HBA-MPA H.B. 2100 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2100
By: Luna, Vilma
Transportation
4/4/1999
Introduced


BACKGROUND AND PURPOSE 

Currently, navigation districts, as political subdivisions of the state,
are generally exempt from the payment of ad valorem taxes on their property
"used for public purposes."  Navigation districts, in developing their
ports and waterways, must often plan and carry out projects that are
substantial in scope and cost and require long periods of time for
acquisition of property to be used in the planning and construction of the
project.  In order to develop such projects, a navigation district may
purchase property which will not be placed into use for several years.
During the interim period, the navigation district may rent or lease the
property for transitional uses such as the deposit of material dredged from
its waterways, farming, or grazing.   

Several navigation districts have taken the position that such transitory
use does not make such property taxable, because it is being used for
public purposes.  Appraisal districts having jurisdiction over the property
of navigation districts, however, are not uniformly following the exemption
from taxation of such property, resulting in some appraisal districts
attempting to tax the property because of the transitional use by the
navigation district.  This lack of uniformity can be disruptive to the
orderly purchase of property for future use, and to the planning and
development of port facilities by navigation districts in this state.  H.B.
2100 permits navigation districts to acquire property to be held for future
use by the district as an aid or facility incidental to or useful in the
operation or development of a port or waterway or in aid of
navigation-related commerce; and permits navigation districts to rent or
lease such property to a private enterprise for compensation during the
time the property is held for future use or development by the district
while maintaining the exemption of such property from taxation. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 60.101, Water Code, by adding Subsection (b), to
authorize a navigation district to acquire property to be held for future
use as an aid or facility incidental to or useful in the operation or
development of a port or waterway or in the aid of navigation-related
commerce.  Authorizes property owned and held by a district for future use
to be rented or leased for compensation to a private enterprise for its use
for a purpose not related to the duties and functions of the district.
Redesignates existing Subsection (b) to (c). 

SECTION 2.  Amends Section 11.11, Tax Code, to provide that real property
owned and held by a navigation district for future use for purposes related
to the duties and functions of the district and rented or leased for
compensation to a private person for a use not related to the duties and
functions of the district is considered used for public purposes and exempt
from taxation.  Provides that a leasehold or other possessory interest in
the real property owned by the district held by the private person for
compensation is subject to Sections 23.13 (Taxable Leaseholds) and 25.07
(Leasehold and Other Possessory Interests in Exempt Property), Tax Code. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.