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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