87R6946 RDS-D
 
  By: Creighton S.B. No. 1644
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the determination of the market value of property for ad
  valorem tax purposes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 23.0101, Tax Code, is amended to read as
  follows:
         Sec. 23.0101.  CONSIDERATION OF ALTERNATE APPRAISAL
  METHODS. (a)  In this section, "commercial real property" means
  real property zoned or otherwise authorized for and actually used
  for a purpose other than single-family use, multifamily use, heavy
  industrial use, or use as a quarry.
         (b) Except as provided by Subsection (c), in [In]
  determining the market value of property, the chief appraiser shall
  consider the cost, income, and market data comparison methods of
  appraisal and use the most appropriate method.
         (c)  The chief appraiser may not use the income method of
  appraisal to determine the market value of commercial real
  property.
         SECTION 2.  Section 23.012(a), Tax Code, is amended to read
  as follows:
         (a)  If the chief appraiser uses the income method of
  appraisal [income method of appraisal is the most appropriate
  method to use] to determine the market value of real property, the
  chief appraiser shall:
               (1)  analyze comparable rental data available to the
  chief appraiser or the potential earnings capacity of the property,
  or both, to estimate the gross income potential of the property;
               (2)  analyze comparable operating expense data
  available to the chief appraiser to estimate the operating expenses
  of the property;
               (3)  analyze comparable data available to the chief
  appraiser to estimate rates of capitalization or rates of discount;
  and
               (4)  base projections of future rent or income
  potential and expenses on reasonably clear and appropriate
  evidence.
         SECTION 3.  This Act applies only to the determination of the
  market value of property for ad valorem tax purposes for a tax year
  that begins on or after the effective date of this Act.
         SECTION 4.  This Act takes effect January 1, 2022.