The Honorable John E. Fitzgibbon Opinion No. H- 863
Webb County Attorney
P. 0. Box 577 Re: Use of comparable
Laredo, Texas 78040 sales in assessing value
of land used for agri-
cultural purposes.
Dear Mr. Fitzqibbon:
You explain that Webb County is undertaking a project
to reevaluate and reappraise all property in the county.
You ask:
In assessing agriculture and ranching land,
should the tax assessor look at comparable
sales of land in use and to be in use for
aqricalture, farming and ranching purposes
along with other agriculture use factors,
and if comparable sales are to be considered,
is such compatible with Section 1-D of
Article VIII of the Texas Constitution?
First, it is well to note that agricultural land is
evaluated and assessed in the same manner and on the same
basis as other property unless the owner has timely invoked
the provision of section l-d, article 8 of the Texas Con-
stitution, and has shown in a proper administrative or judicial
proceeding that the agricultural use of the land is the business
which constitutes his primary occupation and his primary
source of income. The elements of such proof are discussed
in the very recent case of Gragg v. Cayuqa- Ind. Sch. Dist'.,.
19 Tex. Sup. Ct. J. 347 (June 16,3976). .UGsthe special
Constitutional provision is applicable, then the general
taxation section, article 8, section 1, controls. It reads
in pertinent part:
~3638
The Honorable John E. Fitzgibbon - page 2 (H-863)
Taxation shall be equal and uhiform. All
property in this State, whether owned by
natural persons or corporations, other than
municipal, shall be taxed in proportion
to its value, which shall be ascertained
as provided by law.
This provision has been interpreted as requiring that assessed
valuations be arrived at on the basis of reasonable cash
market value. Whelan -
v. State, 282 S.W.2d 378 (Tex. Sup. 1955).
The special provision regarding agricultural land reads,
in part:
All land owned by natural persons which is
designated for agricultural use in
accordance with the provisions of this
Section shall be assessed for all tax
purposes on the consideration of only
those factors relative to such agricultural
use. Tex. Const. art. 8, j; l-d.
We do not believe this provision requires that assessed
valuations of property designated as agricultural lands be
arrived at on a basis different from "reasonable cash market
value" except to the extent that it requires the assessor to
assume that the highest and best use of the land is an agri-
cultural use. We ascertain nothing in the constitutional
language that would prevent an assessor from considering sales
of comparable land similarly used (and to be used) to help
in arriving at a proper valuation.
In 466 S.W.2d 1 (Tex. Civ. App. -- San
Antonio !k%-=r
, writ ref'd n.r.e.) an attack was made on
certain "agricultural use" valuations which were based on
actual market value, using recent comparable sales (adjusted
to recognize any non-agricultural use factors) as a measure.
In rejecting the attack, the San Antonio Court of Civil
Appeals said: .. . L.
..
p.3639
The Honorable John E. Fitzgibbon - page 3 (H-863)
We do not think the adoption of the Agricultural
Use Amendment completely changes accepted
methods of valuation of property. The Agri-
cultural Use Amendment does no more than
require that agricultural use valuation be
based on the assumption that the land can be
used only for agricultural purposes. Stated
differently, in valuing agricultural land for
tax purposes, it must be assumed that agri-
cultural use represents the highest and best
use to which the land can be put. The possibility
that the land can reasonably be put to a higher
use which would increase its value must be
ignored. -Id. at 7.
Accordingly, we answer your questions in the affirmative.
SUMMARY
Comparable sales of land used for agri-
cultural purposes, if available and if
truly reflective of agricultural use
factors, should be utilized by the tax
assessor, along with other agricultural use
factors, in valuing land pursuant to the
Agricultural Use Amendnent of the Texas
Constitution.
Very truly yours,
General of Texas
C. ROBERT B
jwb
p. 3640