Summary of a Recent
Judicial Development in
Estate Planning and Taxation

Certain Requirements Must Be Performed
for Open-Space Valuation

Bose Emelle
National AgLaw Center Graduate Assistant

Summary of Decision

In Cordillera Ranch Ltd. v. Kendal County Appraisal District, 136 S.W.3d 249 (Tex. Ct. App. 2004), the Texas Court of Appeals Texas held that property owners who formed a wildlife management cooperative and who requested that the land be designated as "qualified open- space land" for tax purposes each were required to independently qualify for the "open-space valuation" by physically performing three of seven qualifying activities on each property.

Background

Plaintiffs Cordillera Ranch, Ltd. and individual property owners within the Cordillera subdivision (Cordillera) formed a wildlife management cooperative and applied for designation of their property as "qualified open-space land" under the Texas Tax Code. See id. at 251. Defendant Kendal County Appraisal District (District) denied the application and plaintiffs appealed the denial. See id. The trial court granted the District's motion for summary judgment. See id. The plaintiffs appealed the District's decision to the Texas Court of Appeals. See id.

Arguments

The District argued that "the plain language of the Code requires each applicant for an open-space valuation, including wildlife co-op members, to be evaluated separately, and that each applicant is subject to the explicit requirement that at least three of seven qualifying activities be performed on his land in order to qualify for the tax exemption." Id. at 252. Cordillera argued that "the Appraisal District improperly imposed an additional condition not contained in the statute by requiring each owner of a lot in a wildlife co-op to perform three of seven qualifying activities on his lot in order to qualify for the open-space exemption through wildlife management classification." Id. at 253.

Analysis and Holdings

The court stated that in order to qualify for the open-space tax exemption through the wildlife management classification, the statute expressly requires the land to be actively used in at least three of the seven qualifying ways. See id. (citing Tex. Tax. Code Ann. § 23.51(7)). The court also noted that the legislature amended the statute to include the term "actively" and increased the requirement of "two" qualifying activities to three qualifying activities. See id.

The court held that "the statute requires independent applications based on ownership, . . . [which] require[s] [an] independent assessment of each application." Id. at 254. The court also held that "each owned-applicant's land is independently considered, and each must show that he is using his land for wildlife management by showing that 'three of seven qualifying activities' were performed on his land." Id. at 255.

The case was decided on March 3, 2004; this summary was posted Mar. 21, 2005.