The Comptroller of Public Accounts adopts amendments to §9.4001, concerning valuation of open-space and agricultural lands, without changes to the proposed text as published in the August 28, 2020, issue of the Texas Register (45 TexReg 6050). The rule will not be republished. These amendments are to reflect updates and revisions to the manual for the appraisal of agricultural land. The amended manual may be viewed at https://comptroller.texas.gov/taxes/property-tax/rules/index.php.

The amendments update and revise the November 2018 (Adopted May 2019) manual for the appraisal of agricultural land. The manual sets forth the methods to apply and the procedures to use in qualifying and appraising land used for agriculture and open-space land under Tax Code, Chapter 23, Subchapters C and D.

Generally, the substantive changes to the manual reflect statutory changes. Updates to the manual throughout reflect changes to the rollback period and interest rate in House Bill 1743, 86th Legislature, 2019. The manual includes a new subsection in the "Cessation of Agricultural Use" section and adds a new section for 1-d to address the specific circumstances for which special appraisal does not end when the land ceases to be devoted principally to agricultural use to the degree of intensity generally accepted in the area, based on changes made in House Bill 3348, 86th Legislature, 2019. The comptroller also adds to the requirements to qualify as an ecological laboratory based on changes made in House Bill 639, 86th Legislature, 2019.

The update includes changes to the section on federal farm programs based on the 2018 Federal Farm Bill. Years throughout the text have been updated in the examples without changes to the values or figures.

Pursuant to Tax Code, §23.52(d), these rules have been approved by the Comptroller with the review and counsel of the Department of Agriculture.

The comptroller received one comment from the public regarding these amendments.

Peggy Wardlaw of Wardlaw Appraisal Group commented that the proposed manual does not specifically address situations where hunting is not allowed due to deed restrictions within the manual's application of Tax Code, §23.51(4). Specifically, Ms. Wardlaw suggested that the manual should state that the hunting income applied to ordinary non-deed restricted land should not be applied when deed restrictions do not allow hunting. The comptroller declines to make this change. Tax Code, §23.51(3), which is addressed on pages 20 and 21 of the manual, accounts for categories of land and allows the chief appraiser to address a situation such as specific deed restrictions. The ability of the chief appraiser to establish land categories or classes based on the factors that influence the productive capacity of the category is not restricted by this manual.

These amendments are adopted under Tax Code, §§5.05 (Appraisal Manuals and Other Materials); 23.41 (Appraisal); and 23.52 (Appraisal of Qualified Agricultural Land), which provide the comptroller with the authority to prepare and issue publications relating to the appraisal of property and to promulgate rules specifying methods to apply and the procedures to use in appraising qualified agricultural and open-space land for ad valorem tax purposes.

These amendments implement Tax Code, §23.41 (Appraisal) and §23.52 (Appraisal of Qualified Agricultural Land).