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.