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A BILL TO BE ENTITLED
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AN ACT
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relating to the ad valorem taxation of certain property used to |
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provide low-income or moderate-income housing. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.1825, Tax Code, is amended by |
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amending Subsections (q) and (r) and adding Subsections (q-1), |
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(q-2), (r-1), (r-2), and (r-3) to read as follows: |
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(q) If property qualifies for an exemption under this |
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section, the appraised value of the property is equal to the greater |
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of: |
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(1) the amount determined using the cost method of |
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appraisal under Section 23.011; or |
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(2) the amount determined using the income method of |
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appraisal under Section 23.012. |
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(q-1) In determining the appraised value of property that |
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qualifies for an exemption under this section using the cost method |
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of appraisal, the chief appraiser shall consider only data |
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pertaining to the cost of the land on which a housing project is |
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located and may not consider data pertaining to the cost of any |
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structure located on the land. |
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(q-2) In determining the appraised value of property that |
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qualifies for an exemption under this section using the income |
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method of appraisal [chief appraiser shall use the income method of
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appraisal as provided by Section 23.012 to determine the appraised
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value of the property. In appraising the property], the chief |
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appraiser shall: |
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(1) consider the restrictions provided by this section |
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on the income of the individuals or families to whom the dwelling |
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units of the housing project may be rented and the amount of rent |
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that may be charged for purposes of computing the actual net |
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operating [rental] income from the property [or projecting future
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rental income]; [and] |
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(2) use the actual net operating income from the |
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property; and |
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(3) use a [the same] capitalization rate of 13.5 |
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percent, except as provided by Subsection (r-1) [that the chief
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appraiser uses to appraise other rent-restricted properties]. |
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(r) The chief appraiser shall compute the actual net |
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operating income from property for purposes of this section in |
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accordance with generally accepted accounting principles [Not
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later than January 31 of each year, the appraisal district shall
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give public notice in the manner determined by the district,
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including posting on the district's website if applicable, of the
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capitalization rate to be used in that year to appraise property
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receiving an exemption under this section]. |
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(r-1) The chief appraiser may conduct a study of sales of |
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comparable properties that are located in the appraisal district to |
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determine the appropriate capitalization rate to use in determining |
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the market value of the property. If as a result of the study the |
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chief appraiser determines that a capitalization rate other than |
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13.5 percent is more appropriate for that purpose, the chief |
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appraiser shall use that rate. |
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(r-2) Not later than January 31 of each year, the chief |
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appraiser shall give public notice in the manner determined by the |
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appraisal district, including by posting on the district's website |
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if applicable, of the capitalization rate to be used in that year to |
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appraise property under this section if that rate is a rate other |
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than 13.5 percent. |
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(r-3) In connection with an annual study conducted under |
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Section 403.302, Government Code, the value of a property that |
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qualifies for an exemption under this section and that is selected |
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for appraisal must be determined in the manner required by this |
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section. |
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SECTION 2. (a) This Act applies only to ad valorem taxes |
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imposed for a tax year beginning on or after January 1, 2007. |
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(b) As soon as practicable after this Act takes effect, a |
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chief appraiser shall reappraise property for the 2007 tax year |
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that was appraised before the effective date of this Act if a change |
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in law made by this Act affects the appraised value of the property. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |