Texas Agriculture Law Blog, Oct. 21, 2019:
A couple of weeks ago, I did a podcast with attorney J Pete Laney who gave an update on the key bills coming out of the Texas Legislature for agriculture. The response was great, and several folks asked if I would do a similar blog post. So, I’ve narrowed the bills J Pete and I discussed to a Top 5 list of bills for agriculture.
If you want more detail on any of the bills, be sure to click on each bill number to read the text, and be sure to listen to my podcast with J Pete where we actually discussed a few more bills than are included in this blog and went into more detail on each bill. You can find the podcast episode on iTunes, your podcast app, or just click here.
*Hemp production (HB 1325) This bill relates to legalizing hemp production in Texas. This bill went into effect on September 1, 2019. It has been one of the most publicized bills coming out of this session. Importantly, this bill essentially sets forth the framework for rules related to hemp production, and then tasks the Texas Department of Agriculture with developing regulations for the state. The TDA has submitted its proposed plan to the USDA for approval as required by the bill, but the USDA has yet to release their federal regulations. Once the USDA rules are released, the TDA will likely have to revise its plan based on those federal regulations.
Key provisions in this bill for potential hemp producers include instructions to both TDA and the Department of Health Services. TDA will address details related to THC content testing, disposal of plants that do have a THC content over .3%, and details related to inspections of growing crops and after harvest.
Keep in mind, there are a number of uncertainties related to TX hemp production at this point. When will the federal and state regulations be finalized? When will the permitting process be ready to go? When will certified seed be available in Texas? Where will processing facilities be located and what will their processing capacity be? What rules will be enacted related to transportation? One of the most important issues in my mind for producers is ensuring there is a contract in place with a fixed price term prior to planting. All important issues to keep in mind.
* Wind lease requirements (HB 2845) I’ve written about this bill before, so for more detail, click here. Essentially, this bill requires all Texas wind leases after September 1, 2019, to include certain required terms related to decommissioning and removal of equipment at the end of the lease. The bill requires certain actions be taken by the company such as removal of equipment, including turbines, substations, underground cables and overhead power lines and filling in holes or cavities. Additional requirements may be included if requested by the landowner such as removal of roads, requiring filling of holes with topsoil, and removing large rocks. Additionally, the bill requires the company post a bond to ensure there are adequate funds to complete these actions.
* Rollback taxes (Text of HB 1743) This is an important issue for anyone who has land that receives open space valuation for property taxes that may take that land out of agriculture. By way of quick background, land used for agriculture and qualifying wildlife management are valued differently than other property when it comes to property taxes, usually resulting in a significantly lower property tax bill. When property that has received this special use valuation is taken out of agriculture, there are “rollback taxes” due. These are calculated as the difference between the taxes that would have been owed without the open space valuation versus what was paid by the landowner plus interest. This bill modifies the number of years considered when calculating the rollback taxes and decreases the interest rate. As of September 1, 2019, the statute provides that the rollback tax period is 3 years (versus the prior law which required 5 years) and the interest rate will be 5% (down from 7%).
* Hunting feral hogs (Text of SB 317) Feral hogs are a significant problem in Texas, causing damage to land across the state. This statute states that, effective September 1, 2019, no hunting license is required for shooting feral hogs on private land. Previously, a license was required unless the hunter could prove the hogs were causing depredation. Importantly, note that landowner permission is required to hunt on private property.
* Electric cooperatives & broadband (Text of SB 14 (electric co-ops & broadband) This bill allows electric cooperatives or their affiliates to construct, operate, and maintain fiber optic cables and other facilities for providing broadband service “over, under, across, on, or along real property, personal property, rights-of-way, easements, and licenses and other property rights owned, held, or used by the cooperative.” The cooperative is required to give notice to affected landowners of land where existing easements are planned to be used for this broadband project at least 60 days prior to construction. If a property owner wishes to object to the project, they must file a written protest with the electric coop no later than the 60th day after the notice is mailed. If a written protest is timely filed, the cooperative may not use the easement or other property right for broadband service unless the protesting landowner later agrees to such use in writing. Importantly, this right to protest does not apply for landowners if the easement or other property right in favor of the electric cooperative includes authorization of the use for the provision of broadband service or other similar communication services.
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