78R6010 RCJ-F

By:  Eiland                                                       H.B. No. 1460



A BILL TO BE ENTITLED

AN ACT

relating to the income method of appraisal of real property for ad 
valorem tax purposes.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 23.012, Tax Code, is amended to read as 
follows:         
	Sec. 23.012.  Income Method of Appraisal. If the chief 
appraiser uses the income method of appraisal to determine the 
market value of real property, the chief appraiser shall:
		(1)  use [rental] income and expense data pertaining to 
the property if possible and applicable;
		(2)  make any projections of future [rental] income and 
expenses only from clear and appropriate evidence;
		(3)  use data from generally accepted sources in 
determining an appropriate capitalization rate; and
		(4)  determine a capitalization rate for 
income-producing property that includes a reasonable return on 
investment, taking into account the risk associated with the 
investment.
	SECTION 2.  This Act takes effect January 1, 2004, and 
applies only to the appraisal of real property for ad valorem tax 
purposes for a tax year that begins on or after that date.