Short research deals reap big tax rewards
|By Eric Dexheimer, Austin American-Statesman|
|McClatchy-Tribune Information Services|
By the following year, the bill had dropped to about
Liemandt had taken advantage of an obscure, but valuable tax break. In exchange for the 98 percent reduction in his taxes, he agreed to leave the land undisturbed and permit college student researchers on to the property to conduct biological projects, from studying male cricket frogs and squirrel foraging, to lizards and owlflies.
A generous property tax advantage in exchange for making land available for university work, known as ecological laboratories, has been permitted in Texas for decades. Although a small number of property owners historically have taken advantage of the law, appraisers say they are receiving more inquiries as property values in economically vibrant areas such as
While no agency tracks ecolabs statewide, about a dozen landowners annually have used the arrangement to shave hundreds of thousands of dollars from
Typically, landowners hoping to transition their land from market value to vastly reduced agricultural valuations must first farm or ranch on the land for at least five years. Appraisers say the delay makes property owners prove they are serious about using their land for agriculture before earning a smaller tax bill. Owners then apply to the local appraisal district to have the land's worth for tax purposes determined by its production value, a calculation that can dramatically lower the land's value and, thus, its tax bill.
Ecolabs, by comparison, earn a dramatic agricultural tax reduction without any wait. The law, passed in 1977, also doesn't require that landowners provide the research opportunity for any minimal length of time.
Even the most generous ecolab tax breaks represent a tiny fraction of
In 2013, after two years as an ecolab, appraisal records show, Liemandt shifted his land into a traditional agricultural category, shortening the traditional waiting period by two-thirds, and saving hundreds of thousands of dollars in property tax payments in the process.
Through his attorney, Liemandt said he had been impressed by the quality of research conducted on his land, but declined to comment further.
Grants for tax breaks
Supporters say ecolabs fill important gaps in the Texas landscape. They provide natural science researchers access to land on which field studies can be performed. About 94 percent of Texas is in private hands, so finding land to set up and monitor experiments can be difficult.
Ecolabs also offer a way for property owners to support conservation. By agreeing not to develop land -- particularly in urban or suburban areas -- they can improve water quality, wildlife protection and scenic vistas.
After law school, Braun focused his attention on conservation issues, working for the
"There was a real opportunity to match up landowners and universities," he said. According to local appraisers, Braun today arranges most of the area's ecolabs.
Past attempts by landowners to trade academic research opportunities for tax breaks had met with mixed success.
"We went in and looked at research that had supposedly been done, and there was little, if any," Cory recalled. The appraisal district yanked the tax break from several ecolabs in the mid-2000s, he said.
In an effort to professionalize the process, Braun in 2010 unveiled a sort of ecological laboratory dating site. Texasecolab.org matches landowners looking to slash their tax bill with university researchers seeking a location -- and funding -- for their projects. (Braun's firm also hosts annual meet-and-greets at universities.)
There, property owners promote their land to students and faculty advisers from local college science departments, typically seeking locations for graduate dissertation work. "The irregularly-shaped property is bordered by
To attract the academics necessary for the ecolab designation, many landowners also advertise tax-deductible "research grants" to have the work performed on their properties -- a draw for hard-up graduate students.
"The grant money certainly helps," said
Thanks to the presence of the academics, Gray's property tax bill on the golf course dropped from
A few local ecolabs sit on modestly priced parcels. But because of the area's strong real estate market -- which, in turn, provides an incentive for owners of more expensive land to seek a tax break -- many local ecolabs have landed on high-dollar sites. An
But, he added, "I don't care what their motivation is; it's extremely valuable to get access" to the private land.
As a land preservation advocate, Braun said such financial incentives were essential. "Conservation happens when it's in people's financial interests," he said.
Research site for two years
Without Braun's ecolab website, "Just getting hold of property owners and getting permission can be a real issue," said
Brockoven received a grant to conduct field work on, among other sites, a piece of property northwest of the city, near
Gray said he made the move to wildlife management in part because it was less expensive. "If you're under ecolab, you have to pay researchers to come out and do their research," he said. He said there was no longer scientific work being conducted on his property.
Rose said property owners moving from ecolab to another tax-break classification still meet that objective. He noted that plenty of research projects can be completed in a couple of years.
Braun said while landowners may only recently have begun using the quick transition, legislators intended it as a further incentive to persuade reluctant property owners to host an ecolab. "It is so hard to get Texas landowners to allow people on their land," he said.
And while he prominently advertises the quick transition on his website as an advantage for property owners to turn their land into an ecolab, Braun said he often recommends his clients consider a longer commitment to hosting research. Even if owners don't continue hosting an ecolab, Braun said, local citizens continue to benefit from the exchange in unbroken vistas and cleaner water and air.
"This is usually the beginning of a long-term commitment to conservation," he said.
How valuable are ecolab exemptions?
400-acre property in
2013 property taxes:
2014 property taxes (after ecolab designation):
Landowner payment to university researchers:
This story is part of the
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