BILL ANALYSIS Senate Research Center S.B. 2526 By: Campbell Local Government 4/29/2023 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Texas appraisal districts typically appraise privately owned Type I municipal solid waste (MSW) landfill property and necessary surrounding land by using the market data comparison method (comparable sales data of unimproved land). However, a small minority of appraisal districts attempt to use an income method, which ends up taxing the owner on the income generated from the intangible assets; namely, Texas Commission on Environmental Quality MSW disposal permits, municipal contracts, good will, and a skilled and trained workforce. Including intangible property in the appraisal of real property is a violation of the Property Tax Code's prohibition against appraising and taxing intangible property. Such a violative appraisal results in double taxation because landfill companies already pay franchise tax on the income generated from intangible assets. S.B. 2526 requires appraisal districts to use the market data comparison method when appraising landfill property and the necessary surrounding land. This method ensures that landfills are fairly appraised based on current market values and prevents landfill owners from being double taxed on intangible assets. Benefits: Clarity for chief appraisers Consistency in government appraisal across Texas counties Aligns application of Texas Tax Code provisions Improves the law for landfills that essentially operate for a public purpose As proposed, S.B. 2526 amends current law relating to the appraisal and ad valorem taxation of Type 1 municipal solid waste landfills. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 23, Tax Code, by adding Section 23.27, as follows: Requires the chief appraiser, in appraising real property comprising a regulatory "buffer zone," "facility" area, or real property surrounded by a regulatory "buffer zone," as those terms are used in Title 30, Section 330.3 of the Texas Administrative Code, to use the market data comparison method as described by Section 23.013 (Market Data Comparison Method of Appraisal) using comparable sales data of unimproved land divided by 12. SECTION 2. Effective date: September 1, 2023.
BILL ANALYSIS
Senate Research Center S.B. 2526
By: Campbell
Local Government
4/29/2023
As Filed
Senate Research Center
S.B. 2526
By: Campbell
Local Government
4/29/2023
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Texas appraisal districts typically appraise privately owned Type I municipal solid waste (MSW) landfill property and necessary surrounding land by using the market data comparison method (comparable sales data of unimproved land). However, a small minority of appraisal districts attempt to use an income method, which ends up taxing the owner on the income generated from the intangible assets; namely, Texas Commission on Environmental Quality MSW disposal permits, municipal contracts, good will, and a skilled and trained workforce.
Including intangible property in the appraisal of real property is a violation of the Property Tax Code's prohibition against appraising and taxing intangible property. Such a violative appraisal results in double taxation because landfill companies already pay franchise tax on the income generated from intangible assets.
S.B. 2526 requires appraisal districts to use the market data comparison method when appraising landfill property and the necessary surrounding land. This method ensures that landfills are fairly appraised based on current market values and prevents landfill owners from being double taxed on intangible assets.
Benefits:
As proposed, S.B. 2526 amends current law relating to the appraisal and ad valorem taxation of Type 1 municipal solid waste landfills.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 23, Tax Code, by adding Section 23.27, as follows:
Requires the chief appraiser, in appraising real property comprising a regulatory "buffer zone," "facility" area, or real property surrounded by a regulatory "buffer zone," as those terms are used in Title 30, Section 330.3 of the Texas Administrative Code, to use the market data comparison method as described by Section 23.013 (Market Data Comparison Method of Appraisal) using comparable sales data of unimproved land divided by 12.
SECTION 2. Effective date: September 1, 2023.