| 1 | 1 | | 86R13027 SMH-D |
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| 2 | 2 | | By: Murphy H.B. No. 4528 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the ad valorem taxation of a leasehold or other |
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| 8 | 8 | | possessory interest in certain property owned by a municipality. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 25.07, Tax Code, is amended by amending |
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| 11 | 11 | | Subsection (b) and adding Subsection (d) to read as follows: |
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| 12 | 12 | | (b) Except as provided by Sections 11.11(b) and (c) and by |
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| 13 | 13 | | Subsection (d) of this section, a leasehold or other possessory |
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| 14 | 14 | | interest in exempt property may not be listed if: |
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| 15 | 15 | | (1) the property is permanent university fund land; |
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| 16 | 16 | | (2) the property is county public school fund |
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| 17 | 17 | | agricultural land; |
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| 18 | 18 | | (3) the property is a part of a public transportation |
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| 19 | 19 | | facility owned by a municipality or county and: |
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| 20 | 20 | | (A) is an airport passenger terminal building or |
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| 21 | 21 | | a building used primarily for maintenance of aircraft or other |
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| 22 | 22 | | aircraft services, for aircraft equipment storage, or for air |
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| 23 | 23 | | cargo; |
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| 24 | 24 | | (B) is an airport fueling system facility; |
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| 25 | 25 | | (C) is in a foreign-trade zone: |
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| 26 | 26 | | (i) that has been granted to a joint airport |
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| 27 | 27 | | board under Subchapter C, Chapter 681, Business & Commerce Code; |
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| 28 | 28 | | (ii) the area of which in the portion of the |
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| 29 | 29 | | zone located in the airport operated by the joint airport board does |
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| 30 | 30 | | not exceed 2,500 acres; and |
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| 31 | 31 | | (iii) that is established and operating |
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| 32 | 32 | | pursuant to federal law; or |
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| 33 | 33 | | (D)(i) is in a foreign trade zone established |
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| 34 | 34 | | pursuant to federal law after June 1, 1991, that operates pursuant |
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| 35 | 35 | | to federal law; |
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| 36 | 36 | | (ii) is contiguous to or has access via a |
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| 37 | 37 | | taxiway to an airport located in two counties, one of which has a |
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| 38 | 38 | | population of 500,000 or more according to the federal decennial |
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| 39 | 39 | | census most recently preceding the establishment of the foreign |
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| 40 | 40 | | trade zone; and |
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| 41 | 41 | | (iii) is owned, directly or through a |
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| 42 | 42 | | corporation organized under the Development Corporation Act |
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| 43 | 43 | | (Subtitle C1, Title 12, Local Government Code), by the same |
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| 44 | 44 | | municipality that owns the airport; |
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| 45 | 45 | | (4) the interest is in a part of: |
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| 46 | 46 | | (A) a park, market, fairground, or similar public |
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| 47 | 47 | | facility that is owned by a municipality; or |
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| 48 | 48 | | (B) a convention center, visitor center, sports |
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| 49 | 49 | | facility with permanent seating, concert hall, arena, or stadium |
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| 50 | 50 | | that is owned by a municipality as such leasehold or possessory |
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| 51 | 51 | | interest serves a governmental, municipal, or public purpose or |
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| 52 | 52 | | function when the facility is open to the public, regardless of |
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| 53 | 53 | | whether a fee is charged for admission; |
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| 54 | 54 | | (5) the interest involves only the right to use the |
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| 55 | 55 | | property for grazing or other agricultural purposes; |
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| 56 | 56 | | (6) the property is: |
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| 57 | 57 | | (A) owned by a municipality, a public port, or a |
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| 58 | 58 | | navigation district created or operating under Section 59, Article |
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| 59 | 59 | | XVI, Texas Constitution, or under a statute enacted under Section |
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| 60 | 60 | | 59, Article XVI, Texas Constitution; and |
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| 61 | 61 | | (B) used as an aid or facility incidental to or |
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| 62 | 62 | | useful in the operation or development of a port or waterway or in |
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| 63 | 63 | | aid of navigation-related commerce; or |
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| 64 | 64 | | (7) the property is part of a rail facility owned by a |
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| 65 | 65 | | rural rail transportation district operating under Chapter 172, |
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| 66 | 66 | | Transportation Code. |
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| 67 | 67 | | (d) Subsection (b)(4)(B) does not prohibit the listing of a |
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| 68 | 68 | | leasehold or other possessory interest in real property for |
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| 69 | 69 | | purposes of taxation of the possessory interest by a taxing unit |
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| 70 | 70 | | other than the municipality that owns the property unless the |
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| 71 | 71 | | governing body of the taxing unit approves the exemption of the |
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| 72 | 72 | | possessory interest in the manner provided by law for official |
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| 73 | 73 | | action by the governing body. |
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| 74 | 74 | | SECTION 2. The change in law made by this Act applies only |
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| 75 | 75 | | to the taxation for a tax year beginning on or after the effective |
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| 76 | 76 | | date of this Act of a leasehold or other possessory interest in a |
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| 77 | 77 | | facility completed after January 1, 2019. |
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| 78 | 78 | | SECTION 3. This Act takes effect January 1, 2020. |
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