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AN ACT
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relating to the calculation of net to land in the appraisal of |
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open-space land for ad valorem tax purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.51(4), Tax Code, is amended to read as |
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follows: |
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(4) "Net to land" means the average annual net income |
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derived from the use of open-space land that would have been earned |
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from the land during the five-year period preceding the year before |
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the appraisal by an owner using ordinary prudence in the management |
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of the land and the farm crops or livestock produced or supported on |
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the land and, in addition, any income received from hunting or |
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recreational leases. The chief appraiser shall calculate net to |
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land by considering the income that would be due to the owner of the |
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land under cash lease, share lease, or whatever lease arrangement |
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is typical in that area for that category of land, and all expenses |
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directly attributable to the agricultural use of the land by the |
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owner shall be subtracted from this owner income and the results |
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shall be used in income capitalization. In calculating net to land, |
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a reasonable deduction shall be made for any depletion that occurs |
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of underground water used in the agricultural operation. In this |
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subdivision, "wildlife or livestock disease or pest area" means an |
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area designated by a state agency as an area in which a disease or |
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pest that affects wildlife or livestock exists or may exist, |
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including a chronic wasting disease containment or surveillance |
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zone and an area subject to a quarantine authorized by Subtitle C, |
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Title 6, Agriculture Code. In calculating net to land of open-space |
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land located in or adjacent to a wildlife or livestock disease or |
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pest area, the chief appraiser shall take into consideration the |
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effect that the presence of the applicable disease or pest or the |
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designation of the area has on the net income from the land. For |
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land that qualifies under Subdivision (7) for appraisal under this |
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subchapter, the chief appraiser may not consider in the calculation |
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of net to land the income that would be due to the owner under a |
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hunting or recreational lease of the land. |
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SECTION 2. The change in law made by this Act applies only |
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to the appraisal of open-space land for a tax year that begins on or |
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after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2024. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 260 was passed by the House on April |
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14, 2023, by the following vote: Yeas 140, Nays 3, 2 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 260 was passed by the Senate on May |
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16, 2023, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |