The Texas Constitution and Tax Code provide that certain kinds of farm and ranch land be appraised based on the land's capacity to produce agricultural products (productivity value) instead of at market value. Land owners can apply for special appraisal based on the property's productivity value. The land's ability to produce agricultural or timber products determines the productivity value, which is usually lower than market value. Land used to manage wildlife may also qualify for special use appraisal.
The Comptroller's Manual for the Appraisal of Agricultural Land (PDF) explains the eligibility requirements and the appraisal procedures for agricultural land, as provided by Tax Code Chapter 23, Subchapters C and D, and is adopted by the Texas Comptroller of Public Accounts under Comptroller Rule 9.4001 as required by Tax Code Section 23.52(d).
Property owners may qualify for agricultural appraisal if land meets the following criteria:
The application for special appraisal as land qualified open-space agricultural use is Form 50-129, Application for 1-d-1 (Open-Space) Agricultural Use (PDF). The application for special appraisal of land based on its capacity to produce agricultural products is Form 50-165, Application for 1-d Agricultural Appraisal (PDF). The application for special appraisal for ecological laboratories is Form 50-166, Application for Open Space Land Appraisal for Ecological Laboratories (PDF).
Tax Code Section 6.12 requires chief appraisers, with the advice and consent of the appraisal district board of directors, to appoint an agricultural appraisal advisory board (AAAB) of at least three members to help improve communications between the farming and ranching community and the appraisal district.
To be eligible to serve on the AAAB, the member must have lived in the appraisal district at least five years; own land that qualifies for 1-d, 1-d-1 or qualified timberland appraisal in the appraisal district; and not be an appraisal district officer or employee.
AAAB members serve for two-year staggered terms. When making the initial AAAB appointments, the chief appraiser must appoint one-half of the members to one-year terms if the board has an even number of members. If the AAAB has an odd number of members, the chief appraiser must appoint one less than a majority to one-year terms.
The AAAB's function is to advise the chief appraiser on major issues dealing with agricultural and timber appraisal, such as net to land ratios, degree of intensity standards and other agricultural use and appraisal issues. The chief appraiser calls AAAB meetings and must call at least one meeting each year. AAAB members are not entitled to compensation for their service.
If land receiving an agricultural appraisal changes to a non-agricultural use, the property owner who changes the use will owe a rollback tax. The rollback tax is due for each of the previous three years in which the land got the lower appraisal. The rollback tax is the difference between the taxes paid on the land's agricultural value and the taxes that would have been paid if the land had been taxed on its higher market value. Owners with land qualifying under Subchapter C, or 1-d, will incur interest in addition to the rollback tax upon selling the property or discontinuing agricultural use.
Exceptions to the rollback tax for change of use may include the following if they meet certain criteria:
Productivity value for timberland is based on land's ability to produce timber products (productivity value) and is usually lower than market value. The Comptroller's Manual for the Appraisal of Timberland (PDF) discusses the eligibility requirements for timberland to qualify for productivity appraisal and the methodology for appraising qualified timberland, and is adopted by the Texas Comptroller of Public Accounts under Comptroller Rule 9.4011 as required by Tax Code Section 23.73(b).
The application for special appraisal as qualified timberland is Form 50-167, Application for 1-d-1 (Open-Space) Timberland Appraisal (PDF). The application for special appraisal as restricted use timberland is Form 50-281, Application for Restricted-Use Timberland Appraisal (PDF).
The Comptroller's Guidelines for Qualification of Agricultural Land in Wildlife Management Use (PDF) discuss the requirements that land must meet to qualify for wildlife management use to permit special agricultural appraisal, as provided by Tax Code Section 23.521, and are adopted by the Texas Comptroller of Public Accounts under Comptroller Rules 9.2001-9.2005.
Wildlife Management Planning Guidelines and Forms, including the required management plan, and other useful information are available from the Texas Parks and Wildlife Department.