BILL ANALYSIS

Senate Research Center	C.S.S.B. 2526
88R27544 DRS-F	By: Campbell
	Local Government
	5/10/2023
	Committee Report (Substituted)

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 counties
• Aligns application of Tax Code provisions
• Improves the law for landfills that essentially operate for a public purpose

(Original Author's/Sponsor's Statement of Intent)

C.S.S.B. 2526 amends current law relating to the appraisal for ad valorem tax purposes of real property used as a municipal solid waste facility or the buffer zone of such a facility.

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 Subchapter B, Chapter 23, Tax Code, by adding Section 23.27, as follows:

Sec. 23.27. MUNICIPAL SOLID WASTE FACILITY PROPERTY. (a) Defines "buffer zone" and "municipal solid waste facility."

(b) Requires the chief appraiser to use the market data comparison method of appraisal to determine the market value of real property that is being used as a municipal solid waste facility or the buffer zone of such a facility or that is surrounded by the buffer zone of a municipal solid waste facility.

(c) Requires the chief appraiser, in determining the market value of property described by Subsection (b), to take into account the dollar amount of the most recent closure cost estimate for the municipal solid waste facility prepared by the owner or operator of the facility pursuant to rules adopted and procedures developed by the Texas Commission on Environmental Quality.

(d) Authorizes the chief appraiser, for purposes of this section, to require a property owner to submit to the chief appraiser a copy of the most recent closure cost estimate for the municipal solid waste facility for which the property is being used.

SECTION 2. Makes application of this Act prospective.

SECTION 3. Effective date: January 1, 2024.