By: Watson, Estes, Seliger S.B. No. 449

(In the Senate - Filed January 31, 2011; February 2, 2011, read first time and referred to Committee on Finance; April 6, 2011, reported adversely, with favorable Committee Substitute by the following vote: Yeas 14, Nays 0; April 6, 2011, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 449 By: Estes

A BILL TO BE ENTITLED

AN ACT

relating to the appraisal for ad valorem tax purposes of open-space land devoted to water stewardship purposes on the basis of its productive capacity.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 23.51, Tax Code, is amended by amending Subdivision (2) and adding Subdivision (9) to read as follows:

(2) "Agricultural use" includes but is not limited to the following activities: cultivating the soil, producing crops for human food, animal feed, or planting seed or for the production of fibers; floriculture, viticulture, and horticulture; raising or keeping livestock; raising or keeping exotic animals for the production of human food or of fiber, leather, pelts, or other tangible products having a commercial value; planting cover crops or leaving land idle for the purpose of participating in a governmental program, provided the land is not used for residential purposes or a purpose inconsistent with agricultural use; and planting cover crops or leaving land idle in conjunction with normal crop or livestock rotation procedure. The term also includes the use of land to produce or harvest logs and posts for the use in constructing or repairing fences, pens, barns, or other agricultural improvements on adjacent qualified open-space land having the same owner and devoted to a different agricultural use. The term also includes the use of land for wildlife management or water stewardship.

(9) "Water stewardship" means actively using land that at the time the water-stewardship use began was appraised as qualified open-space land under this subchapter or as qualified timber land under Subchapter E in at least three of the following ways to promote and sustain water quality and conservation of water resources:

(A) erosion control;

(B) habitat stewardship benefiting water quality or conservation;

(C) restoration of native aquatic and riparian animal and plant species;

(D) implementation of practices that result in a reduction of the amount of water used from a well that is exempt from permitting under Section 36.117(b)(1), Water Code;

(E) riparian and wetland habitat and buffer restoration and protection;

(F) allowance of groundwater and surface water monitoring for data collection purposes in accordance with state water planning or groundwater management area planning;

(G) invasive aquatic plant and animal control;

(H) maintaining a water right on deposit in the Texas Water Trust in accordance with Section 15.7031, Water Code, if the source of supply or point of diversion is located on land that at the time the water right was deposited was appraised as qualified open-space land under this subchapter or as qualified timber land under Subchapter E; and

(I) holding a water right that authorizes the use of water for instream flows dedicated to environmental needs or bay and estuary inflows as provided by Section 11.0237, Water Code, if the source of supply or point of diversion is located on land that, at the time the water right was amended to authorize that use, was appraised as qualified open-space land under this subchapter or as qualified timber land under Subchapter E.

SECTION 2. Subsection (g), Section 23.52, Tax Code, is amended to read as follows:

(g) The category of land that qualifies under Section 23.51(7) or (9) is the category of the land under this subchapter or Subchapter E, as applicable, before the wildlife-management use or water-stewardship use, as applicable, began.

SECTION 3. Subchapter D, Chapter 23, Tax Code, is amended by adding Section 23.5215 to read as follows:

Sec. 23.5215. STANDARDS FOR QUALIFICATION OF LAND FOR APPRAISAL BASED ON WATER-STEWARDSHIP USE. (a) The Parks and Wildlife Department, with the assistance of the comptroller, shall develop standards for determining whether land qualifies under Section 23.51(9) for appraisal under this subchapter. On request of the Parks and Wildlife Department or the comptroller, the Texas AgriLife Extension Service shall assist the department and the comptroller in developing the standards. The comptroller shall designate one chief appraiser from a rural area of this state and one chief appraiser from an urban area of this state to assist in the development of the standards. The comptroller by rule shall adopt the standards developed by the Parks and Wildlife Department or adopt alternative standards and distribute those rules to each appraisal district.

(b) The standards adopted under Subsection (a) must:

(1) require that a tract of land:

(A) be at least a specified minimum size and not more than a specified maximum size as necessary to accomplish the water-stewardship use; and

(B) possess specific water-related attributes based on the intensity of use of the land and other requirements relating to the productivity of the land;

(2) require that the owner of the land hold a water right that authorizes the use of a specified minimum amount of water for instream flows dedicated to environmental needs or bay and estuary inflows for the land to qualify under Section 23.51(9)(I) for appraisal under this subchapter;

(3) specify the degree to which the land may be developed without becoming ineligible under Section 23.56(b) for appraisal as provided by this subchapter on the basis of use for water stewardship; and

(4) address:

(A) the activities listed in Section 23.51(9);

(B) the region in this state in which the land is located; and

(C) any other factor the Parks and Wildlife Department or the comptroller determines is relevant.

(c) The standards adopted under Subsection (a) must limit eligibility of a tract of land for appraisal under this subchapter on the basis of use for water stewardship to the portion of the tract of land that is currently devoted principally to use for that purpose.

(d) The standards adopted under Subsection (a) may include specifications for a written management plan to be developed by a landowner if the landowner receives a request for a written management plan from a chief appraiser as part of a request for additional information under Section 23.57.

(e) In determining whether land qualifies under Section 23.51(9) for appraisal under this subchapter, the chief appraiser and the appraisal review board shall apply the standards adopted under Subsection (a) and, to the extent they do not conflict with those standards, the appraisal manuals developed and distributed under Section 23.52(d).

SECTION 4. Section 23.56, Tax Code, is amended to read as follows:

Sec. 23.56. LAND INELIGIBLE FOR APPRAISAL AS OPEN-SPACE LAND. (a) 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;

(B) the land has been devoted principally to agricultural use continuously for the preceding five years; or

(C) the land:

(i) has been devoted principally to agricultural use or to production of timber or forest products continuously for the preceding five years; and

(ii) is used for wildlife management or water stewardship;

(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.

(b) Land is not eligible for appraisal as provided by this subchapter on the basis of use for water stewardship if:

(1) the land was appraised as qualified open-space land under this subchapter at the time the water-stewardship use began and the land is developed to a degree that precludes the land from eligibility for appraisal under this subchapter on a basis other than use for water stewardship; or

(2) the land was appraised as qualified timber land under Subchapter E at the time the water-stewardship use began and the land is developed to a degree that precludes the land from eligibility for appraisal under that subchapter.

SECTION 5. Subsection (a), Section 23.60, Tax Code, is amended to read as follows:

(a) An owner of qualified open-space land, other than land used for wildlife management or water stewardship, on which the Texas Animal Health Commission has established a temporary quarantine of at least 90 days in length in the current tax year for the purpose of regulating the handling of livestock and eradicating ticks or exposure to ticks at any time during a tax year is entitled to a reappraisal of the owner's land for that year on written request delivered to the chief appraiser.

SECTION 6. (a) As soon as practicable after the effective date of this Act, the Parks and Wildlife Department, with the assistance of the comptroller of public accounts, shall develop the standards required by Section 23.5215, Tax Code, as added by this Act. As soon as practicable after those standards are developed, the comptroller by rule shall adopt those standards or adopt alternative standards and distribute those rules to each appraisal district as required by that section. The rules apply only to tax years beginning after the tax year in which the rules are adopted and distributed.

(b) This Act applies only to the appraisal of land for ad valorem tax purposes for a tax year that begins after the tax year in which the comptroller of public accounts adopts the rules described by Subsection (a) of this section and distributes those rules to each appraisal district.

SECTION 7. This Act takes effect January 1, 2012, but only if the constitutional amendment proposed by the 82nd Legislature, Regular Session, 2011, providing for the appraisal for ad valorem tax purposes of open-space land devoted to water stewardship purposes on the basis of its productive capacity is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.

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