Could farmland near commercial property still receive Louisiana use-value tax assessment?

Plain-English summary

In 2013, the Louisiana Attorney General said proximity to commercial and residential property was largely irrelevant to whether unsold land qualified for agricultural use-value assessment. The actual statutory conditions mattered. The AG declined to determine whether the particular 2.308-acre Bossier Parish parcel qualified because that required fact finding.

Under the law described in the opinion, land had to meet the relevant definition in La. R.S. 47:2302 and the additional requirements of La. R.S. 47:2303. Because this tract was under three acres, the AG said it needed the statutory average gross annual income from a designated use over the four preceding years, along with the landowner's signed use agreement. The separate rule for land sold at a high price did not apply because the tract at issue had not been sold.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did nearby commercial development automatically disqualify the tract?

No. The AG said neither of the main eligibility statutes required the parcel to be surrounded only by agricultural property.

Did a parcel smaller than three acres qualify automatically if it was farmed?

No. The opinion said this parcel would need an average gross annual income of at least two thousand dollars from a designated use over the four preceding years and a signed agreement to devote the land to that use, as well as the statutory land definition.

Did the recent sale of a neighboring lot trigger the sold-land rule for this tract?

No. The AG said the tract under review had not itself been sold, so the rule in La. R.S. 47:2305(B) did not apply to it.

Did the AG decide the parcel's tax classification?

No. It expressly declined to find facts or determine actual eligibility, leaving that application to the assessor.

Background and statutory framework

The assessor described an agricultural tract subdivided after surrounding commercial and residential growth. One lot was sold; the remaining lot was 2.308 acres. The AG explained use-value assessment under La. Const. art. VII, §18(C), the land definitions in La. R.S. 47:2302, and the eligibility requirements in La. R.S. 47:2303.

Citations

• La. Const. art. VII, §18(C) (use-value assessment).
• La. R.S. 47:2302 and La. R.S. 47:2303 (definitions and eligibility conditions).
• La. R.S. 47:2305(B) (loss-of-eligibility rule after sale, inapplicable to this tract).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/13-0211

Original opinion text

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DEPARTMENT OF JUSTICE
P.O. BOX 94005
BATON ROUGE
70804-9005
JAMES D. "BUDDY" CALDWELL
ATIORNEY GENERAL

DEC '1 9 2013'
OPINION 13-0211
129 TAXATION - Levy & Assessment (ad valorem taxes) La. Const. art. VII, §18; La. R.S. 47:2302; La. R.S. 47:2303; La. R.S.
Mr. Bobby W. Edmiston
47:2305

Bossier Parish Assessor
All of the requirements of La. R.S. 47:2302 and La. R.S. 47:2303
P.O. Box 325
must be met in order for land to qualify for use value assessment for
ad valorem tax purposes. Also, proximity to commercial and
Benton, Louisiana 71006-0325
residential properties is largely irrelevant when determining whether
land that has not been recently sold qualifies for use valuation.

Dear Mr. Edmiston:

Your request for an Attorney General's opinion has been assigned to me for research and reply. You ask for guidance as to whether a certain tract of land, located in an area that also contains commercial and residential properties, qualifies for use valuation for ad valorem tax purposes.

In your letter, you specifically indicate as follows:

The piece of property in question is in a part of town that at one time was all farming land, but over the past couple of decades it has experienced tremendous growth. Thus, there are commercial and residential properties intermingled with agricultural properties.

The piece of property in question was once "land hooked" to other surrounding properties that had "use value." The property was originally a 3.22 acre tract, meets and bounds description, surrounded by commercial properties. In 2012 the property was platted into two subdivision lots, thus breaking the "Iand hook. II Lot 2 cO'ntaining .908 acres was sold for commercial construction. This left lot 1, a 2.308 acre tract, which is the property in question.

First, we note that this office is not a finder-of fact; therefore, we cannot opine as to whether a certain tract of land actually qualifies for use valuation. Nevertheless, we can provide the constitutional and statutory authority to guide you in making that determination.

Under La. Const. art. VII, §18(C), U[b]ona fide agricultural, horticultural, marsh, and timber lands, as defined by general law, shall be assessed for tax purposes at ten

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Mr. Bobby W. Edmiston
Opinion 13-0211
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percent of use value rather than fair market value." Use value of bona fide agricultural, horticultural and timber lands is the highest value of such land when used by a prudent agricultural, horticultural or timber operator for the sole purpose of continuing the operation, as a commercial agricultural, horticultural or timber enterprise, of an existing bona fide agricultural, horticultural or timber use. 1

The lands that can qualify for use valuation are defined in La. RS. 47:2302, which provides the following:

A. Bona fide agricultural land is land devoted to the production for sale, in reasonable commercial quantities, of plants and animals, or their products, useful to man, and agricultural land under a contract with a state or federal agency restricting its use for agricultural production.

B. Bona fide horticultural land is land devoted to the production for sale, in reasonable commercial quantities, of fruits, vegetables, flowers or ornamental plants, and horticultural land under a contract with a state or federal agency restricting its use for horticultural production.

C. Bona fide marsh land is wetland other than bona fide agricultural, horticultural or timber land.

D. Bona fide timberland is land stocked by forest trees of any size and specie, or formerly having such tree cover within the last three years and not currently developed or being used for nonforest purposes, and devoted to the production, in reasonable commercial quantities, of timber and timber products, and timberland under a contract with a state or federal agency restricting its use for timber production.

Further, La. RS. 47:2303 provides as follows:

In order to be classified as bona fide agricultural, horticultural, marsh or timber land and assessed at its use value under the provisions of Article VII, Section 18(C) of the Louisiana Constitution of 1974, it must meet the definition of bona fide agricultural, horticultural, marsh or timber land as described in RS. 47:2302 and, in the case of bona fide agricultural, horticultural, or timber land: ~

A. Be at least three acres in size, or have produced an average gross annual income of at least two thousand dollars in one or more of the designated classifications for the four preceding years, and

La. R.S. 47:2301.

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Mr. Bobby W. Edmiston
Opinion 13-0211
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B. The landowner has signed an agreement that the land will be devoted to one or more of the designated uses as defined in RS. 47:2302.

Thus, all of the requirements of La. R.S. 47:2302 and La. R.S. 47:2303 must be met in order for land to qualify to be assessed at its use value. Here, because the land is less than three acres in size, it must have produced an average gross annual income of at least two thousand dollars in one or more of the designated classifications for the four preceding years. Further, the landowner must have signed an agreement that the land will be devoted to one or more of the .designated uses as defined in R.S. 47:2302. Nevertheless, neither of those two statutes contains a requirement that the oland in question be located solely near other agricultural properties.

Moreover, La. R.S. 47:2305(B) governs loss of eligibility for use value classification and provides the following:

B. (1) If land having a use value assessment is sold for a price four times greater than its use value, the land shall be presumed to be no longer eligible to be classified as bona fide agricultural, horticultural, marsh, or timber land. Upon application as provided in R.S. 47:2304, the purchaser shall be given the opportunity to demonstrate to the full satisfaction of the assessor:

(a) That the sales price paid includes things of value which are susceptible of appraisal including, but not by way of limitation, standing crops or timber, improvements, equipment, etc.; or

(b) That the land is actually in bona 'fide agricultural, horticultural, marsh, or timber land use and meets the requirements of R.S. 47:2302 and R.S.
47:2303. Such demonstration of bona fide operations may include the preparation and implementation of farm or forestry plans or programs within two years following the purchase.

(2) Upon such demonstration, the landowner shall be entitled to a use value classification.

Here, the tract of land in question has not been sold; therefore, La. RS. 47:2305(B) does not apply. Nevertheless, the statute illustrates that land can remain qualified for use value assessment during times of rising fair market values if it continues to meet the requirements of La. RS. 47:2302 and La. RS. 47:2303.

In conclusion, it is the opinion of this office that all of the requirements of La. RS. 47:2302 and La. RS. 47:2303 must be met in order for land to qualify for use value assessment. Also, proximity to commercial and residential properties is largely irrelevant when determining whether land that has not been recently sold qualifies for use valuation.

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Mr. Bobby W. Edmiston
Opinion 13-0211
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We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.

Yours very truly,

JAMES D. "BUDDY" CALDWELL
Attorney General

BY:~ ~ tJr---:i:<
BENJAMIN A. HUXEN \I
Assistant Attorney General
JDC/BAH II