. 

If it means full market value when applied 

to the intangible assets of a railroad 

company, it means the same thing when 

applied to land, horses, etc. The standard of uniformity prescribed by the 

p. 4506 
The Honorable Johnny W. Actkinson 

The Honorable Oscar H. Mauzy - Page 4 (H-1098) 

Constitution being the value of the property, taxation cannot be in the same proportion to the value of the property unless 

the value of all property is ascertained by 

the same standard. 

Lively v. Missouri, K. & T. Ry. Co. of Texas, 120 S.W. 852, 

856 (Tex. 1909) (Emphasis added). 

On numerous occasions Texas courts have specifically 

indicated that it is settled that the Texas Constitution, unless 

amended by the people to provide otherwise, requires appraisal 

on the basis of market value. Rowland v. C 

S.W.2d 756, 760.(Tex. Comm'n App. 1928, jd 

Richfield Co. v. Warren Ind. Sch. Dist., 4 

(Tex. Civ. App. -- Beaumont 1970, writ ref'd n.r.e.1; Dietrich 

~~g~3~~~~~~;';'~~~lf~~e~~~."~~;,*A~~,t~-v~~~~~p~'~~6 

S.W.2d 235, 237 (Tex. Civ. App. -- San Antonio 1940, writ ref'd); 

Porter v. Langley, 155 S.W. 1042 (Tex. Civ. App. -- Dallas 1913, 

writ ref'd). See also City of Arlington v. Cannon, 271 S.W.2d 

414 (Tex. 19541; City of Houston v. Baker, 178 S.W. 820 (Tex. 

Civ. App. -- Galveston 1915, writ ref'd); Attorney General 

Opinion H-1022 (1977). 

Laudable as the purposes of House Bill 22 are in lessening 

the severe economic problems facing our farmers and ranchers, 

we are not at liberty to ignore the substantial and long established judicial authority that a constitutional amendment is 

necessary to implement such purposes. Accordingly, it is still 

our opinion, as it was prior to the special session, that to 

bring about the desired purposes of House Bill 22 an amendment 

to the Texas Constitution will have to be proposed by the 

Legislature and approved by a majority of Texas voters. 

SUMMARY 

House Bill 22 of the 65th Legislature 

(article 7150k, V.T.C.S.), which would 

establish a new program of valuing agricultural land on a basis other than 

market value, cannot be placed in effect 

without approval of the companion constitutional amendment by a majority of Texas 

voters. 

P. 4507 
The Honorable Johnny W. Actkinson 

The Honorable Oscar H. Mauzy - Page 5 (H-1098) 

DAVID M. KENDALL, First Assistant 

C. ROBERT HEATK, Chairman 

Opinion Committee 

jst 

p. 4508