Seasons – February 2022

When tax bills began arriving in the fall, you were no doubt reminded of the economic benefit of having a wildlife or agricultural valuation in place. Whenever the Texas Legislature is coming into session, we at Plateau are often asked, “Are they going to take away my wildlife or agricultural valuation?” You are no doubt aware of many of the benefits of open-space, but if you find yourself or someone else asking these questions, here’s a refresher.

There is strong protection built into the way the open-space (ag/wildlife valuation) law is structured, which should ease your mind a little. The laws that allow for a special valuation on open-space agricultural and wildlife lands are required by the Texas Constitution Article VIII, §1-d-1, which says that the legislature “SHALL provide by general law for taxation of open-space land devoted to farm, ranch, or wildlife management purposes on the basis of its productive capacity…” (emphasis added).

This means that the legislature cannot simply pass a law to eliminate these special valuations. They can change the rules and requirements, but they cannot eliminate it without amending the constitution – only the people of Texas can do that.

The premise that landowners enjoying the benefits of wildlife and agricultural valuations are not paying their fair share is a flawed one. To start, these are not tax “exemptions” they are special valuations designed to tax land on its productive capacity instead of its market value. The truth is that owners of open-space land are helping to make up for deficits in delivering services to residential property. According to a compilation of studies from across the country by the American Farmland Trust, the median cost to provide services to working and open-space lands is only $0.37 for every dollar raised in tax revenue from those lands. This ratio is also known as the Cost of Community Services (COCS) ratio. The open-space land ratio is comparable to the ratio for commercial lands ($0.29/$1.00). In contrast, providing services to residential land costs $1.19 for every dollar raised. That means it costs more to provide services to all those people and houses than they pay in property taxes.

Texas lands are no different. Three counties in Texas had ratios ranging from 0.18/$1.00-0.33/$1.00, which means that Texas open-space land is even more cost-efficient than the national median. Despite the substantially higher revenues that residential use brings in over open-space land with those special valuations on it, the infrastructure and service needs for all that open-space land are much lower. As David Langford of the Texas Wildlife Association has said: “cows don’t go to school, songbirds don’t call 9-1-1, and crops don’t require the ‘jaws of life’ or Medivac helicopters after Saturday night smashups on the freeway.”

And remember, you are still paying market value on all the structures (if any are present) and the associated residential land on your property. The only land receiving the tax break is that used for wildlife or agricultural purposes and that land requires virtually no government services.

Of course, there are lots of intangible and difficult to quantify reasons to support open-space including improved water quality, wildlife habitat, scenic views, etc. As wildlife biologists, these mean quite a bit to the Plateau team. As taxpayers, though, it is nice to see that the economics make sense as well.

Remember to encourage your representatives to support open-space. Even though they cannot eliminate ag/wildlife valuations without a constitutional amendment, they can adjust the rules to make it more difficult to qualify. And for anyone who wants to do away with them, remember that if that occurs, lots of land will hit the market with the resulting rapidly increasing taxes, driving prices (and tax revenues) down. And never forget that conversion of land to residential use may result in more tax revenue, but that comes with higher costs to the state and local governments who provide essential services, erasing any benefit to government coffers.

This article was originally published in a January 2019 edition of Seasons.

If you have questions or would like more information about appropriate Wildlife Management activities for your property, please contact us at (512) 894-3479 or [email protected].

Spring Bird Breeding Survey Preview

Learn what birds are migrating through your habitat this spring!

Spring Breeding Bird Surveys are conducted from mid-March through late June, which are the peak breeding and migratory months. These surveys are a great opportunity for landowners to practice their birding skills and tour their property with a professional wildlife biologist while visiting a number of bird survey stations to detect birds either through visual or auditory observation. Detailed reports are produced with all species and numbers observed, brief habitat and location descriptions for each station. Annual surveys can be analyzed over several years to show trends and improvements in species observed, indicating improved habitat through your efforts.

A Plateau Spring Breeding Bird Survey:

• Qualifies as a Wildlife Management activity in just one morning
• Allows landowners to monitor long-term trends of species composition and abundance
• Establishes listening stations within diverse habitat locations throughout your property for observation
• Records both the number and the type of different species of birds that are seen or heard at each station in a field log included in a detailed report
• Offers wildlife management recommendations for current and potential activities which may improve overall species abundance and diversity

If you’re interested in learning more about Plateau’s Spring Breeding Bird Survey, or would like to schedule one for your property call (512) 894-3479 or email [email protected].

By Erin Chesser, Braun & Gresham Attorney and Counselor

Great execution of your estate plan begins with funding and titling. Your estate plan is essentially your set of directions and rules for how your assets are to be handled upon your passing. But those directions and rules only apply if your ownership status and the potential ownership status of your beneficiaries matches what you have contemplated in your estate plan. Here are some common areas of disconnect to consider:

• Passing real estate to multiple people with differing ideas on how to sell, preserve, or manage it
• Inheriting and passing on mineral interests where title has not been formally updated
• Charitable giving to groups that have since dissolved, or have stopped operating as charities
• Naming as guardians, agents, executors, or trustees people who are no longer in your life, or with whom your relationship has substantially changed
• Using beneficiary designations (e.g. retirement accounts) or account ownership styles (e.g. pay-on-death bank accounts) in a way that is not contemplated by your overall estate plan

Work the plan, don’t let the plan work you. As your life develops, so may your planning needs. Whether you are forming business entities and inheriting complex assets, or your family is experiencing marriages, births, and other life events that affect the size and shape of your family, changes in your life should spark the possibility of changes in your estate plan. Many excellent estate plans contemplate these types of changes and are durable enough to withstand them without substantial amendments or restatements. It is worth a quick call to your estate planning attorney to make sure that whatever changes you have experienced are fully covered by your estate plan.

Stress Test your Plan.

Rather than waiting to test your plan until after you pass and leaving the stress to your family, let your attorney stress test your plan ahead of time. A stress test will help identify potential outcomes of your plan that may be different now than they were when you originally created it. Here are some life events that should send you to your estate planning attorney for a stress test:

• You are not sure if accounts or assets are titled correctly to be directed by your estate plan
• You have gained or lost family members
• You or your spouse are experiencing serious health issues
• Your plan has not been reviewed for more than five years

Save the stress. Let Braun & Gresham test your estate plan and help with any updates or changes you may need to make sure your excellent plan is every bit as good as its execution.

If you have questions or concerns about estate planning, Braun & Gresham can help. At Braun & Gresham, PLLC, we use a wide variety of tools to accomplish your estate planning goals, such as wills, living trusts, medical and financial powers of attorney and other disability- planning documents, limited liability companies, family limited partnerships, buy-sell agreements, charitable trusts, donor advised funds, conservation easements and many other strategies. We’ll help educate you about these various strategies, and together, identify which fit your circumstances best. Using the innovative and versatile estate planning solutions that Braun & Gresham is known for, we’ll create the most practical solutions and apply them in a comprehensive plan to achieve your vision for your family and assets.

Please contact Braun & Gresham at (512) 894-5426 or email [email protected].