Texas Senate Bill SB474

Texas 2019 - 86th Regular

Caption

Relating to the eligibility of land secured by a home equity loan to be designated for agricultural use for ad valorem tax purposes.

Impact

The main effect of SB474 is that it allows land secured by home equity loans to qualify for agricultural designation if it meets stipulated requirements. Previously, this classification might have been more restrictive, inadvertently hindering agricultural landowners from benefiting from tax incentives associated with agricultural use. By ensuring that more land can be classified as agricultural, it could lead to increased exemptions or reduced property tax obligations for eligible property owners, impacting local tax revenues.

Summary

SB474 seeks to amend the Texas Tax Code regarding the classification of land used for agricultural purposes. Specifically, it revises the eligibility criteria for land that is secured by a home equity loan to be designated for agricultural use. The bill aims to provide clarity on what qualifies as agricultural use for ad valorem tax purposes, thus directly impacting landowners who might be utilizing their properties for agricultural endeavors.

Contention

There may be discussions surrounding the implications of this bill, particularly concerning how it affects property values and local government revenues derived from property taxes. Stakeholders in the agricultural sector may support the bill due to the potential for increased financial relief, while local governments may express concern over the perceived reduction in tax income, as more properties would qualify for lower taxation rates under the new provisions. Furthermore, the bill's reception could hinge on its interpretation and the practical challenges faced by landowners in proving eligibility.