Court Opinion

ID: 4130520
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:05:18.170182+00
Date Added: 2024-06-11T14:31:38.841393
License: Public Domain

THE      ATTORNEY          GENERAL
                               OF     TEXAS

                               September 1, 1988

     Honorable Wilhelmina Delco           Opinion No.   JM-949
     Chairman
     Committee on Higher Education        Re: Whether land designated
     Texas House of Representatives       for "agricultural use"     '
     P. 0. Box 2910                       subject to a five-year rolif
     Austin, Texas 78769                  back provision    when   the
                                          property is acquired under
                                          eminent domain (RQ-1426)

      Dear Representative    Delco:

          You inquire about the recapture or 1'rollback*8of taxes
     on land appraised  for property taxation at its value    for
     agricultural use if the property    is acquired by eminent
     domain. Your question arises from the possibility.that land
     designated for agricultural use will be condemned by the
     city of Austin for a new airport site.

          Article VIII, section   l-d, of the Texas Constitution
     was adopted in 1966 to give an individual engaged in farming
     near urban areas some relief from the increasing property
     tax burden which resulted from the increased market value
     of his land.   Texas Legislative Council, An Analysis      of
     Proposed Constitutional Amendments:  To be voted on November
     8, 1966, at 7.    If land designated for agricultural, use
     under that provision   is later diverted to another use or
     sold, the constitution    provides that the land shall be
     subject to an additional tax, equal to the difference
     between taxes payable under the agricultural use designation
     and the.tax that would have been payable for the preceding
     three years if it had not been specially valued.        Tex.
     Const. art. VIII, § l-d(f): Tax Code § 23.46(c).

          You thus wish to know whether the condemnation of land
     designated for agricultural use according to article VIII,
     section l-d, will bring about a rollback of the agricultural
     use designation and make the individual landowner liable for
     the additional taxes.

          Article VIII, section l-d-l of the Texas Constitution
     authorizes the legislature to provide by general law for
,-

                                        P. 4790
Honorable Wilhelmina   Delco - Page 2    (JM-949)

                                                                   -.

taxation of open-space   land devoted to farm or ranch pur-
poses on the basis~ of its productive capacity.  This provi-
sion was adopted in 1978 to supplement article VIII, section
l-d with a less restrictive    provision.  Texas Legislative
Council, 9 Proposed Constitutional Amendments Analyzed:  For
Election November   7, 1978, at 17.    Property owners whose
land qualified   for taxation under both the earlier agri-
cultural use amendment    and a law enacted under the new
amendment might choose to have their land valued and taxed
according to either provision.   L

     Article VIII, section l-d-l, of the Texas      Constitution
provides in part:

            (a) To promote the preservation of open-
        space land, the leaislature shall urovide by
        aeneral law for taxation of open-space    land
        devoted to farm or ranch purposes      on the
        basis of its productive    capacity and may
        provide bv aeneral law for taxation of open-
        space land devoted to timber production      on
        the basis of its productive capacity.      m
        leaislature  bv aeneral    law mav     Drovide
        eligibility limitations under this section                 __
        and mav imoose sanctions     in    furtherance
        of the taxation policy of this section.
        (Emphasis added.)

Tex. Const. art. VIII, § l-d-l.

     Both sections  l-d and l-d-l of article VIII remove
certain agricultural   property   from the     constitutional
requirement that property be valued for taxation at market
value.  Tex. Const. art. VIII,    f 1; wlinaen     1.S.D
Dunlan, 146 S.W.2d 235 (Tex. Civ. App. - San Antonio    i94::
writ ref'd). The provisions differ in that section l-d sets
out detailed requirements for implementing the agricultural
use designation while section l-d-l is a grant of legisla-
tive authority  and requires legislation to implement      its
provisions.

      Legislation adopted un:ler the authority    of article
VIII, section l-d-l, of the Texas Constitution includes a
five-year rollback provision which applies "[iif the use of
l~and that has been appraised as provided by this subchapter
changes."   Tax. Code 5 23.55(a).   Your request,  therefore,
also raises the issue of whether     a rollback occurs upon
condemnation of land that    has been assessed as open-space
land under the Tax.Code provisions adopted by authority    of      -.

                               P. 4791
     Honorable Wilhelmina   Delco - Page 3    (JM-949)

     article.VIII, section l-d-l, of the Texas Constitution.    See
     Tax Code ch. 23, subch. D.

          The legislature has clearly answered your question   as
     to open-space agricultural land accorded a special valuation
     under article VIII, section l-d-l and the Tax Code provi-
     sions which implement.that provision.  Such land is subject
     to a rollback only if the use changes; sale alone does not
     trigger a rollback.  Section 23.55 of the Tax Code sets out
     sanctions consisting of additional taxes and interest which
     are imposed where there is a change of use.          Section
     23.55(f) of the Tax Code states as follows:

                The sanctions provided by subsection    (a)
             of this section do not apply if the change of
             use occurs as a result of a sale for right-
             of-way or a condemnation.

     Thus, with respect to land valued in accordance with article
     VIII, section   l-d-l and the corresponding     legislation,
     condemnation will not bring about a recovery of taxes for
     the taxing jurisdictions in which the land is located.

          We also conclude, although for different reasons, that
     the owner of land designated    as agricultural  land under
     article VIII, section l-d will not be liable for addi-
     tional taxes when his land is taken in an eminent domain
     proceeding.  Article VIII, section l-d states in part:

             If designated land is subsequently   diverted
             to a purpose other than that of agricultural
             use, or is sold, the land shall be subject to
             an additional tax. The additional tax shall
             equal the difference between   taxes paid or
             payable, hereunder,  and the amount of tax
             payable for the preceding three years had the
             land been otherwise   assessed. Until paid,
             there shall be a lien for additional    taxes
             and interest on land assessed under the
             provisions of this Section.

     Tex. Const. art. VIII,  5. l-d(f). The land becomes    subject
     to the additional tax as of the time of the sale or change
     in use occurs. Thus, if designated    land is sold to a      '-
     vate individual, the new owner is responsible for payingPEke
     taxes. State Property Tax Board, Rollback Provisions       Re-
     searched for Internretation,    Aoolication, Statement   4, 7
.-
     (April 1981) (Questions & Answers).

                                    p. 4792
Honorable Wilhelmina Delco - Page 4      (JM-949)

     If the land had not qualified    for special valuation
with the corresponding tax relief and possibility of re-
coupment of taxes, a lien for all taxes would attach to it
as of the annual assessment date and the property      owner
would be personally liable for the taxes under article VIII,
section 15, of the Texas Constitution,    which provides  as
follows:

        The annual assessment     made upon    landed
        property shall be a special lien thereon: and
        all property,    both real    and   personal,
        belonging to any delinquent taxpayer shall be
        liable to seizure and sale for the payment of
        all the taxes and penalties     due by such
        delinquent; and such property may be sold for
        the payment of the taxes and penalties due by
        such delinquent,  under such regulations    as
        the Legislature may provide.

Tex. Const. art. VIII, 5 15.

     Article VIII, section l-d removes from this provision
the additional tax recovered upon a sale of land designated
for agricultural use. That tax is not a personal liability
of the individual who sold the land, and, as section   23.46
of the Tax Cods shows, the tax lien attaches to the land as
of the sale:

           (d) A tax lien attaches to the land on
        the date the sale or change of use occurs to
        secure payment  of the additional    tax and
        interest  imposed . . . and any     penalties
        incurred.

Tax Code 5 23.46(d).    In answering your question we need
not determine whether land designated for agricultural    use
under article VIII, section l-d has been 81sold88or "diverted
to a purpose other than that of agricultural use" when it is
taken by a,city in an eminent domain proceeding.   The indi-
vidual whose land was condemned will not be responsible   for
paying the additional taxes. You do not ask, and we do not
address, whether a city's action in purchasing or condemning
property can cause a lien to attach to it. But see Tex.
Const. art. XI, 9 9; Efr atv    f D llas v. State 28 S.W.2d
937 (Tex. Civ. App. - Fort Worth 1t30, writ ref#d)* Attorney
General Opinion V-441 (1947) (liens for state and county
taxes which attached to land before city acquired it were
not extinguished by acquisition).

                               p. 4793
     Honorable Wilhelmina Delco - Page 5       (JM-949)

          We therefore advise you that the owners of lands desig-
     nated for agricultural use under article VIII, section  l-d,
     of the Texas Constitution or taxed as open-space land under
     section l-d-l of article VIII are not liable for a rollback
     or recoupment of taxes in the event the land is taken in an
     eminent domain proceeding.

                             SUMMARY
                      If real property that has been valued
                for tax purposes under article VIII, section
                l-d-l, of the Texas Constitution and chapter
                23, subchapter D, of the Tax Code is con-
                demned through eminent domain proceedings,
                no recapture   or rollback of taxes occurs.
                If real property designated as "agricultural
                land" under article VIII, section l-d, of
                the Texas Constitution and chapter 23, sub-
                chapter C, of the Tax Code is sold or con-
                demned, the individual who owned the land is
                not responsible .for paying the additional
                taxes which arise in the event of a roll-
                back.
c.

                                        JIM     MATTOX
                                        Attorney General of Texas

     MARY KELLER
     First Assistant Attorney General

     mu MCCREARY
     Executive Assistant Attorney General

     JUDGE ZOLLIE STEAKLEY
     Special Assistant Attorney General

     RICK GILPIN
     Chairman, Opinion Committee

     Prepared by Susan L. Garrison
     Assistant Attorney General

                                     p. 4794