88R1460 TJB-D
By: Murr H.B. No. 260
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 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. In this
subdivision, "wildlife or livestock disease or pest area" means an
area designated by a state agency as an area in which a disease or
pest that affects wildlife or livestock exists or may exist,
including a chronic wasting disease containment or surveillance
zone and an area subject to a quarantine authorized by Subtitle C,
Title 6, Agriculture Code. In calculating net to land of open-space
land located in or adjacent to a wildlife or livestock disease or
pest area, the chief appraiser shall take into consideration the
effect that the presence of the applicable disease or pest or the
designation of the area has on the net income from the land. 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.