Texas House Bill HB84

Texas 2021 - 87th 1st C.S.

Caption

Relating to the calculation of net to land in the appraisal of open-space land for ad valorem tax purposes.

Impact

This legislation specifically impacts the Tax Code of Texas by adjusting the methods used to assess the value of open-space agricultural land for tax purposes. The amendments intend to allow for a more accurate representation of land value by taking into account various income sources and associated expenses. By refining these appraisal techniques, the bill aims to reduce fluctuations in tax assessments based on market conditions, ultimately providing more stability for landowners involved in agricultural activities.

Summary

House Bill 84 aims to amend the calculation of 'net to land' for open-space land used for ad valorem tax purposes. The bill stipulates that the average annual net income derived from the agricultural use of open-space land will be calculated over a five-year period, emphasizing the importance of prudent management. It also incorporates additional considerations, such as income from hunting and recreational leases, into the appraisal process. Furthermore, the bill instructs appraisers to deduct expenses directly attributed to agricultural use when determining the net to land, enhancing the fairness of the tax assessment process for landowners.

Contention

While the bill appears to simplify and clarify the appraisal process for open-space land, there may be contention surrounding how different types of income and expenses are factored into the net income calculations. Stakeholders in the agricultural sector could have varying perspectives on the specific deductions and considerations proposed in the legislation. Moreover, there may be debates regarding the effective date of the bill and how its implementation will influence local tax revenues and land use practices.