78R7696 JD-D

By:  Turner                                                       H.B. No. 2517



A BILL TO BE ENTITLED

AN ACT

relating to the ad valorem taxation of farm products and open-space 
land.   
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 11.16(c), Tax Code, is amended by adding 
Subdivision (3) to read as follows:
		(3)  "Producer" means a person who in any of the five 
preceding tax years derived at least 10 percent of the person's 
gross income from farm products that the person produced and owned 
in that year.
	SECTION 2.  Section 23.56, Tax Code, is amended to read as 
follows:          
	Sec. 23.56.  LAND INELIGIBLE FOR APPRAISAL AS OPEN-SPACE 
LAND. Land is not eligible for appraisal as provided by this 
subchapter if:
		(1)  the land is located inside the corporate limits of 
an incorporated city or town, unless:
			(A)  the city or town is not providing the land 
with governmental and proprietary services substantially 
equivalent in standard and scope to those services it provides in 
other parts of the city or town with similar topography, land 
utilization, and population density;  or
			(B)  the land has been devoted principally to 
agricultural use continuously for the preceding five years;
		(2)  the land is owned by an individual who is a 
nonresident alien or by a foreign government if that individual or 
government is required by federal law or by rule adopted pursuant to 
federal law to register his ownership or acquisition of that 
property;  [or]
		(3)  the land is owned by a corporation, partnership, 
trust, or other legal entity if the entity is required by federal 
law or by rule adopted pursuant to federal law to register its 
ownership or acquisition of that land and a nonresident alien or a 
foreign government or any combination of nonresident aliens and 
foreign governments own a majority interest in the entity; or
		(4)  the land is owned by a person that in each of the 
five preceding years derived less than 10 percent of the person's 
income from farming or ranching or using land for wildlife 
management purposes.
	SECTION 3.  This Act takes effect January 1, 2004, and 
applies only to the ad valorem taxation of farm products or the 
appraisal of open-space land for ad valorem tax purposes for a tax 
year that begins on or after that date.