1-1 By: Nixon S.B. No. 1375
1-2 (In the Senate - Filed March 13, 1997; March 19, 1997, read
1-3 first time and referred to Committee on Finance; April 28, 1997,
1-4 reported favorably, as amended, by the following vote: Yeas 13,
1-5 Nays 0; April 28, 1997, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Nelson
1-7 Amend S.B. No. 1375 by adding the following sections to the bill,
1-8 appropriately numbered, and renumbering subsequent sections of the
1-9 bill accordingly:
1-10 SECTION ___. Subchapter A, Chapter 41, Tax Code, is amended
1-11 by adding Section 41.035 to read as follows:
1-12 Sec. 41.035. CHALLENGE RELATING TO CERTAIN TAXABLE
1-13 LEASEHOLDS. In a challenge filed under this subchapter that
1-14 relates to a taxable leasehold or other possessory interest in real
1-15 property, if the real property is owned by this state or a
1-16 political subdivision of this state, the state or political
1-17 subdivision, as appropriate, may intervene in or be a party to the
1-18 challenge. The state or political subdivision is not a necessary
1-19 party to the challenge.
1-20 SECTION ___. Subchapter C, Chapter 41, Tax Code, is amended
1-21 by adding Section 41.414 to read as follows:
1-22 Sec. 41.414. PROTEST RELATING TO CERTAIN TAXABLE LEASEHOLDS.
1-23 Notwithstanding Section 41.413 or any other law to the contrary,
1-24 the state or a political subdivision of this state, as appropriate,
1-25 may intervene in or be a party to a challenge filed under this
1-26 subchapter if the challenge relates to a taxable leasehold or other
1-27 possessory interest in real property that is owned by this state or
1-28 the political subdivision. The state or political subdivision is
1-29 not a necessary party to the protest.
1-30 SECTION ___. Section 42.031, Tax Code, is amended by adding
1-31 Subsection (c) to read as follows:
1-32 (c) If an order of the appraisal review board relates to a
1-33 leasehold or other possessory interest in real property that is
1-34 owned by this state or a political subdivision of this state, the
1-35 state or the political subdivision, as appropriate, may intervene
1-36 in or be a party to an appeal of the board order. To the extent of
1-37 a conflict between Subsection (b) and this subsection, this
1-38 subsection prevails. The state or political subdivision is not a
1-39 necessary party to the appeal.
1-40 A BILL TO BE ENTITLED
1-41 AN ACT
1-42 relating to the appraisal of certain leaseholds for tax purposes.
1-43 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-44 SECTION 1. Section 23.13, Tax Code, is amended to read as
1-45 follows:
1-46 Sec. 23.13. TAXABLE LEASEHOLDS. (a) A taxable leasehold
1-47 or other possessory interest in real property that is exempt from
1-48 taxation to the owner of the estate or interest encumbered by the
1-49 possessory interest is appraised at the market value of the
1-50 leasehold or other possessory interest. Subject to the limitation
1-51 provided by Subsection (b), when appraising the leasehold or other
1-52 possessory interest in real property, the appraiser shall use the
1-53 equity method of valuation as follows:
1-54 (1) determine the market lease rate for comparable
1-55 properties with comparable restrictions;
1-56 (2) determine the actual lease rate for the property
1-57 being appraised;
1-58 (3) subtract the actual lease rate from the market
1-59 lease rate; and
1-60 (4) divide the remainder by a market capitalization
1-61 rate for property of comparable risk to determine the leasehold
1-62 value.
1-63 (b) The [However, the] appraised value may not be less than
1-64 the total rental paid for the interest for the current tax year.
2-1 SECTION 2. This Act takes effect September 1, 1997.
2-2 SECTION 3. The importance of this legislation and the
2-3 crowded condition of the calendars in both houses create an
2-4 emergency and an imperative public necessity that the
2-5 constitutional rule requiring bills to be read on three several
2-6 days in each house be suspended, and this rule is hereby suspended.
2-7 * * * * *