| 1 | 1 | | 88R4412 RDS-D |
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| 2 | 2 | | By: Lozano H.B. No. 3163 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the calculation of net to land in the appraisal of |
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| 8 | 8 | | open-space land for ad valorem tax purposes. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 23.51(4), Tax Code, is amended to read as |
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| 11 | 11 | | follows: |
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| 12 | 12 | | (4) "Net to land" means the average annual net income |
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| 13 | 13 | | derived from the use of open-space land that would have been earned |
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| 14 | 14 | | from the land during the five-year period preceding the year before |
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| 15 | 15 | | the appraisal by an owner using ordinary prudence in the management |
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| 16 | 16 | | of the land and the farm crops or livestock produced or supported on |
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| 17 | 17 | | the land and, in addition, any income received from hunting or |
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| 18 | 18 | | recreational leases. The chief appraiser shall calculate net to |
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| 19 | 19 | | land by considering the income that would be due to the owner of the |
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| 20 | 20 | | land under a cash lease[, share lease, or whatever lease] |
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| 21 | 21 | | arrangement [is] typical in that area for that category of land, and |
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| 22 | 22 | | all expenses directly attributable to the agricultural use of the |
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| 23 | 23 | | land by the owner shall be subtracted from this owner income and the |
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| 24 | 24 | | results shall be used in income capitalization. In calculating net |
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| 25 | 25 | | to land, a reasonable deduction shall be made for any depletion that |
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| 26 | 26 | | occurs of underground water used in the agricultural operation. |
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| 27 | 27 | | For land that qualifies under Subdivision (7) for appraisal under |
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| 28 | 28 | | this subchapter, the chief appraiser may not consider in the |
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| 29 | 29 | | calculation of net to land the income that would be due to the owner |
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| 30 | 30 | | under a hunting or recreational lease of the land. |
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| 31 | 31 | | SECTION 2. The change in law made by this Act applies only |
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| 32 | 32 | | to the appraisal of open-space land for a tax year that begins on or |
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| 33 | 33 | | after the effective date of this Act. |
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| 34 | 34 | | SECTION 3. This Act takes effect January 1, 2024. |
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