On March 23 District 13 State Representative Ben Leman (Iola) presented House Bill 2043 to the Land and Resource Management Committee. The bill, sponsored by Leman, aims to level the playing field for certain property owners whose land is being forcibly taken through eminent domain.
Leman told the Examiner, “House Bill 2043 ensures that property owners are no longer inappropriately forced to pay rollback taxes on land qualified as agricultural use when it is forcibly taken from them through eminent domain.”
He continued, “Instead, this bill helps to ensure rural Texans are treated fairly and receive their constitutional right to just compensation, by requiring the condemning entity to pay the additional taxes and interest imposed because the land has been diverted to a nonagricultural use as a result of condemnation.”
When previously exempted land use changes to a nonexempt use, taxes are due on the difference between the devalued land and market value for a certain amount of time. These “rollback taxes” include interest and penalties and are due for three years for agricultural exemptions and five years for open space and timber exemptions.
Under current law, however, land with open space and timber use exemptions taken through condemnation have been exempt from rollback taxes. Leman’s bill seeks to afford that same tax consideration to property owners with agricultural exemptions whose property is “forcibly taken from them through eminent domain. It does not change the rollback tax laws for land sold voluntarily.”
Should HB 2043 pass in its current form, the additional taxes, interest, and penalties would be the obligation of the condemning entity and not the property owner.