78R116 JD-D

By:  Christian                                                    H.B. No. 169



A BILL TO BE ENTITLED

AN ACT

relating to the capitalization rate used in the ad valorem tax 
appraisal of qualified timber land.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 23.74, Tax Code, is amended to read as 
follows:          
	Sec. 23.74.  CAPITALIZATION RATE.  The capitalization rate 
to be used in determining the appraised value of qualified timber 
land as provided by this subchapter is 10 percent or the interest 
rate specified by the Farm Credit Bank of Texas or its successor on 
December 31 of the preceding year plus 2-1/2 percentage points, 
whichever percentage is greater.
	SECTION 2.  (a)  This Act takes effect January 1, 2004.                        
	(b)  The change in law made by this Act applies only to the 
appraisal of qualified timber land for ad valorem tax purposes for a 
tax year that begins on or after the effective date of this Act.  The 
appraisal of qualified timber land for ad valorem tax purposes for a 
tax year that began before the effective date of this Act is 
governed by the law in effect when the appraisal of the land was 
made, and the former law is continued in effect for that purpose.