HB 950 / SB 330: Tax Relief for Young and Veteran Farmers

Helping aspiring farmers to afford land

 

Photo by: Farmer Veteran Coalition

The Young and Military Veterans Tax Relief bills (HB 950 and SB 330) help address the problem of our aging farmer population by allowing young beginning farmers and military veterans to qualify for agricultural valuation on their land after one year of farming, instead of having to pay high taxes while waiting for five years.

The Senate Finance Committee heard testimony on March 14 – thanks to those of you who appeared – and voted 13-2 to move the bill forward!

Download our Fact Sheet on SB 330

A growing number of young people and military veterans aspire to become farmers, but many lack the capital to begin.

High property taxes represent a major start-up cost for new farmers. Texas law provides that land used primarily for raising food is taxed on its “agricultural value” rather than its development value. But not only must the land be used principally for agriculture, it must have been used that way for at least 5 of the preceding 7 years.

If a new farmer buys land that is already in agricultural valuation, this is not a problem; but a farmer seeking to start a farm on land that has been allowed to fall out of agricultural use faces 5 years of paying taxes as if the land were to be developed.

The high taxes during the farm start-up period are exacerbated by several factors:

  • Farming has high startup capital requirements and does not start paying dividends for years. Cattle take time to grow to market weight, orchards take years to bear fruit, and soil takes years to improve to provide good harvests.
  • Most farms have a very small profit margin, and many beginning farms operate at a net loss.
  • The farm land may not be considered a homestead, allowing the property valuation to be increased at speculative development rates, rising as much as 100 percent per year in some cases.

As stated by one military veteran-turned-farmer: “I have come to see the property tax system as a huge hurdle in starting an agriculture operation in Texas. We are not sure if we can survive the five-year waiting period.  And this is from a family that has a six-figure off-farm income, and we are still struggling.”

SB 330 and HB 950 address this issue by reducing the waiting period for agricultural valuation to one year for two groups:

  • Veterans who become farmers; and
  • Young, beginning farmers, defined as those under the age of 35 who have not been the principal operator of a farm for more than ten years.

Read the entire text of HB 950 here and the text of SB 330 here.

Take Action

Call or email your State Representative and Senator to urge him or her to support HB 950 and SB 330 and help move the bill forward. A phone call has the greatest impact and allows you to find out how they stand on this bill. Remember to keep the conversation polite and to-the-point.

You can find out who your representatives are by going to www.fyi.legis.state.tx.us or calling the Texas Capitol Switchboard at 512-463-4630.

If you call after hours, you can simply leave a message:

“Hi, my name is ____, and I am a constituent. I am calling to urge Representative/Senator  ______ to co-author HB 950/SB 330, the Tax Relief for Young and Veteran Farmers Bill, and to help the bill move forward as quickly as possible. I would like to know where my Representative/Senator stands on this issue, please. You can call me back at _________.”

If you prefer email, your Representative’s email address is simply FirstName.LastName@house.texas.gov, and your Senator’s email address is firstname.lastname@senate.texas.gov.

 

Take Action #2: Senate Committee Hearing

 

SB 330 will be heard by the Senate Finance Committee on Tuesday, March 14.  If this bill is important to you, consider coming to the Capitol to show your support!

LOCATION: Capitol Extension, Room E1.0136.

 

PARKING: Parking is usually available at the Capitol Visitors Center, located between Trinity and San Jacinto Streets at 12th and 13th.

You can find a map and other options also listed here.

 

WHAT TO DO: Come to the hearing room between 8 am and 9:30 am, and sign in at a kiosk saying you support SB330. (The kiosk may be open after 9:30 am, we will post updates on our Facebook page.)  You’ll be listed on the witness list even if you leave right after that. The witness list is important because, when the bill goes to the full Senate after the hearing, the Senators will look to see how many people were witnesses for or against the bill. Just 15 minutes can have an impact!

If you want to testify, please email Judith@FarmAndRanchFreedom.org.  Remember that the Committee has to hear a lot of bills that day, so we need to keep all testimony short and focused on the issue.

 

SIGNING IN: The Texas Legislature uses electronic witness affirmation forms which are available at registration kiosks located throughout the Capitol Extension. Take the elevator down to Floor E1, and walk down the main hallway about halfway.  Turn down one of the side hallways, then turn again so that you are going parallel to the main hallway. You’ll see little alcoves, where there used to be pay phones — the kiosks are in there.

 

Be sure to bring this information with you:

 

The bill number: SB 330

The committee: Senate Finance Committee

The time and location of the hearing (View upcoming meetings): 9:00 am, Room E1.036

Position: FOR the bill

Not testifying