AGRICULTURAL APPRAISAL INFORMATION
Until the 1960’s, Texas farm and ranch land was taxed on its market value – the price a buyer would pay for it in a traditional market transaction. The urbanization of Texas meant that farm and ranch land caused value to dramatically increase, especially in developing areas. Even if the farmer or rancher never intended to develop the land, the value increased because it had the potential to be developed in the future.
In 1966, the first Agricultural Appraisal Law was approved. A Constitutional amendment added Section 1-d to Article VIII of the Texas Constitution. Certain kinds of farm land be appraised not at their market value, but at their productivity value – a value based solely on the land’s capacity to produce agricultural products. In many cases, this amendment substantially reduces taxation for lands that qualify under this amendment.
Section 1-d is very restrictive. It applies only to land owned by families or individuals. Agriculture must be the owner’s primary occupation and primary source of income. The procedure for special valuation varied widely in the early years. However, in 1978, voters amended the Constitution again adding a second, more liberal, law applying to the appraisal of agriculture. Section 1-d-1 expanded the eligibility of productivity appraisal. Corporations along with individuals can qualify for special appraisal under 1-d-1. The income and occupation tests don’t apply, and the law will also apply to timberland. In 1979, the amendment took effect and was adopted into Section 23.51-23.57 of the Texas Property Tax Code.
Agricultural appraisal, according to the Texas Property Tax Code, is the responsibility of the Chief Appraiser. However, Section 23.41 and 23.52 direct the Property Tax Assistance Division (PTAD) of the Texas Comptroller Office to develop agricultural appraisal manuals for 1-d and 1-d-1 land and distribute to all Appraisal Districts in the state of Texas. Section 23.52 also directs PTAD to develop procedures for verifying land qualifications for agricultural appraisal.
Information taken from the Property Tax Manual for the Appraisal of Agricultural Land, published by the Property Tax Division of the Texas Comptroller of Public Accounts.
HELPFUL INFORMATION
Manual for the Appraisal of Agricultural Land
Manual for the Appraisal of Timberland
Guidelines for Qualification of Agricultural Land in Wildlife Management Use