84R4217 LEH-D
	By: Creighton	S.B. No. 676

	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, 2016.