88R4412 RDS-D
 
  By: Lozano H.B. No. 3163
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the calculation of net to land in the appraisal of
  open-space land for ad valorem tax purposes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 23.51(4), Tax Code, is amended to read as
  follows:
               (4)  "Net to land" means the average annual net income
  derived from the use of open-space land that would have been earned
  from the land during the five-year period preceding the year before
  the appraisal by an owner using ordinary prudence in the management
  of the land and the farm crops or livestock produced or supported on
  the land and, in addition, any income received from hunting or
  recreational leases.  The chief appraiser shall calculate net to
  land by considering the income that would be due to the owner of the
  land under a cash lease[, share lease, or whatever lease]
  arrangement [is] typical in that area for that category of land, and
  all expenses directly attributable to the agricultural use of the
  land by the owner shall be subtracted from this owner income and the
  results shall be used in income capitalization.  In calculating net
  to land, a reasonable deduction shall be made for any depletion that
  occurs of underground water used in the agricultural operation.  
  For land that qualifies under Subdivision (7) for appraisal under
  this subchapter, the chief appraiser may not consider in the
  calculation of net to land the income that would be due to the owner
  under a hunting or recreational lease of the land.
         SECTION 2.  The change in law made by this Act applies only
  to the appraisal of open-space land for a tax year that begins on or
  after the effective date of this Act.
         SECTION 3.  This Act takes effect January 1, 2024.