By:  Nixon                                             S.B. No. 182
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to the appraisal of certain leaseholds for tax purposes.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Section 23.13, Tax Code, is amended to read as
 1-4     follows:
 1-5           Sec. 23.13.  TAXABLE LEASEHOLDS.  (a)  A taxable leasehold or
 1-6     other possessory interest in real property that is exempt from
 1-7     taxation to the owner of the estate or interest encumbered by the
 1-8     possessory interest is appraised at the market value of the
 1-9     leasehold or other possessory interest.  Subject to the limitations
1-10     provided by Subsection (b), when appraising the leasehold or other
1-11     possessory interest in real property that is otherwise tax exempt,
1-12     the appraiser shall apply generally accepted appraisal methods and
1-13     techniques to value the leasehold advantage or "equity."
1-14           (b)  The taxable [However, the appraised] value may not be
1-15     less than the total rental paid for the interest for the current
1-16     tax year.  However, the taxable value may not be greater than 10
1-17     times the leasehold rent advantage (the positive result of market
1-18     rent minus contract rent).
1-19           SECTION 2.  This Act takes effect September 1, 1999.
1-20           SECTION 3.  The importance of this legislation and the
1-21     crowded condition of the calendars in both houses create an
1-22     emergency and an imperative public necessity that the
1-23     constitutional rule requiring bills to be read on three several
1-24     days in each house be suspended, and this rule is hereby suspended.