Opinion ID: 1730468
Heading Depth: 1
Heading Rank: 1

Heading: Background and Purpose

Text: The questions can be considered in proper context and perspective by first examining the background and purpose of the constitutional amendment which created the special agricultural use assessment for land owned by natural persons which is designated for agricultural use . . .. [2] For the first one hundred years of its existence, Texas was largely a rural State. By 1965, increased urbanization had caused increased market values on agricultural lands near metropolitan areas due to industrial expansion, residential subdivisions, and speculative buying. Payment of taxes on market value as required by the Constitution of 1876 was discouraging farmers and ranchers from continuing their agricultural uses and was in some instances forcing sales and loss of both land and personnel from the essential business of producing food and fiber. See the Texas Legislative Council Report cited in note 2 and Report to the 62nd Legislature of the Agricultural Land Assessment Study Committee under H.C.R. 8, 61st Leg., Reg. Session. The problem is shared by other states. Agricultural assessment aid with assessments based on value for agricultural uses rather than market values, has been extended to farm and ranch lands in 34 states, with proposed legislation pending in at least two other states. [3] Most of the other states do not have the type of bona fide farmerrancher safeguard that is a part of the Texas enactment, but many require that the land produce a minimum annual gross income. Only Texas and Alaska appear to consider income of the landowner in determining the land's eligibility for the agricultural assessment. The Alaska statute, enacted in 1974, follows many provisions of the Texas statute, but it is less cumbersome. For instance, its bona fide farmer provision requires only that the owner or lessee must be actively engaged in farming the land, and derive at least 10 percent of his yearly gross income from the farm use land, with a specific exception in the event of a crop failure. [4] It is obvious that the Texas primary occupation and source of income requirement was intended to prevent the lower agricultural assessment from being abused by allowing land investors and speculators to reduce their assessments and taxes simply by planting a crop or running livestock on the land. The provision also has the salutary purpose of encouraging not only that agricultural and ranch land be continued in production but that farmers and ranchers remain in the business of such production. So long as it is thus interpreted, we do not believe the classification will encounter the possible constitutional objections conditionally raised by Petitioner Gragg. The provision has been so interpreted in at least two Texas cases, San Marcos Consolidated Independent School District v. Nance, 495 S.W.2d 335 (Tex.Civ. App.1973, writ ref. n.r.e., 502 S.W.2d 694, 1974), and Klitgaard v. Gaines, 479 S.W.2d 765 (Tex.Civ.App.1972, writ ref. n.r.e.). See also Opinion of the Attorney General of Texas, M-1271, November 28, 1972.