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
Untitled Texas Attorney General Opinion
Combined Opinion