bill ends farming history rule for ag valuation

The text as introduced · 5,662 words

89R17526 DRS-D

By: Hopper
H.B. No. 4959

A BILL TO BE ENTITLED

AN ACT

relating to the eligibility of certain land for appraisal for ad

valorem tax purposes on the basis of its productivity value and the

consequences for those purposes of a change of use or sale of the

land.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. REPEAL OF CERTAIN ELIGIBILITY AND ADDITIONAL TAX

PROVISIONS IN SUBCHAPTERS C AND D, CHAPTER 23, TAX CODE

SECTION 1.01. Section 1.07(d), Tax Code, is amended to read

as follows:

(d) A notice required by Section 11.43(q), 11.45(d),

23.44(d), [ 23.46(c) or (f), ] 23.54(e), 23.541(c), [ 23.55(e), ]

23.551(a), 23.57(d), 23.76(e), 23.79(d), or 23.85(d) must be sent

by certified mail.

SECTION 1.02. Section 23.20(g), Tax Code, is amended to

read as follows:

(g) A waiver of a special appraisal of property under

Subchapter [ C, D, ] E, F, or G [ of this chapter ] does not constitute

a change of use of the property or diversion of the property to

another use for purposes of the imposition of additional taxes

under any of those subchapters.

SECTION 1.03. Section 23.42(a), Tax Code, is amended to

read as follows:

(a) An individual is entitled to have land the individual

[ he ] owns designated for agricultural use if, on January 1:

(1) [ the land has been devoted exclusively to or

developed continuously for agriculture for the three years

preceding the current year;

[ (2) ] the individual is using and intends to use the

land for agriculture as an occupation or a business venture for

profit during the current year; and

(2) [ (3) ] agriculture is the individual's primary

occupation and primary source of income.

SECTION 1.04. Sections 23.51(1) and (7), Tax Code, are

amended to read as follows:

(1) "Qualified open-space land" means land that is

[ currently ] devoted principally to agricultural use to the degree

of intensity generally accepted in the area [ and that has been

devoted principally to agricultural use or to production of timber

or forest products for five of the preceding seven years ] or land

that is used principally as an ecological laboratory by a public or

private college or university [ and that has been used principally

in that manner by a college or university for five of the preceding

seven years ]. Qualified open-space land includes all appurtenances

to the land. For the purposes of this subdivision, appurtenances to

the land means private roads, dams, reservoirs, water wells,

canals, ditches, terraces, and other reshapings of the soil,

fences, and riparian water rights. [ Notwithstanding the other

provisions of this subdivision, land that is currently devoted

principally to wildlife management as defined by Subdivision (7)(B)

or (C) to the degree of intensity generally accepted in the area

qualifies for appraisal as qualified open-space land under this

subchapter regardless of the manner in which the land was used in

any preceding year. ]

(7) "Wildlife management" means:

(A) actively using land in a manner that meets

the standards developed under Section 23.521 [ that at the time the

wildlife-management use began was appraised as qualified

open-space land under this subchapter or as qualified timber land

under Subchapter E ] in at least three of the following ways to

propagate a sustaining breeding, migrating, or wintering

population of indigenous wild animals for human use, including

food, medicine, or recreation:

(i) habitat control;

(ii) erosion control;

(iii) predator control;

(iv) providing supplemental supplies of

water;

(v) providing supplemental supplies of

food;

(vi) providing shelters; and

(vii) making of census counts to determine

population;

(B) actively using land to protect federally

listed endangered species under a federal permit if the land is:

(i) included in a habitat preserve and is

subject to a conservation easement created under Chapter 183,

Natural Resources Code; or

(ii) part of a conservation development

under a federally approved habitat conservation plan that restricts

the use of the land to protect federally listed endangered species;

or

(C) actively using land for a conservation or

restoration project to provide compensation for natural resource

damages pursuant to the Comprehensive Environmental Response,

Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et

seq.), the Oil Pollution Act of 1990 (33 U.S.C. Section 2701 et

seq.), the Federal Water Pollution Control Act (33 U.S.C. Section

1251 et seq.), or Chapter 40, Natural Resources Code.

SECTION 1.05. Sections 23.52(e) and (g), Tax Code, are

amended to read as follows:

(e) The [ For the purposes of Section 23.55 of this code,

the ] chief appraiser [ also ] shall determine the market value of

qualified open-space land and shall record both the market value

and the appraised value in the appraisal records.

(g) The category of land that qualifies under Section

23.51(7) is the native pasture category [ of the land under this

subchapter or Subchapter E, as applicable, before the

wildlife-management use began ].

SECTION 1.06. Section 23.524(e), Tax Code, is amended to

read as follows:

(e) Notwithstanding Subsection (b) or (c), the eligibility

of [ For the purposes of this subchapter, a change of use of the ]

land subject to this section for appraisal under this subchapter is

considered to have ended [ occurred ] on the day the period

prescribed by Subsection (c) begins if the owner has not fully

complied with the terms of the agreement described by Subsection

(b) on the date the agreement ends.

SECTION 1.07. Sections 23.551(a) and (d), Tax Code, are

amended to read as follows:

(a) If land appraised as provided by this subchapter is

owned by an individual 65 years of age or older, before making a

determination that [ a change in use of ] the land is no longer

eligible for appraisal under this subchapter [ has occurred ], the

chief appraiser shall deliver a written notice to the owner stating

that the chief appraiser believes [ a change in use of ] the land may

no longer be eligible for appraisal under this subchapter [ have

occurred ].

(d) If the chief appraiser does not receive a response on or

before the 60th day after the date the notice is mailed, the chief

appraiser must make a reasonable effort to locate the owner and

determine whether the land remains eligible to be appraised as

provided by this subchapter before determining that [ a change in

use of ] the land is no longer eligible for appraisal under this

subchapter [ has occurred ].

SECTION 1.08. Section 31.01(c), Tax Code, is amended to

read as follows:

(c) The tax bill or a separate statement accompanying the

tax bill shall:

(1) identify the property subject to the tax;

(2) state the appraised value, assessed value, and

taxable value of the property;

(3) if the property is land appraised as provided by

Subchapter [ C, D, ] E[ , ] or H, Chapter 23, state the market value and

the taxable value for purposes of deferred or additional taxation

as provided by Section [ 23.46, 23.55, ] 23.76[ , ] or 23.9807, as

applicable;

(4) state the assessment ratio for the taxing unit;

(5) state the type and amount of any partial exemption

applicable to the property, indicating whether it applies to

appraised or assessed value;

(6) state the total tax rate for the taxing unit;

(7) state the amount of tax due, the due date, and the

delinquency date;

(8) explain the payment option and discounts provided

by Sections 31.03 and 31.05, if available to the taxing unit's

taxpayers, and state the date on which each of the discount periods

provided by Section 31.05 concludes, if the discounts are

available;

(9) state the rates of penalty and interest imposed

for delinquent payment of the tax;

(10) include the name and telephone number of the

assessor for the taxing unit and, if different, of the collector for

the taxing unit;

(11) for real property, state for the current tax year

and each of the preceding five tax years:

(A) the appraised value and taxable value of the

property;

(B) the total tax rate for the taxing unit;

(C) the amount of taxes imposed on the property

by the taxing unit; and

(D) the difference, expressed as a percent

increase or decrease, as applicable, in the amount of taxes imposed

on the property by the taxing unit compared to the amount imposed

for the preceding tax year; and

(12) for real property, state the differences,

expressed as a percent increase or decrease, as applicable, in the

following for the current tax year as compared to the fifth tax year

before that tax year:

(A) the appraised value and taxable value of the

property;

(B) the total tax rate for the taxing unit; and

(C) the amount of taxes imposed on the property

by the taxing unit.

SECTION 1.09. Section 41.41(a), Tax Code, as effective

until January 1, 2027, is amended to read as follows:

(a) A property owner is entitled to protest before the

appraisal review board the following actions:

(1) determination of the appraised value of the

owner's property or, in the case of land appraised as provided by

Subchapter C, D, E, or H, Chapter 23, determination of its appraised

or market value;

(2) unequal appraisal of the owner's property;

(3) inclusion of the owner's property on the appraisal

records;

(4) denial to the property owner in whole or in part of

a partial exemption;

(4-a) determination that the owner's property does not

qualify for the circuit breaker limitation on appraised value

provided by Section 23.231;

(5) determination that the owner's land does not

qualify for appraisal as provided by Subchapter C, D, E, or H,

Chapter 23;

(6) identification of the taxing units in which the

owner's property is taxable in the case of the appraisal district's

appraisal roll;

(7) determination that the property owner is the owner

of property;

(8) a determination that a change in use of land

appraised under Subchapter [ C, D, ] E[ , ] or H, Chapter 23, has

occurred; or

(9) any other action of the chief appraiser, appraisal

district, or appraisal review board that applies to and adversely

affects the property owner.

SECTION 1.10. Section 41.41(a), Tax Code, as effective

January 1, 2027, is amended to read as follows:

(a) A property owner is entitled to protest before the

appraisal review board the following actions:

(1) determination of the appraised value of the

owner's property or, in the case of land appraised as provided by

Subchapter C, D, E, or H, Chapter 23, determination of its appraised

or market value;

(2) unequal appraisal of the owner's property;

(3) inclusion of the owner's property on the appraisal

records;

(4) denial to the property owner in whole or in part of

a partial exemption;

(5) determination that the owner's land does not

qualify for appraisal as provided by Subchapter C, D, E, or H,

Chapter 23;

(6) identification of the taxing units in which the

owner's property is taxable in the case of the appraisal district's

appraisal roll;

(7) determination that the property owner is the owner

of property;

(8) a determination that a change in use of land

appraised under Subchapter [ C, D, ] E[ , ] or H, Chapter 23, has

occurred; or

(9) any other action of the chief appraiser, appraisal

district, or appraisal review board that applies to and adversely

affects the property owner.

SECTION 1.11. Section 41.44(a), Tax Code, is amended to

read as follows:

(a) Except as provided by Subsections (b), (c), (c-1), and

(c-2), to be entitled to a hearing and determination of a protest,

the property owner initiating the protest must file a written

notice of the protest with the appraisal review board having

authority to hear the matter protested:

(1) not later than May 15 or the 30th day after the

date that notice to the property owner was delivered to the property

owner as provided by Section 25.19, whichever is later;

(2) in the case of a protest of a change in the

appraisal records ordered as provided by Subchapter A of this

chapter or by Chapter 25, not later than the 30th day after the date

notice of the change is delivered to the property owner;

(3) in the case of a determination that a change in the

use of land appraised under Subchapter [ C, D, ] E[ , ] or H, Chapter

23, has occurred, not later than the 30th day after the date the

notice of the determination is delivered to the property owner;

(4) in the case of a determination of eligibility for a

refund under Section 23.1243, not later than the 30th day after the

date the notice of the determination is delivered to the property

owner; or

(5) in the case of a protest of the modification or

denial of an application for an exemption under Section 11.35, or

the determination of an appropriate damage assessment rating for an

item of qualified property under that section, not later than the

30th day after the date the property owner receives the notice

required under Section 11.45(e).

SECTION 1.12. Section 60.022, Agriculture Code, is amended

to read as follows:

Sec. 60.022. CONTENTS OF PETITION. A petition filed under

Section 60.021 must:

(1) describe the boundaries of the proposed district

by metes and bounds or by lot and block number, if there is a

recorded map or plat and survey of the area;

(2) include a name for the proposed district, which

must include the term "Agricultural Development District";

(3) be signed by the landowners of any land to be

included within the proposed district and provide an acknowledgment

consistent with Section 121.001, Civil Practice and Remedies Code,

that the landowners desire the land to be included in the district;

(4) include the names of at least five persons who are

willing and qualified to serve as temporary directors of the

district;

(5) name each county in which any agricultural

facilities to be owned by the district are to be located;

(6) name each municipality in which any part of the

district is to be located;

(7) state the general nature of the proposed

development and the cost of the development as then estimated by the

petitioners;

(8) state the necessity and feasibility of the

proposed district and whether the district will serve the public

purpose of furthering agricultural interests;

(9) include a pledge that the district will make

payments in lieu of taxes to any school district and county in which

any real property to be owned by the district is located, in [ as

follows:

[ (A) ] annual payments to each entity that are

equal to the amount of taxes imposed on the real property by the

entity in the year of the district's creation; and

[ (B) a payment to each entity equal to the amount

that would be due under Section 23.55, Tax Code, on the district's

date of creation; and ]

(10) include a pledge that, if the district employs

more than 50 persons, the district will make payments in lieu of

taxes to any school district, in addition to those made under

Subdivision (9), in an amount negotiated between the district and

the school district.

SECTION 1.13. Section 21.0421(e), Property Code, is amended

to read as follows:

(e) This section does not[ :

[ (1) ] authorize groundwater rights appraised

separately from the real property under this section to be

appraised separately from real property for property tax appraisal

purposes[ ; or

[ (2) subject real property condemned for the purpose

described by Subsection (a) to an additional tax as provided by

Section 23.46 or 23.55, Tax Code ].

SECTION 1.14. Subsection (a), Section 23.46, Tax Code, is

transferred to Section 23.41, Tax Code, and redesignated as

Subsection (c), Section 23.41, Tax Code, to read as follows:

(c) [ (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 based on

its capacity to produce agricultural products in the appraisal

records.

SECTION 1.15. The following provisions of the Tax Code are

repealed:

(1) the heading to Section 23.46;

(2) Sections 23.46(b), (c), (d), (e), (e-1), (f), and

(g);

(3) Sections 23.47(c) and (d);

(4) Section 23.55; and

(5) Sections 23.58(c) and (d).

SECTION 1.16. (a) Sections 23.42(a), 23.51(1) and (7), and

23.52(g), Tax Code, as amended by this Act, apply only to the

appraisal of land for ad valorem tax purposes for a tax year that

begins on or after the effective date of this Act.

(b) The repeal of Sections 23.46 and 23.55, Tax Code, by

this Act does not affect an additional tax imposed as a result of a

change of use or sale of land appraised under Subchapter C or D,

Chapter 23, Tax Code, that occurred before the effective date of

this Act, and the former law is continued in effect for purposes of

that tax.

ARTICLE 2. REPEAL OF CERTAIN ELIGIBILITY AND ADDITIONAL TAX

PROVISIONS IN SUBCHAPTER D, CHAPTER 23, TAX CODE

SECTION 2.01. Section 1.07(d), Tax Code, is amended to read

as follows:

(d) A notice required by Section 11.43(q), 11.45(d),

23.44(d), 23.46(c) or (f), 23.54(e), 23.541(c), [ 23.55(e), ]

23.551(a), 23.57(d), 23.76(e), 23.79(d), or 23.85(d) must be sent

by certified mail.

SECTION 2.02. Section 23.20(g), Tax Code, is amended to

read as follows:

(g) A waiver of a special appraisal of property under

Subchapter C, [ D, ] E, F, or G [ of this chapter ] does not constitute

a change of use of the property or diversion of the property to

another use for purposes of the imposition of additional taxes

under any of those subchapters.

SECTION 2.03. Sections 23.51(1) and (7), Tax Code, are

amended to read as follows:

(1) "Qualified open-space land" means land that is

[ currently ] devoted principally to agricultural use to the degree

of intensity generally accepted in the area [ and that has been

devoted principally to agricultural use or to production of timber

or forest products for five of the preceding seven years ] or land

that is used principally as an ecological laboratory by a public or

private college or university [ and that has been used principally

in that manner by a college or university for five of the preceding

seven years ]. Qualified open-space land includes all appurtenances

to the land. For the purposes of this subdivision, appurtenances to

the land means private roads, dams, reservoirs, water wells,

canals, ditches, terraces, and other reshapings of the soil,

fences, and riparian water rights. [ Notwithstanding the other

provisions of this subdivision, land that is currently devoted

principally to wildlife management as defined by Subdivision (7)(B)

or (C) to the degree of intensity generally accepted in the area

qualifies for appraisal as qualified open-space land under this

subchapter regardless of the manner in which the land was used in

any preceding year. ]

(7) "Wildlife management" means:

(A) actively using land in a manner that meets

the standards developed under Section 23.521 [ that at the time the

wildlife-management use began was appraised as qualified

open-space land under this subchapter or as qualified timber land

under Subchapter E ] in at least three of the following ways to

propagate a sustaining breeding, migrating, or wintering

population of indigenous wild animals for human use, including

food, medicine, or recreation:

(i) habitat control;

(ii) erosion control;

(iii) predator control;

(iv) providing supplemental supplies of

water;

(v) providing supplemental supplies of

food;

(vi) providing shelters; and

(vii) making of census counts to determine

population;

(B) actively using land to protect federally

listed endangered species under a federal permit if the land is:

(i) included in a habitat preserve and is

subject to a conservation easement created under Chapter 183,

Natural Resources Code; or

(ii) part of a conservation development

under a federally approved habitat conservation plan that restricts

the use of the land to protect federally listed endangered species;

or

(C) actively using land for a conservation or

restoration project to provide compensation for natural resource

damages pursuant to the Comprehensive Environmental Response,

Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et

seq.), the Oil Pollution Act of 1990 (33 U.S.C. Section 2701 et

seq.), the Federal Water Pollution Control Act (33 U.S.C. Section

1251 et seq.), or Chapter 40, Natural Resources Code.

SECTION 2.04. Sections 23.52(e) and (g), Tax Code, are

amended to read as follows:

(e) The [ For the purposes of Section 23.55 of this code,

the ] chief appraiser [ also ] shall determine the market value of

qualified open-space land and shall record both the market value

and the appraised value in the appraisal records.

(g) The category of land that qualifies under Section

23.51(7) is the native pasture category [ of the land under this

subchapter or Subchapter E, as applicable, before the

wildlife-management use began ].

SECTION 2.05. Section 23.524(e), Tax Code, is amended to

read as follows:

(e) Notwithstanding Subsection (b) or (c), the eligibility

of [ For the purposes of this subchapter, a change of use of the ]

land subject to this section for appraisal under this subchapter is

considered to have ended [ occurred ] on the day the period

prescribed by Subsection (c) begins if the owner has not fully

complied with the terms of the agreement described by Subsection

(b) on the date the agreement ends.

SECTION 2.06. Sections 23.551(a) and (d), Tax Code, are

amended to read as follows:

(a) If land appraised as provided by this subchapter is

owned by an individual 65 years of age or older, before making a

determination that [ a change in use of ] the land is no longer

eligible for appraisal under this subchapter [ has occurred ], the

chief appraiser shall deliver a written notice to the owner stating

that the chief appraiser believes [ a change in use of ] the land may

no longer be eligible for appraisal under this subchapter [ have

occurred ].

(d) If the chief appraiser does not receive a response on or

before the 60th day after the date the notice is mailed, the chief

appraiser must make a reasonable effort to locate the owner and

determine whether the land remains eligible to be appraised as

provided by this subchapter before determining that [ a change in

use of ] the land is no longer eligible for appraisal under this

subchapter [ has occurred ].

SECTION 2.07. Sections 31.01(c) and (c-1), Tax Code, are

amended to read as follows:

(c) The tax bill or a separate statement accompanying the

tax bill shall:

(1) identify the property subject to the tax;

(2) state the appraised value, assessed value, and

taxable value of the property;

(3) if the property is land appraised as provided by

Subchapter C, [ D, ] E, or H, Chapter 23, state the market value and

the taxable value for purposes of deferred or additional taxation

as provided by Section 23.46, [ 23.55, ] 23.76, or 23.9807, as

applicable;

(4) if the property is land appraised as provided by

Subchapter D, Chapter 23, state the market value of the land;

(5) state the assessment ratio for the taxing unit;

(6) [ (5) ] state the type and amount of any partial

exemption applicable to the property, indicating whether it applies

to appraised or assessed value;

(7) [ (6) ] state the total tax rate for the taxing

unit;

(8) [ (7) ] state the amount of tax due, the due date,

and the delinquency date;

(9) [ (8) ] explain the payment option and discounts

provided by Sections 31.03 and 31.05, if available to the taxing

unit's taxpayers, and state the date on which each of the discount

periods provided by Section 31.05 concludes, if the discounts are

available;

(10) [ (9) ] state the rates of penalty and interest

imposed for delinquent payment of the tax;

(11) [ (10) ] include the name and telephone number of

the assessor for the taxing unit and, if different, of the collector

for the taxing unit;

(12) [ (11) ] for real property, state for the current

tax year and each of the preceding five tax years:

(A) the appraised value and taxable value of the

property;

(B) the total tax rate for the taxing unit;

(C) the amount of taxes imposed on the property

by the taxing unit; and

(D) the difference, expressed as a percent

increase or decrease, as applicable, in the amount of taxes imposed

on the property by the taxing unit compared to the amount imposed

for the preceding tax year; and

(13) [ (12) ] for real property, state the differences,

expressed as a percent increase or decrease, as applicable, in the

following for the current tax year as compared to the fifth tax year

before that tax year:

(A) the appraised value and taxable value of the

property;

(B) the total tax rate for the taxing unit; and

(C) the amount of taxes imposed on the property

by the taxing unit.

(c-1) If for any of the preceding six tax years any

information required by Subsection (c)(12) [ (c)(11) ] or (13) [ (12) ]

to be included in a tax bill or separate statement is unavailable,

the tax bill or statement must state that the information is not

available for that year.

SECTION 2.08. Section 41.41(a), Tax Code, as effective

until January 1, 2027, is amended to read as follows:

(a) A property owner is entitled to protest before the

appraisal review board the following actions:

(1) determination of the appraised value of the

owner's property or, in the case of land appraised as provided by

Subchapter C, D, E, or H, Chapter 23, determination of its appraised

or market value;

(2) unequal appraisal of the owner's property;

(3) inclusion of the owner's property on the appraisal

records;

(4) denial to the property owner in whole or in part of

a partial exemption;

(4-a) determination that the owner's property does not

qualify for the circuit breaker limitation on appraised value

provided by Section 23.231;

(5) determination that the owner's land does not

qualify for appraisal as provided by Subchapter C, D, E, or H,

Chapter 23;

(6) identification of the taxing units in which the

owner's property is taxable in the case of the appraisal district's

appraisal roll;

(7) determination that the property owner is the owner

of property;

(8) a determination that a change in use of land

appraised under Subchapter C, [ D, ] E, or H, Chapter 23, has

occurred; or

(9) any other action of the chief appraiser, appraisal

district, or appraisal review board that applies to and adversely

affects the property owner.

SECTION 2.09. Section 41.41(a), Tax Code, as effective

January 1, 2027, is amended to read as follows:

(a) A property owner is entitled to protest before the

appraisal review board the following actions:

(1) determination of the appraised value of the

owner's property or, in the case of land appraised as provided by

Subchapter C, D, E, or H, Chapter 23, determination of its appraised

or market value;

(2) unequal appraisal of the owner's property;

(3) inclusion of the owner's property on the appraisal

records;

(4) denial to the property owner in whole or in part of

a partial exemption;

(5) determination that the owner's land does not

qualify for appraisal as provided by Subchapter C, D, E, or H,

Chapter 23;

(6) identification of the taxing units in which the

owner's property is taxable in the case of the appraisal district's

appraisal roll;

(7) determination that the property owner is the owner

of property;

(8) a determination that a change in use of land

appraised under Subchapter C, [ D, ] E, or H, Chapter 23, has

occurred; or

(9) any other action of the chief appraiser, appraisal

district, or appraisal review board that applies to and adversely

affects the property owner.

SECTION 2.10. Section 41.44(a), Tax Code, is amended to

read as follows:

(a) Except as provided by Subsections (b), (c), (c-1), and

(c-2), to be entitled to a hearing and determination of a protest,

the property owner initiating the protest must file a written

notice of the protest with the appraisal review board having

authority to hear the matter protested:

(1) not later than May 15 or the 30th day after the

date that notice to the property owner was delivered to the property

owner as provided by Section 25.19, whichever is later;

(2) in the case of a protest of a change in the

appraisal records ordered as provided by Subchapter A of this

chapter or by Chapter 25, not later than the 30th day after the date

notice of the change is delivered to the property owner;

(3) in the case of a determination that a change in the

use of land appraised under Subchapter C, [ D, ] E, or H, Chapter 23,

has occurred, not later than the 30th day after the date the notice

of the determination is delivered to the property owner;

(4) in the case of a determination of eligibility for a

refund under Section 23.1243, not later than the 30th day after the

date the notice of the determination is delivered to the property

owner; or

(5) in the case of a protest of the modification or

denial of an application for an exemption under Section 11.35, or

the determination of an appropriate damage assessment rating for an

item of qualified property under that section, not later than the

30th day after the date the property owner receives the notice

required under Section 11.45(e).

SECTION 2.11. Section 60.022, Agriculture Code, is amended

to read as follows:

Sec. 60.022. CONTENTS OF PETITION. A petition filed under

Section 60.021 must:

(1) describe the boundaries of the proposed district

by metes and bounds or by lot and block number, if there is a

recorded map or plat and survey of the area;

(2) include a name for the proposed district, which

must include the term "Agricultural Development District";

(3) be signed by the landowners of any land to be

included within the proposed district and provide an acknowledgment

consistent with Section 121.001, Civil Practice and Remedies Code,

that the landowners desire the land to be included in the district;

(4) include the names of at least five persons who are

willing and qualified to serve as temporary directors of the

district;

(5) name each county in which any agricultural

facilities to be owned by the district are to be located;

(6) name each municipality in which any part of the

district is to be located;

(7) state the general nature of the proposed

development and the cost of the development as then estimated by the

petitioners;

(8) state the necessity and feasibility of the

proposed district and whether the district will serve the public

purpose of furthering agricultural interests;

(9) include a pledge that the district will make

payments in lieu of taxes to any school district and county in which

any real property to be owned by the district is located, in [ as

follows:

[ (A) ] annual payments to each entity that are

equal to the amount of taxes imposed on the real property by the

entity in the year of the district's creation; and

[ (B) a payment to each entity equal to the amount

that would be due under Section 23.55, Tax Code, on the district's

date of creation; and ]

(10) include a pledge that, if the district employs

more than 50 persons, the district will make payments in lieu of

taxes to any school district, in addition to those made under

Subdivision (9), in an amount negotiated between the district and

the school district.

SECTION 2.12. Section 21.0421(e), Property Code, is amended

to read as follows:

(e) This section does not:

(1) authorize groundwater rights appraised separately

from the real property under this section to be appraised

separately from real property for property tax appraisal purposes;

or

(2) subject real property condemned for the purpose

described by Subsection (a) to an additional tax as provided by

Section 23.46 [ or 23.55 ], Tax Code.

SECTION 2.13. The following provisions of the Tax Code are

repealed:

(1) Section 23.55; and

(2) Sections 23.58(c) and (d).

SECTION 2.14. (a) Sections 23.51(1) and (7) and 23.52(g),

Tax Code, as amended by this Act, apply only to the appraisal of

land for ad valorem tax purposes for a tax year that begins on or

after the effective date of this Act.

(b) The repeal of Section 23.55, Tax Code, by this Act does

not affect an additional tax imposed as a result of a change of use

of land appraised under Subchapter D, Chapter 23, Tax Code, that

occurred before the effective date of this Act, and the former law

is continued in effect for purposes of that tax.

ARTICLE 3. EFFECTIVE DATE

SECTION 3.01. (a) Except as otherwise provided by this

section, this Act takes effect January 1, 2026.

(b) Article 1 of this Act takes effect only if the

constitutional amendment proposed by the 89th Legislature, Regular

Session, 2025, repealing the provisions that require that land be

devoted to agricultural use for a specified period to be eligible

for appraisal for ad valorem tax purposes on the basis of its

productivity value and that subject land appraised on that basis to

an additional tax when the land is diverted to a purpose other than

agricultural use or sold is approved by the voters. If that

amendment is not approved by the voters, Article 1 of this Act has

no effect.

(c) Article 2 of this Act takes effect only if Article 1 of

this Act does not take effect. If Article 1 of this Act takes

effect, Article 2 of this Act has no effect.