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A BILL TO BE ENTITLED
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AN ACT
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relating to the determination of the market value of property for ad |
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valorem tax purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.0101, Tax Code, is amended to read as |
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follows: |
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Sec. 23.0101. CONSIDERATION OF ALTERNATE APPRAISAL |
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METHODS. (a) In this section, "commercial real property" means |
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real property zoned or otherwise authorized for and actually used |
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for a purpose other than single-family use, multifamily use, heavy |
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industrial use, or use as a quarry. |
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(b) Except as provided by Subsection (c), in [In] |
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determining the market value of property, the chief appraiser shall |
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consider the cost, income, and market data comparison methods of |
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appraisal and use the most appropriate method. |
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(c) The chief appraiser may not use the income method of |
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appraisal to determine the market value of commercial real |
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property. |
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SECTION 2. Section 23.012(a), Tax Code, is amended to read |
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as follows: |
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(a) If the chief appraiser uses the income method of |
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appraisal [income method of appraisal is the most appropriate |
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method to use] to determine the market value of real property, the |
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chief appraiser shall: |
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(1) analyze comparable rental data available to the |
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chief appraiser or the potential earnings capacity of the property, |
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or both, to estimate the gross income potential of the property; |
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(2) analyze comparable operating expense data |
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available to the chief appraiser to estimate the operating expenses |
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of the property; |
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(3) analyze comparable data available to the chief |
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appraiser to estimate rates of capitalization or rates of discount; |
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and |
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(4) base projections of future rent or income |
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potential and expenses on reasonably clear and appropriate |
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evidence. |
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SECTION 3. This Act applies only to the determination of the |
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market value of property for ad valorem tax purposes for a tax year |
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that begins on or after the effective date of this Act. |
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SECTION 4. This Act takes effect January 1, 2024. |