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.