BILL ANALYSIS H.B. 1244 By: Guillen Ways & Means Committee Report (Unamended) BACKGROUND AND PURPOSE Texas law allows certain agricultural and open-space land to be appraised at a lower value for property tax purposes. However, when ownership of such land is restructured under the same individual owners, for example by forming an LLC, the new owner, in this example the LLC, must reapply for this special appraisal. The bill author has informed the committee that missing the application deadline can lead to financial penalties that may be burdensome for individuals who continue to use the land under the new ownership structure in the same way as they did under the previous ownership structure. H.B. 1244 ensures that landowners who restructure the ownership of qualified open-space land but don't alter the makeup of the ownership or the use of the land can continue to receive the same tax treatment if they use the land in materially the same way as under the previous ownership structure. It also allows a new owner, in this example the LLC, to file a late application up to one year after acquiring the land without incurring penalties. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS H.B. 1244 amends the Tax Code to establish that the ownership of qualified open-space land that was appraised as agricultural land in the preceding tax year is not considered to have changed for purposes of eligibility for appraisal in subsequent years without a new application if after the ownership of the land is transferred from the former owner to the new owner: the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year; and the use is overseen or conducted by the same individuals who oversaw or conducted that use during the preceding tax year. H.B. 1244 requires the chief appraiser to accept and approve or deny an application for appraisal of qualified open-space land after the deadline for filing the application has passed if the following conditions are met: the land that is the subject of the application was appraised as agricultural land in the preceding tax year; the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year; and the application is filed not later than the first anniversary of the date ownership of the land was transferred from the former owner to the new owner. The bill exempts such an application, if approved, from the late application penalty of 10 percent of the difference between the amount of tax imposed on the property and the amount that would be imposed if the property were taxed at market value. EFFECTIVE DATE January 1, 2026.
BILL ANALYSIS
# BILL ANALYSIS
H.B. 1244
By: Guillen
Ways & Means
Committee Report (Unamended)
H.B. 1244
By: Guillen
Ways & Means
Committee Report (Unamended)
BACKGROUND AND PURPOSE Texas law allows certain agricultural and open-space land to be appraised at a lower value for property tax purposes. However, when ownership of such land is restructured under the same individual owners, for example by forming an LLC, the new owner, in this example the LLC, must reapply for this special appraisal. The bill author has informed the committee that missing the application deadline can lead to financial penalties that may be burdensome for individuals who continue to use the land under the new ownership structure in the same way as they did under the previous ownership structure. H.B. 1244 ensures that landowners who restructure the ownership of qualified open-space land but don't alter the makeup of the ownership or the use of the land can continue to receive the same tax treatment if they use the land in materially the same way as under the previous ownership structure. It also allows a new owner, in this example the LLC, to file a late application up to one year after acquiring the land without incurring penalties.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS H.B. 1244 amends the Tax Code to establish that the ownership of qualified open-space land that was appraised as agricultural land in the preceding tax year is not considered to have changed for purposes of eligibility for appraisal in subsequent years without a new application if after the ownership of the land is transferred from the former owner to the new owner: the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year; and the use is overseen or conducted by the same individuals who oversaw or conducted that use during the preceding tax year. H.B. 1244 requires the chief appraiser to accept and approve or deny an application for appraisal of qualified open-space land after the deadline for filing the application has passed if the following conditions are met: the land that is the subject of the application was appraised as agricultural land in the preceding tax year; the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year; and the application is filed not later than the first anniversary of the date ownership of the land was transferred from the former owner to the new owner. The bill exempts such an application, if approved, from the late application penalty of 10 percent of the difference between the amount of tax imposed on the property and the amount that would be imposed if the property were taxed at market value.
EFFECTIVE DATE January 1, 2026.
BACKGROUND AND PURPOSE
Texas law allows certain agricultural and open-space land to be appraised at a lower value for property tax purposes. However, when ownership of such land is restructured under the same individual owners, for example by forming an LLC, the new owner, in this example the LLC, must reapply for this special appraisal. The bill author has informed the committee that missing the application deadline can lead to financial penalties that may be burdensome for individuals who continue to use the land under the new ownership structure in the same way as they did under the previous ownership structure. H.B. 1244 ensures that landowners who restructure the ownership of qualified open-space land but don't alter the makeup of the ownership or the use of the land can continue to receive the same tax treatment if they use the land in materially the same way as under the previous ownership structure. It also allows a new owner, in this example the LLC, to file a late application up to one year after acquiring the land without incurring penalties.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 1244 amends the Tax Code to establish that the ownership of qualified open-space land that was appraised as agricultural land in the preceding tax year is not considered to have changed for purposes of eligibility for appraisal in subsequent years without a new application if after the ownership of the land is transferred from the former owner to the new owner:
the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year; and
the use is overseen or conducted by the same individuals who oversaw or conducted that use during the preceding tax year.
H.B. 1244 requires the chief appraiser to accept and approve or deny an application for appraisal of qualified open-space land after the deadline for filing the application has passed if the following conditions are met:
the land that is the subject of the application was appraised as agricultural land in the preceding tax year;
the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year; and
the application is filed not later than the first anniversary of the date ownership of the land was transferred from the former owner to the new owner.
The bill exempts such an application, if approved, from the late application penalty of 10 percent of the difference between the amount of tax imposed on the property and the amount that would be imposed if the property were taxed at market value.
EFFECTIVE DATE
January 1, 2026.