. . 

The Attorney General of Texas 

December 31, 1982 

MARK WHITE 

Attorney General 

Supreme Court Building 

P. 0. BOX 12546 

Austin. TX. 76711. 2546 

51214752501 

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An Equal Opportunity/ 

Affirmative Action Employer 

Honorable Mark M. Humble 

Milam County Attorney 

County Courthouse 

Cameron, Texas 76520 

Opinion No. ?lW-583 

Re: Constitutionality of tax 

exemption for nursery products 

in section 11.16 of the 

Property Tax Code 

Dear Mr. Humble: 

You ask whether the ad valorem tax exemption for nursery products 

set forth in section 11.16 of the Property Tax Code is constitutional. 

We conclude that it is. 

Section 11.16 of the Property Tax Code provides the following in 

pertinent part: 

(a) A producer is entitled to an exemption 

from taxation of the farm Droducts that he 

produces and owns. A nursery pioduct. as defined 

by Section 71.041, Agriculture Code, is a farm 

product for purposes of this section if it is in a 

growing state. (Emphasis added). 

Section 71.041 of the Agriculture Code contains the following 

definition: 

'Nursery product' includes a tree, shrub, vine, 

cutting, graft, scion, grass, bulb, or bud that is 

grown for, kept for, or is capable of, propagation 

and distribution for sale. (Emphasis added). 

Section 11.16 was adopted in conformity with article VIII, section 19 

of the Texas Constitution which provides: 

Farm products... in the hands of the producer, and 

family supplies for home and farm use, are exempt 

from all taxation until otherwise directed by a 

two-thirds vote of all the members elect to both 

houses of the Legislature. 

p. 2162 
.- 

Honorable Mark M. Humble - Page 2 (Mw-583) 

The legislature may not authorize that which the constitution 

prohibits, Maher V. Lasater, 354 S.W.Zd 923 (Tex. 1962). 

Specifically, the legis: 

pioperties - 

lature is without power to add to the list of 

entitled -to exemption under the constitution, Leander 

Independent School District V. Cedar Park Water Supply Corporation, 

479 S.W.Zd 908 (Tex. 1972); City of Amarillo V. Amarillo Lodge No. 

731, A.F. and A.M., 488 S.W.Zd 69 (Tex. 1972), and any attempt to do 

so is void. City of Amarillo V. Love, 356 S.W.Zd 325 (Tex. Civ. App. 

- Amarillo 1962, writ ref’d n.r.e.); Dickison V. Woodmen of the World 

Life Insurance Society, 280 S.W.Zd 315 (Tex. Civ. App. - San Antonio 

1955. writ ref’d). In this instance, the issue is whether “nursery 

prod&ts,” as defined by section 71.041, Agriculture Code, constitute 

“farm products” within the meaning of article VIII, section 19 of the 

Texas Constitution. If they do, the statute is constitutional. If 

they do not, the statute attempts to add to the list of properties 

entitled to exemption under the constitution and is void. While the 

authority is not clear and unambiguous, we conclude that the courts 

would be likely to hold that “nursery products” are “farm products” 

and that the statute is constitutional. 

It has been suggested that Kirby Lumber Corporation v. Hardin 

Independent School District, 351 S.W.Zd 310 (Tex. Civ. App. - Waco 

1961. writ ref’d n.r.e.) is controllina. We disagree. The court 

therein declared that timber grown on --II tree farms” does not fall 

within the ambit of article VIII, section 19. Relying on the 

principles that constitutional provisions must be construed in the 

light of conditions existing at the time of adoption and that it does 

not lie within the power of the legislature to change their meaning or 

enact laws in conflict therewith, Jones V. Ross, 173 S.W.Zd 1022 (Tex. 

1943); Travelers’ Insurance Company v. Marshall, 76 S.W.Zd 1007 (Tex. 

1934), the court declared: 

In our opinion appellant’s timber here involved 

is not included in the constitutional exemption of 

‘farm products.’ We feel certain it was not 

within the contemplation of the framers of the 

provisions and the people who adopted it. In 1879 

Texas was in the throes of an economic depression, 

and apparen;t;tintended the exemption to be 

temporary otherwise directed by a 

two-thirds vote’ of the Legislature. See 

Interpretive Commentary, Vernon’s Ann. Tex. 

Const., 570. Texas citizens of that day, not far 

removed from frontier and pioneer status, 

considered timber and forests as areas to be 

cleared before the pursuits of husbandry could be 

engaged in. It would have been incredible, then, 

to call trees ‘farm products.’ We think they are 

. . 

p. 2163 
Honorable Mark M. Humble - Page 3 (MW-583) 

not such now, within the meaning of the 

Constitution. 

351 S.W.Zd at 312. 

At most, the Kirby case stands for the proposition that, 

regardless of whether "the application of scientific forestry 

practices to an established stand of timber," i.e. a lumber operation 

commonly referred to as "tree farming," would properly be considered 

"farm products" now, it clearly was not so considered in 1879. But 

the case offers us no guidance in determining whether section 11.16 is 

constitutional, because a lumber operation as contemplated by Kirby 

does not meet the threshold requirement of section 11.16 of the 

Property Tax Code. A tree as part of a lumber operation is not "grown 

for, kept for, or is capable of, propagation and distribution for 

sale." Aericulture Code 571.041. A nursery is defined as "a nlace 

where trees, shrubs, vines, etc., are propagated for transplanting or 

as use for stalks for grafting." Hill V. Georgia Casualty Company, 45 

S.W.Zd 566, 567 (Tex. 1932). (Emphasis added). Timber, on the other 

hand, denotes "trees of a size suitable for manufacture into lumber 

for use of building and allied purposes and does not include saplings, 

brush, fruit trees or trees suitable only for firewood or decoration." 

M & I Timber Company V. Hope Silver-Lead Mines, Inc., 428 P.2d 955, 

955 (Idaho 1967). 

The word 'timber' has been generally defined as 

meaning growing trees suitable to be used for the 

construction of building, tools, utensils, 

furniture, fences, ships, etc. This concept of 

timber distinguishes it from saplings, and 

undergrowth, fruit trees, and trees suitable only 

for firewood or cordwood, or for decoration. 

Melder V. Phillips Pipe Line Company, 539 S.W.Zd 208, 210 (Tex. Civ. 

APP. - Austin 1976, writ ref'd n.r.e.). See also Cummer-Graham 

Company V. Maddox, 285 S.W.Zd 932 (Tex. 1956). Because the court in 

Kirby was not concerned with nurseries, it offers us little guidance. 

A more helpful case is City of Amarillo V. Love, a. There 

the court held that a taxpayer who engaged in a general retail (and 

some wholesale) nursery business for profit was not entitled to claim 

an ad valor-em tax exemption under article VIII, section 19. The 

taxpayer received his nursery stock from large nursery plantations or 

farms and replanted the stock in order to preserve and continue the 

life of the plants. Prior to the time that the nursery stock was 

removed from the plantations or farms, they were in their "first 

growth stage." During the time in which the stock was in the 

possession of the taxpayer, they were in their "second growth stage." 

The court held that the taxpayer was not entitled to ad valorem tax 

p. 2164 
Honorable Mark M. Humble - Page 4 (w-583) 

exemption because he was not a "producer" within the meaning of 

article VIII, section 19. 

In our opinion the nursery stock in question 

does not come under the constitutional exemption 

of 'farm products in the hands of the producer.' 

In order to come under the exemption, appellee's 

nursery stock must meet two requirements: first, 

it must be 'farm products' and if so, it must be 

found that appellee is the 'producer.' Under the 

facts and circumstances before us, we do not think 

the nursery stock meets these requirements.... 

The trees and bushes were started by grafting and 

budding on large nursery farms and transferred to 

appellee who conducted its retail and wholesale 

business on several city lots within the City of 

ordinarily used among both business men 

and the general public. Appellee's care and 

treatment of this nursery stock during its 'second 

growth stage' was incidental to its selling the 

stock to the ultimate consumer. It would be a 

strained construction of the applicable 

constitutional language to say the nursery stock 

in the hands of appellee is 'farm products.' 

(Emphasis added). 

356 S.W.Zd at 328. The court held that a person tending nursery stock 

during its "second growth stage" is not a "producer" within the 

meaning of article VIII, section 19. It did not directly address the 

issue as to whether nursery stock in its "first growth stage" is a 

"farm product." However, we believe that our courts, if confronted 

squarely with the issue, would so conclude. 

We find it persuasive that Texas courts in other contexts have 

concluded that nursery products do constitute farm or agricultural 

products. In Brewer V. Central Greenhouse Corporation, 352 S.W.Zd 101 

(Tex. 1961), the Texas Supreme Court held that workers in greenhouses 

were "agricultural laborers" within the meaning of the Fair Labor 

Standards Act, 29 U.S.C. section 201 et seq. The act defined 

"agriculture" to mean "farming in all its branches and among other 

things includes... the production... of any agricultural or 

horticultural commodities.... 29 U.S.C. 9203(f). Admittedly, the 

definition of "agriculture" in the federal act is broad. Yet, in an 

ad valorem taxation case, the Ohio Supreme Court relied in part on the 

case in construing a statute which exempted equipment and machinery 

p. 2165 
Honorable Mark M. Humble - Page 5 (MW-583) 

"used in agriculture" and "agricultural products on farms." In Benken 

v. Porterfield, 247 N.E.Zd 749, 753 (Ohio 1969), the court declared: 

[Tlh= business of planting, cultivating, 

harvesting, and selling flowers and vegetables, 

indoors in greenhouses, or outdoors in lath houses 

or planting beds in the ground, with substances 

being added to the soil to aid and protect the 

growing process, is agriculture. 

Again, in another context, Texas courts have held that, for 

purposes of workers' compensation, nursery laborers are "farm 

laborers" within the meaning of the statute. In Hill v. Georgia 

Casualty Company, B. the court stated: "That one engaged in the 

nursery business is engaged in an agricultural pursuit is not to be 

doubted." In Guerrero v. United States Fidelity and Guaranty Company, 

98 S.W.Zd 796 (Tex. 1936), the court affirmed the proposition that 

horticulture constitutes one of the main divisions of agriculture. It 

further noted the distinction discussed in City of Amarillo v. Love, 

E, between raising nursery stock and buying nursery stock for 

resale and placing it in the ground temporarily for preservation. The 

former horticultural practice is a part of agriculture within the 

meaning of the statute; the latter is not. 

While admittedly both of those cases construed a worker's 

compensation statute, we think that it is significant that the supreme 

court of another jurisdiction relied on Hill v. Georgia Casualty 

Company, B. in deciding an ad valorem taxation case. In Boehm v. 

Burleigh County, 130 N.W.Zd 170 (N. D. 1964), the court declared that 

a nursery engaged in growing trees, shrubs, flowers and plants fell 

within the ambit of an ad valorem tax exemption of "all farm 

structures, and improvements located on agricultural lands." The court 

found that the products of a nursery are agricultural products because 

"'agriculture' is sufficiently broad to include 'horticulture."' Id. 

at 176. See also State v. Wertheimer Bag Company, 43 So.Zd 824 (Ala. 

1949) (a sales tax case which relies in part on both Hill v. Georgia 

Casualty Company, supra, and Guerrero v. United States Fidelity and 

Guaranty Company, a); Orendorf v. H. Weber and Sons Company, 140 

A.2d 641 (Md. 1958); Township of Marple v. Lynam. 30 A.2d 208 (Pa. 

Super. Ct. 1943); Hagenburger v. City of Los Angeles, 124 P.2d 345 

(Cal. Dist. Ct. App. 1942); Dye v. McIntyre Floral Company, 144 S.W.Zd 

752 (Ten*. 1940). 

We are persuaded that Texas courts would construe "farm products" 

in article VIII, section 19 of the Texas Constitution to include 

nursery products as defined in section 71.041 of the Agriculture Code 

and believe that section 11.16 of the Property Tax Code is constitutional. 

p. 2166 
Honorable Mark M. Humble - Page 6 (MW-583) 

SUMMARY 

Section 11.16 of the Property Tax Code which 

exempts from ad valorem taxation farm products, 

including nursery products as defined by section 

71.041 of the Agriculture Code, is constitutional. 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Jim Moellinger 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Patricia Hinojosa 

Bob Lattimore 

Jim Moellinger 

p. 2161