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.