88R8489 SHH-D
By: Murr H.B. No. 4576
A BILL TO BE ENTITLED
AN ACT
relating to a limitation on increases in the appraised value for ad
valorem tax purposes of agricultural or open-space land.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 23.41, Tax Code, is amended by amending
Subsection (a) and adding Subsection (a-1) to read as follows:
(a) Except as provided by Subsection (a-1), land [Land]
designated for agricultural use is appraised at its value based on
the land's capacity to produce agricultural products. The value of
land based on its capacity to produce agricultural products is
determined by capitalizing the average net income the land would
have yielded under prudent management from production of
agricultural products during the five years preceding the current
year. However, if the value of land as determined by capitalization
of average net income exceeds the market value of the land as
determined by other generally accepted appraisal methods, the land
shall be appraised by application of the other appraisal methods.
(a-1) The appraisal office may not increase the appraised
value of land designated for agricultural use to an amount that
exceeds 110 percent of the appraised value of the land for the
preceding tax year. The limitation provided by this subsection
takes effect as to a parcel of land on January 1 of the later of the
2024 tax year or the tax year following the first tax year the owner
of the land qualifies the land for designation for agricultural use
under this subchapter and expires on January 1 of the first tax year
the owner of the land when the limitation took effect ceases to
qualify the land for the designation.
SECTION 2. Section 23.46(a), Tax Code, is amended to read as
follows:
(a) When appraising land designated for agricultural use,
the chief appraiser also shall appraise the land at its market value
and shall record both the market value and the value according to
this subchapter [based on its capacity to produce agricultural
products] in the appraisal records.
SECTION 3. Section 23.52, Tax Code, is amended by amending
Subsection (a) and adding Subsection (a-1) to read as follows:
(a) Except as provided by Subsection (a-1), the [The]
appraised value of qualified open-space land is determined on the
basis of the category of the land, using accepted income
capitalization methods applied to average net to land. The
appraised value so determined may not exceed the market value as
determined by other appraisal methods.
(a-1) The appraisal office may not increase the appraised
value of qualified open-space land to an amount that exceeds 110
percent of the appraised value of the land for the preceding tax
year. The limitation provided by this subsection takes effect as to
a parcel of land on January 1 of the later of the 2024 tax year or
the tax year following the first tax year the owner of the land
qualifies the land for appraisal as qualified open-space land under
this subchapter and expires on January 1 of the first tax year the
owner of the land when the limitation took effect ceases to qualify
the land for the appraisal.
SECTION 4. Section 403.302, Government Code, is amended by
amending Subsection (d) and adding Subsection (i-1) to read as
follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by former Section 311.003(e), Tax Code, before May 31,
1999, and within the boundaries of the zone as those boundaries
existed on September 1, 1999, including subsequent improvements to
the property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(6) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(7) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(9) a portion of the market value of property not
otherwise fully taxable by the district at market value because of
action required by statute or the constitution of this state, other
than Section 11.311, Tax Code, that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted;
(10) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(12) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code;
(13) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section; [and]
(14) the total dollar amount of any exemptions granted
under Section 11.35, Tax Code; and
(15) the amount by which the lesser of the market value
or the productivity value of land to which Subchapter C or D,
Chapter 23, Tax Code, applies exceeds the appraised value of the
land as calculated under that subchapter.
(i-1) If the comptroller determines in the study that the
market value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is valid, the comptroller,
in determining the taxable value of property in the school district
under Subsection (d), shall for purposes of Subsection (d)(15)
subtract from the lesser of the market value or the productivity
value as determined by the appraisal district of land to which
Subchapter C or D, Chapter 23, Tax Code, applies the amount by which
that amount exceeds the appraised value of the land as calculated by
the appraisal district under that subchapter. If the comptroller
determines in the study that the market value of property in a
school district as determined by the appraisal district that
appraises property for the school district, less the total of the
amounts and values listed in Subsection (d) as determined by that
appraisal district, is not valid, the comptroller, in determining
the taxable value of property in the school district under
Subsection (d), shall for purposes of Subsection (d)(15) subtract
from the lesser of the market value or productivity value as
estimated by the comptroller of land to which Subchapter C or D,
Chapter 23, Tax Code, applies the amount by which that amount
exceeds the appraised value of the land as calculated by the
appraisal district under that subchapter.
SECTION 5. This Act applies only to the appraisal for ad
valorem tax purposes of land designated for agricultural use or
qualified open-space land for a tax year that begins on or after the
effective date of this Act.
SECTION 6. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, to authorize the legislature to limit the
maximum appraised value for ad valorem tax purposes in a tax year of
land designated for agricultural use or open-space land devoted to
farm, ranch, or wildlife management purposes to a specified
percentage of the appraised value of the land for the preceding tax
year is approved by the voters. If that amendment is not approved
by the voters, this Act has no effect.