Court Opinion

ID: 5068090
Source: CourtListenerOpinion
Date Created: 2021-10-01 10:16:17.914531+00
Date Added: 2024-06-11T08:19:42.590917
License: Public Domain

Appellants brought suit for declaratory judgment to have the trial court construe TEX.TAX CODE ANN. sec. 23.78
(Vernon 1982). They own land in the Spurger Independent *Page 609 
School District (the School District) which was appraised by the chief appraiser of the Tyler County Appraisal District according to its timber use value for the tax years 1982-84 as required by the Texas Property Tax Code (the Code). The chief appraiser certified both the market value and the timber use value of each tract to the tax assessor of the School District for each of those years.
The chief appraiser assigned a "timber use value" by "category of the land" according to the soil type, soil capability, general topography, weather, location and other factors. Some of the tracts in question contained more than one category of timber growing land. Some categories of land were appraised to be more valuable per acre for the production of timber than others. For example, pine producing land was valued higher than land producing hardwood.
The state legislature instituted the category of land approach to assessing land based on its timber use value as part of the Code which became effective in 1982. Rather than taxing timberlands at 100% of their market value as mandated in the Code for all non-agricultural lands, it opted for an income valuation scheme provided the assessed value under that approach did not fall below the land's 1978 market value. If the value did fall below the 1978 assessment, the legislature provided for a substitution of the timber use value by the 1978 market value. Section 23.78 of the Code was the mechanism for establishing this floor value. It provides:
 Minimum Taxable Value of Timber Land The taxable value of qualified timber land appraised as provided by this subchapter may not be less than the appraised value of that land for the taxing unit in the 1978 tax year, except that the taxable value used for any tax year may not exceed the market value of the land as determined by other generally accepted appraisal methods. If the appraised value of timber land determined as provided by this subchapter is less than a taxing units appraised value of that land in 1978, the assessor for the unit shall substitute the 1978 appraised value for that land on the unit's appraisal roll.
Appellants' lands were previously rendered by parcels to the tax assessor of the School District in 1978. Dividing the total number of acres in each parcel into the total value at which the land was rendered in 1978 yields an average per acre value of one hundred twenty dollars ($120.00). For the hardwood producing areas in those parcels, the average price per acre, under the timber use value figures for the tax years 1982-84, falls below $120.00 per acre.
In determining the value upon which qualified timber use lands were to be taxes for 1982-84, the tax assessor substituted $120.00 per acre as the value of any acreage within a parcel of land whose timber use value fell below this 1978 figure. The evidence at trial showed, for instance, that one appellant owned a 1,448.2 acre tract with a 1978 tax roll value of $173,780.00. Under the 1984 timber use valuation, that same parcel appreciated in value to $298,470.00. After the tax assessor's substitution, its value further appreciated to $330,840.00, an additional increase of $32,370.00. This practice was followed by the tax assessor on all of the parcels the subject of this suit.
Appellants' first point of error asserts the trial court incorrectly held that the reference in section 23.78
of the Code to "that land" meant any portion of a parcel of qualified timberland. The appellee argues that this reference permits substitution of the 1978 average appraised value per acre of $120.00 for any acreage within a category of land which was appraised at a lower timber use value. To the extent that the same or substantially the same parcel on the 1978 tax rolls is reappraised for its timber use value, we hold that the reference in section 23.78 to "that land" refers to the entire parcel rather than a portion of the parcel. Point of error number one is sustained.
Appellants' second point of error is also well taken. We hold the trial court *Page 610 
erred in construing section 23.78 to require the tax assessor to substitute the 1978 average per acre appraised value for any part of a parcel of qualified timberland that has a lower timber use value under the category of land method of appraisement. The legislature did not intend such a substitution when the same or substantially the same parcel is reappraised for its timber use value. In such a case, a parcel's floor value under section 23.78 of the Code must be determined by reference to its total parcel value on the 1978 tax rolls.
The evidence introduced at trial established that the legislature intended section 23.78 to establish a minimum taxable value below which the taxable value of timberland, qualified for valuation according to its usefulness in producing timber, would not be allowed to fall. The evidence also showed that legislators were concerned that some taxing units might suffer a serious decrease in their tax bases in the absence of such floor values.
The evidence also revealed that the method by which the School District's assessor determined when a substitution was called for and what value was to be substituted on the appraisal role often resulted in an appraised value for the current tax year which actually exceeded the appraised value of the same land in 1978. As shown, under the assessor's method, the application of section 23.78 results in an increase in the appraised value of some qualified timberland as compared to its appraised value in 1978. The School District's base was actually increased due to its application of the "floor" in section 23.78. The legislature did not intend this result.
The Code itself is further evidence that the legislature did not intend that an assessor use such a method in applyingsection 23.78. Under the Code, the chief appraiser is to appraise qualified timberland according to the "category of the land" using accepted income capitalization methods.TEX.TAX CODE ANN. sec. 23.73(a) (Vernon 1982). The chief appraiser is also directed to determine the market value of such land and record both the market value and the appraised value in the appraisal records. TEX.TAX CODE ANN. sec.23.73(c) (Vernon 1982). Then, after the appraisal records are approved by the Appraisal Review Board, the chief appraiser must certify to the tax assessor for each taxing unit in the district that part of the appraisal roll that lists property taxable by the unit. TEX.TAX CODE ANN. sec. 26.01(a)
(Vernon Supp. 1986).
There is no direction in the Code that the chief appraiser send any records regarding the number of acres within a parcel of timberland which is found to be within a particular "category of the land" to an assessor. Similarly, the Code does not direct the appraiser to certify the value placed on any such category of land to the assessor. If the legislature had intended section 23.78 to authorize the practices here in question, the assessor would have to receive such information to determine when a substitution is called for.
Therefore, the legislature intended that when the same or substantially the same parcel, as was appraised in 1978, has been appraised for its timber use, section 23.78
allows the assessor to substitute its 1978 appraised value if its total timber use value is less than its total appraised value in 1978. Where a particular tract of land is not the same during a tax year as a tract for which there is a 1978 appraised value on the tax records, a somewhat different problem arises. It presents itself in this case because it is not clear that the parcels reassessed in the tax years 1982-84 are identical to the parcels on the School District's 1978 tax rolls.
 Appellants' third point of error contends:
 The trial court erred in holding that ad valorem taxes of the respective appellants for the tax years 1982 and 1983 have not been paid in full and that the taxes for 1984 as billed by appellee Spurger ISD to the respective appellants should be paid as billed.
In response to questions from this court during oral argument, appellees stated that all of the parcels of qualified timberland involved in this case were, in effect, the *Page 611 
same parcels for which the School District tax records show an appraised value for the 1978 tax year. However, appellant stipulated in writing in the trial court as follows:
 9. The parcels listed on the tax rolls of Spurger Independent School District in 1978 for each plaintiff are also listed for each plaintiff on the 1982, 1983 and 1984 tax rolls of Spurger Independent School District, with only the following exceptions:
 (1) the acreage change (sic) because of resurvey;
 (2) the acreage changed because part of the land was conveyed away; or
 (3) the tract was not owned by that plaintiff in one or more of such years.
This stipulation indicated that for some of the tracts involved there may be no appraised value reflected on the 1978 tax records. If the parcels are substantially the same, there would be no error in using their substantial equivalence to compare the total parcel values for the tax years 1982-84 with the parcel values on the District's 1978 tax rolls for the purpose of substitution under section 23.78. If the parcels are not substantially the same, however, the assessment must not be based on the acreage averaging method the assessor used to establish the 1978 $120.00 per acre floor value. The state constitution mandates more exacting proof of the 1978 market value in such cases.
TEX.CONST. art. VIII, sec. 1, provides, in part:
 All real property . . . shall be taxed in proportion to its value, which shall be ascertained as may be provided by law.
The term "value" as used in article VIII, section 1
of the constitution means the reasonable cash market value.See, Lively v. Missouri K. T. Ry. Co. of Texas, 102 Tex. 545,120 S.W. 852 (1909); Atlantic Richfield Co. v.Warren Independent School District, 453 S.W.2d 190
(Tex.Civ.App. — Beaumont 1970, writ ref'd n.r.e.);Parker County v. Spindletop Oil and Gas Co., 612 S.W.2d 944
(Tex.Civ.App. — Fort Worth 1981), rev'd onother grounds, 628 S.W.2d 765 (Tex. 1982).
If a tract of land is not substantially the same as that for which a taxing entity's 1978 records show an appraised value, it would be unconstitutional to arbitrarily substitute the 1978 value of what was, at least in part, not the same land as the tract upon which the taxes are being assessed in the current tax year. This is especially the case when proof of the 1978 market value can be developed at trial for any portion of a parcel whose timber use value was determined for 1982-84. The requirement of such proof precludes an appraisal method such as the one used in this case that resulted in the total value for an entire tract exceeding the total value at which it was appraised in 1978. It facilitates the substitution envisioned by section 23.78 by furnishing an accurate 1978 market value for a particular piece of land for comparison with its timber use value. The third point of error is sustained.
The cause is reversed and remanded to the trial court for further proceedings not inconsistent with this opinion.
REVERSED AND REMANDED.