H.B. No. 240 amends Section 11.16(c) of the Texas Tax Code to clarify the definitions related to the exemption from ad valorem taxation for farm products in the hands of the producer. The bill specifies that "farm products" will now include eggs and timber, specifically standing timber, as defined by Section 9.102 of the Business & Commerce Code. Additionally, the definition of "in the hands of the producer" is refined to indicate that for farm products other than timber, it refers to ownership by the person responsible for their physical requirements as of January 1 of the tax year. For timber, it clarifies that it pertains to standing timber or harvested timber located on the property where it was produced.

The bill is set to take effect on January 1, 2027, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature in 2025. If the amendment is not approved by voters, the provisions of this Act will not take effect.

Statutes affected:
Introduced: Tax Code 11.16 (Tax Code 11)