By Gray                                               H.B. No. 2992
         77R9232 T                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the income method of appraisal for property tax
 1-3     purposes.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 23.012, Tax Code, is amended to read as
 1-6     follows:
 1-7           Sec. 23.012.  Income Method of Appraisal. If the chief
 1-8     appraiser uses the income method of appraisal to determine the
 1-9     market value of real property, the chief appraiser shall:
1-10                 (1)  use [rental] income and expense data pertaining to
1-11     the property if possible and applicable;
1-12                 (2)  make any projections of future [rental] income and
1-13     expenses only from clear and appropriate evidence;
1-14                 (3)  use data from generally accepted sources in
1-15     determining an appropriate capitalization rate; and
1-16                 (4)  determine a capitalization rate for
1-17     income-producing property that includes a reasonable return on
1-18     investment, taking into account the risk associated with the
1-19     investment.
1-20           SECTION 2.  EFFECTIVE DATE. This Act takes effect immediately
1-21     if it receives a vote of two-thirds of all the members elected to
1-22     each house, as provided by Section 39, Article III, Texas
1-23     Constitution.  If this Act does not receive the vote necessary for
1-24     immediate effect, this Act takes effect September 1, 2001.