HBA-RBT H.B. 1360 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1360 By: Hupp Ways & Means 3/9/1999 Introduced BACKGROUND AND PURPOSE Under current law, to qualify for an agricultural appraisal, land must be devoted to agricultural production for at least five of the past seven years. Land that qualifies for an agricultural appraisal incurs an additional tax penalty (rollback tax) if the land's use is changed to nonagricultural use. The penalty is equal to the difference between the taxes imposed on the land for each of the five years before the year in which the change of use occurs and the taxes that would have been imposed on the land if the land had been taxed at market value, plus interest. H.B. 1360 reduces the qualification period for agricultural appraisal from five of the past seven years to one year and changes the rollback tax to three times the difference between the tax imposed on the land in the preceding year and the tax that would have been imposed based on the market value of the land. The purpose of the reduced qualification period is to encourage more people to enter the farming and ranching business, while maintaining a rollback tax to discourage land from being removed from agricultural use. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 23.51(1), Tax Code, to modify the definition of "qualified openspace land" to be land that was used principally for agricultural use or production of timber or forest products for the preceding year, rather than five of the preceding seven years. SECTION 2. Amends Section 23.55(a), Tax Code, to set forth the additional tax imposed when a change occurs in the use of land that has been appraised as provided under this subchapter. Sets forth the computation for the amount of the additional tax. Makes conforming and nonsubstantive changes. SECTION 3. Makes application of Section 1 of this Act prospective to January 1, 2000. Effective date for Section 2 of this Act: September 1, 1999. Makes application of Section 2 of this Act prospective. SECTION 4. Emergency clause.