HBA-LJP H.B. 2992 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2992
By: Gray
Ways & Means
3/30/2001
Introduced



BACKGROUND AND PURPOSE 

Under current law, a chief appraiser is required to place a market value on
a wide array of incomeproducing properties and is authorized to use the
income method of appraisal on these properties for tax purposes.  The chief
appraiser may use the cost method, the market data comparison method, or
the income method of appraisal or a combination of the three appraisal
methods to determine the market value of real property.  The income method
of appraisal requires the chief appraiser to use rental income to make such
a determination; however, rental income does not cover other types of real
property which generates "non-rental" income.  The Texas Constitution
requires that taxation be equal and uniform, but the rental income method
may be a possible violation of the constitution because rental income
producing properties will be valuated and taxed differently than non-rental
producing property.  House Bill 2992 removes rental income from the income
method of appraisal the chief appraiser uses to determine the market value
of real property for tax purposes. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2992 amends the Tax Code to remove rental income from the income
method of appraisal the chief appraiser uses to determine the market value
of real property for tax purposes. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.