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A BILL TO BE ENTITLED
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AN ACT
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relating to a limitation on increases in the appraised value for ad |
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valorem tax purposes of agricultural or open-space land. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.41, Tax Code, is amended by amending |
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Subsection (a) and adding Subsection (a-1) to read as follows: |
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(a) Except as provided by Subsection (a-1), land [Land] |
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designated for agricultural use is appraised at its value based on |
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the land's capacity to produce agricultural products. The value of |
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land based on its capacity to produce agricultural products is |
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determined by capitalizing the average net income the land would |
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have yielded under prudent management from production of |
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agricultural products during the five years preceding the current |
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year. However, if the value of land as determined by capitalization |
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of average net income exceeds the market value of the land as |
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determined by other generally accepted appraisal methods, the land |
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shall be appraised by application of the other appraisal methods. |
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(a-1) The appraisal office may not increase the appraised |
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value of land designated for agricultural use to an amount that |
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exceeds 110 percent of the appraised value of the land for the |
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preceding tax year. The limitation provided by this subsection |
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takes effect as to a parcel of land on January 1 of the later of the |
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2024 tax year or the tax year following the first tax year the owner |
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of the land qualifies the land for designation for agricultural use |
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under this subchapter and expires on January 1 of the first tax year |
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the owner of the land when the limitation took effect ceases to |
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qualify the land for the designation. |
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SECTION 2. Section 23.46(a), Tax Code, is amended to read as |
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follows: |
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(a) When appraising land designated for agricultural use, |
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the chief appraiser also shall appraise the land at its market value |
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and shall record both the market value and the value according to |
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this subchapter [based on its capacity to produce agricultural |
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products] in the appraisal records. |
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SECTION 3. Section 23.52, Tax Code, is amended by amending |
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Subsection (a) and adding Subsection (a-1) to read as follows: |
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(a) Except as provided by Subsection (a-1), the [The] |
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appraised value of qualified open-space land is determined on the |
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basis of the category of the land, using accepted income |
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capitalization methods applied to average net to land. The |
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appraised value so determined may not exceed the market value as |
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determined by other appraisal methods. |
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(a-1) The appraisal office may not increase the appraised |
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value of qualified open-space land to an amount that exceeds 110 |
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percent of the appraised value of the land for the preceding tax |
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year. The limitation provided by this subsection takes effect as to |
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a parcel of land on January 1 of the later of the 2024 tax year or |
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the tax year following the first tax year the owner of the land |
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qualifies the land for appraisal as qualified open-space land under |
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this subchapter and expires on January 1 of the first tax year the |
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owner of the land when the limitation took effect ceases to qualify |
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the land for the appraisal. |
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SECTION 4. Section 403.302, Government Code, is amended by |
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amending Subsection (d) and adding Subsection (i-1) to read as |
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follows: |
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(d) For the purposes of this section, "taxable value" means |
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the market value of all taxable property less: |
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(1) the total dollar amount of any residence homestead |
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exemptions lawfully granted under Section 11.13(b) or (c), Tax |
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Code, in the year that is the subject of the study for each school |
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district; |
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(2) one-half of the total dollar amount of any |
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residence homestead exemptions granted under Section 11.13(n), Tax |
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Code, in the year that is the subject of the study for each school |
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district; |
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(3) the total dollar amount of any exemptions granted |
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before May 31, 1993, within a reinvestment zone under agreements |
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authorized by Chapter 312, Tax Code; |
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(4) subject to Subsection (e), the total dollar amount |
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of any captured appraised value of property that: |
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(A) is within a reinvestment zone created on or |
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before May 31, 1999, or is proposed to be included within the |
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boundaries of a reinvestment zone as the boundaries of the zone and |
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the proposed portion of tax increment paid into the tax increment |
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fund by a school district are described in a written notification |
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provided by the municipality or the board of directors of the zone |
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to the governing bodies of the other taxing units in the manner |
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provided by former Section 311.003(e), Tax Code, before May 31, |
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1999, and within the boundaries of the zone as those boundaries |
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existed on September 1, 1999, including subsequent improvements to |
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the property regardless of when made; |
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(B) generates taxes paid into a tax increment |
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fund created under Chapter 311, Tax Code, under a reinvestment zone |
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financing plan approved under Section 311.011(d), Tax Code, on or |
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before September 1, 1999; and |
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(C) is eligible for tax increment financing under |
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Chapter 311, Tax Code; |
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(5) the total dollar amount of any captured appraised |
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value of property that: |
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(A) is within a reinvestment zone: |
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(i) created on or before December 31, 2008, |
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by a municipality with a population of less than 18,000; and |
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(ii) the project plan for which includes |
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the alteration, remodeling, repair, or reconstruction of a |
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structure that is included on the National Register of Historic |
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Places and requires that a portion of the tax increment of the zone |
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be used for the improvement or construction of related facilities |
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or for affordable housing; |
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(B) generates school district taxes that are paid |
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into a tax increment fund created under Chapter 311, Tax Code; and |
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(C) is eligible for tax increment financing under |
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Chapter 311, Tax Code; |
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(6) the total dollar amount of any exemptions granted |
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under Section 11.251 or 11.253, Tax Code; |
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(7) the difference between the comptroller's estimate |
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of the market value and the productivity value of land that |
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qualifies for appraisal on the basis of its productive capacity, |
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except that the productivity value estimated by the comptroller may |
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not exceed the fair market value of the land; |
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(8) the portion of the appraised value of residence |
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homesteads of individuals who receive a tax limitation under |
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Section 11.26, Tax Code, on which school district taxes are not |
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imposed in the year that is the subject of the study, calculated as |
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if the residence homesteads were appraised at the full value |
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required by law; |
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(9) a portion of the market value of property not |
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otherwise fully taxable by the district at market value because of |
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action required by statute or the constitution of this state, other |
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than Section 11.311, Tax Code, that, if the tax rate adopted by the |
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district is applied to it, produces an amount equal to the |
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difference between the tax that the district would have imposed on |
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the property if the property were fully taxable at market value and |
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the tax that the district is actually authorized to impose on the |
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property, if this subsection does not otherwise require that |
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portion to be deducted; |
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(10) the market value of all tangible personal |
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property, other than manufactured homes, owned by a family or |
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individual and not held or used for the production of income; |
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(11) the appraised value of property the collection of |
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delinquent taxes on which is deferred under Section 33.06, Tax |
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Code; |
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(12) the portion of the appraised value of property |
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the collection of delinquent taxes on which is deferred under |
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Section 33.065, Tax Code; |
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(13) the amount by which the market value of a |
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residence homestead to which Section 23.23, Tax Code, applies |
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exceeds the appraised value of that property as calculated under |
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that section; [and] |
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(14) the total dollar amount of any exemptions granted |
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under Section 11.35, Tax Code; and |
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(15) the amount by which the lesser of the market value |
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or the productivity value of land to which Subchapter C or D, |
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Chapter 23, Tax Code, applies exceeds the appraised value of the |
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land as calculated under that subchapter. |
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(i-1) If the comptroller determines in the study that the |
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market value of property in a school district as determined by the |
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appraisal district that appraises property for the school district, |
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less the total of the amounts and values listed in Subsection (d) as |
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determined by that appraisal district, is valid, the comptroller, |
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in determining the taxable value of property in the school district |
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under Subsection (d), shall for purposes of Subsection (d)(15) |
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subtract from the lesser of the market value or the productivity |
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value as determined by the appraisal district of land to which |
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Subchapter C or D, Chapter 23, Tax Code, applies the amount by which |
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that amount exceeds the appraised value of the land as calculated by |
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the appraisal district under that subchapter. If the comptroller |
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determines in the study that the market value of property in a |
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school district as determined by the appraisal district that |
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appraises property for the school district, less the total of the |
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amounts and values listed in Subsection (d) as determined by that |
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appraisal district, is not valid, the comptroller, in determining |
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the taxable value of property in the school district under |
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Subsection (d), shall for purposes of Subsection (d)(15) subtract |
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from the lesser of the market value or productivity value as |
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estimated by the comptroller of land to which Subchapter C or D, |
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Chapter 23, Tax Code, applies the amount by which that amount |
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exceeds the appraised value of the land as calculated by the |
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appraisal district under that subchapter. |
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SECTION 5. This Act applies only to the appraisal for ad |
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valorem tax purposes of land designated for agricultural use or |
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qualified open-space land for a tax year that begins on or after the |
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effective date of this Act. |
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SECTION 6. This Act takes effect January 1, 2024, but only |
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if the constitutional amendment proposed by the 88th Legislature, |
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Regular Session, 2023, to authorize the legislature to limit the |
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maximum appraised value for ad valorem tax purposes in a tax year of |
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land designated for agricultural use or open-space land devoted to |
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farm, ranch, or wildlife management purposes to a specified |
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percentage of the appraised value of the land for the preceding tax |
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year is approved by the voters. If that amendment is not approved |
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by the voters, this Act has no effect. |