The bill amends Section 11.1825 of the Texas Tax Code to establish new requirements for appraisal districts regarding the determination of the capitalization rate used for ad valorem tax purposes on low-income housing properties. A new subsection (r-1) mandates that appraisal districts must post the methodology used to develop the proposed capitalization rate on their websites, if they maintain one. Furthermore, the districts are prohibited from notifying the public of the capitalization rate until this methodology has been posted and the public has been given a reasonable opportunity to comment on its applicability.

Additionally, the bill specifies that the methodology for developing the capitalization rate cannot rely solely on a percentage change from the previous year's rate and must incorporate viable economic metrics relevant to the market where the rate will be applied. This legislation is set to take effect on January 1, 2026, and will apply to ad valorem tax years beginning on or after that date.

Statutes affected:
Introduced: Tax Code 11.1825 (Tax Code 11)