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Title 1. Property Tax Code
Subtitle D. Appraisal and Assessment

Chapter 23. Appraisal Methods and Procedures

Subchapter B. Special Appraisal Provisions

Sec. 23.11. Governmental Action that Constitutes Taking.
Sec. 23.12. Inventory.
Sec. 23.121. Dealer's Motor Vehicle Inventory; Value.
Sec. 23.122. Prepayment of Taxes by Certain Taxpayers.
Sec. 23.123. Declarations and Statements Confidential.
Sec. 23.124 Dealer's Vessel and Outboard Motor Inventory; Value.
Sec. 23.1241. Dealer's Heavy Equipment Inventory; Value.
Sec. 23.1242. Prepayment of Taxes by Heavy Equipment Dealers.
Sec. 23.125. Prepayment of Taxes by Certain Taxpayers.
Sec. 23.126. Declarations and Statements Confidential.
Sec. 23.127. Retail Manufactured Housing Inventory; Value.
Sec. 23.128. Prepayment of Taxes by Manufactured Housing Retailers.
Sec. 23.13. Taxable Leaseholds.
Sec. 23.14. Appraisal of Property Subject to Environmental Response Requirement.
Sec. 23.15. Intangibles of an Insurance Company.
Sec. 23.16. Intangibles of a Savings and Loan Association.
Sec. 23.17. Mineral Interest Not Being Produced.
Sec. 23.175. Oil or Gas Interest.
Sec. 23.18. Property Owned by a Nonprofit Homeowners' Organization for the Benefit of Its Members.
Sec. 23.19. Property Occupied by Stockholders of Corporation Incorporated under Cooperative Association Act.
Sec. 23.20. Waiver of Special Appraisal.
Sec. 23.21. Property Used to Provide Affordable Housing.
Sec. 23.215. Appraisal of Certain Nonexempt Property Used for Low-Income or Moderate-Income Housing.
Sec. 23.22. Land Use of Which is Restricted by Governmental Entity.
Sec. 23.225. Appraisal of Land included in Habitat Preserve and Subject to Conservation Easement.
Sec. 23.23. Limitation on Appraised Value of Residence Homestead.
Sec. 23.24. Furniture, Fixtures, and Equipment.

[Sections 23.25 to 23.40 reserved for expansion]

Sec. 23.128. Prepayment of Taxes by Manufactured Housing Retailers.

(a) In this section:

(1) "Aggregate tax rate" means the combined tax rates of all appropriate taxing units authorized by law to impose property taxes on a retail manufactured housing inventory.

(2) "Appropriate taxing unit" means a taxing unit, including the county, authorized by law to impose property taxes on a retail manufactured housing inventory.

(3) "Chief appraiser," "collector," "declaration," "manufactured housing," "owner," "retail manufactured housing inventory," "retailer," "sales price," "subsequent sale," and "total annual sales" have the meanings assigned by Section 23.127.

(4) "Statement" means the retail manufactured housing inventory tax statement filed on a form adopted by the comptroller under this section.

(5) "Unit property tax factor" means a number equal to one-twelfth of the preceding year's aggregate ad valorem tax rate at the location at which a retail manufactured housing inventory is located on January 1 of the current year.

(b) Except for a unit of manufactured housing sold to a retailer or a unit of manufactured housing that is the subject of a subsequent sale, a retailer or a person who has agreed by contract to pay the retailer's current year property taxes imposed on the retailer's manufactured housing inventory shall assign a unit property tax to each unit of manufactured housing sold from a retail manufactured housing inventory. The unit property tax of each unit of manufactured housing is determined by multiplying the sales price of the unit by the unit property tax factor. On or before the 10th day of each month the retailer shall, together with the statement filed by the retailer as provided by this section, deposit with the collector an amount equal to the total of the unit property tax assigned to all units of manufactured housing sold from the retail manufactured housing inventory in the preceding month to which a unit property tax was assigned. The collector shall deposit the money to the credit of the retailer's escrow account for prepayment of property taxes as provided by this section. An escrow account required by this section is used to pay property taxes imposed on the retail manufactured housing inventory, and the retailer shall fund the escrow account as provided by this subsection.

(c) The collector shall maintain the escrow account for each retailer in the county depository. The collector is not required to maintain a separate account in the depository for each escrow account created as provided by this section but shall maintain separate records for each retailer. The collector shall retain any interest generated by the escrow account to defray the cost of administration of the prepayment procedure established by this section. Interest generated by an escrow account created as provided by this section is the sole property of the collector and may not be used by an entity other than the collector. Interest generated by an escrow account may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

(d) The retailer may not withdraw money in an escrow account created under this section.

(e) The comptroller by rule shall adopt a form entitled "Retail Manufactured Housing Inventory Tax Statement." A retailer shall complete the form with respect to each unit of manufactured housing sold. A retailer may not use another form for that purpose. The statement shall include:

(1) a description of the unit of manufactured housing sold, including any unique identification or serial number affixed to the unit by the manufacturer;

(2) the sales price of the unit of manufactured housing;

(3) any unit property tax of the unit of manufactured housing;

(4) the reason a unit property tax is not assigned if that is the case; and

(5) any other information the comptroller considers appropriate.

(f) On or before the 10th day of each month, a retailer shall file with the collector the statement covering the sale of each unit of manufactured housing sold by the retailer in the preceding month. A retailer shall file a copy of the statement with the chief appraiser and retain documentation relating to the disposition of each unit of manufactured housing sold. A chief appraiser or collector may examine documents held by a retailer as required by this subsection in the same manner, and subject to the same conditions, as in Section 23.127(g).

(g) Subsection (f) applies to a retailer regardless of whether the retailer owes retail manufactured housing inventory tax for the current year. A retailer who does not owe any retail manufactured housing inventory tax for the current year because the retailer was not in business on January 1 may not assign a unit property tax to a unit of manufactured housing sold by the retailer or remit money with the statement unless under the terms of a contract as provided by Subsection (k).

(h) An appropriate taxing unit shall, on its tax bill prepared for the owner of a retail manufactured housing inventory, separately itemize the taxes imposed on the retail manufactured housing inventory. When the tax bill is prepared for a retail manufactured housing inventory, the assessor for the taxing unit, or an entity, if any, other than the collector, that collects taxes on behalf of the taxing unit, shall provide the collector a true and correct copy of the tax bill sent to the owner, including taxes imposed on the retail manufactured housing inventory. The collector shall apply the money in the owner's escrow account to the taxes imposed and deliver a tax receipt to the owner. The collector shall apply the amount to each appropriate taxing unit in proportion to the amount of taxes imposed, and the assessor of each taxing unit shall apply the money received from the collector to the taxes owed by the owner. No penalties or interest shall be assessed against an owner for property taxes which the owner has previously paid but which are not delivered to the appropriate taxing unit before the date on which such taxes become delinquent.

(i) If the amount in the escrow account is not sufficient to pay the taxes in full, the collector shall apply the money to the taxes and deliver to the owner a tax receipt for the partial payment and a tax bill for the amount of the deficiency together with a statement that the owner must remit to the collector the balance of the total tax due; however, no penalty or interest shall be assessed against an owner for that portion of the property taxes which represents the amount of the partial payment if the amount of the deficiency is not paid before the date the deficiency is delinquent.

(j) The collector shall remit to each appropriate taxing unit the total amount collected by the collector in deficiency payments. The assessor of each taxing unit shall apply that amount to the taxes owed by the owner. Taxes that are due but not received by the collector on or before January 31 are delinquent. Not later than February 15, the collector shall distribute to each appropriate taxing unit in the manner provided by this section all money collected under this section and held in escrow by the collector under this section. This section does not impose a duty on a collector to collect delinquent taxes that the collector is not otherwise obligated by law or contract to collect.

(k) A person who acquires the business or assets of a retailer may, by contract, agree to pay the current year retail manufactured housing inventory taxes owed by the retailer. The retailer who owes the current year tax and the person who acquires the business or assets of the retailer shall jointly notify the chief appraiser and the collector of the terms of the agreement and of the fact that the purchaser has agreed to pay the current year retail manufactured housing inventory taxes owed by the selling retailer. The chief appraiser and the collector shall adjust their records accordingly. Notwithstanding Section 23.127, a person who agrees to pay current year retail manufactured housing inventory taxes as provided by this subsection is not required to file a declaration until the year following the acquisition. This subsection does not relieve the selling retailer of tax liability.

(l) A retailer who fails to file a statement as required by this section commits an offense. An offense under this subsection is a misdemeanor punishable by a fine not to exceed $100. Each day that a retailer fails to comply with this subsection is a separate violation.

(m) In addition to other penalties provided by law, a retailer who fails to file a statement as required by this section is liable for a penalty in the amount of $500 for each month or part of a month in which a statement is not filed after it is due. A tax lien attaches to the retailer's business personal property to secure payment of the penalty. The appropriate district attorney, criminal district attorney, county attorney, collector, or person designated by the collector shall collect the penalty established by this section in the name of the collector. Venue of an action brought under this subsection is in the county in which the violation occurred or in the county in which the retailer maintains the retailer's principal place of business or residence.

(n) A retailer who fails to remit unit property taxes due as required by this section shall pay a penalty of five percent of the amount due. If the amount is not paid within 10 days after the due date, the retailer shall pay an additional penalty of five percent of the amount due. Notwithstanding this section, unit property taxes paid on or before January 31 of the year following the date on which they are due are not delinquent. The collector, the collector's designated agent, or the county or district attorney shall enforce this subsection. A penalty under this subsection is in addition to any other penalty provided by law if the owner's taxes are delinquent.

(o) A fine collected under this section shall be deposited in the county depository to the credit of the general fund. A penalty collected under this section is the sole property of the collector and may not be used by an entity other than the collector or used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

(p) Section 23.123 applies to a statement filed under this section in the same manner in which that section applies to a statement filed as required by Section 23.122.

Added by 1997 Tex. Laws, p. 4250, ch. 1112, Sec. 2; amended by 1999 Tex. Laws, p. 3894, ch. 1060, Sec. 3.

Cross References:
Appraisal of dealer's manufactured housing inventory, see Sec. 23.127.
Special inventory tax bill, see Rule Sec. 9.3038.
Monthly inventory tax statement form, see Rule Sec. 9.4035.

Sec. 23.13. Taxable Leaseholds.

(a) taxable leasehold or other possessory interest in real property that is exempt from taxation to the owner of the estate or interest encumbered by the possessory interest is appraised at the market value of the leasehold or other possessory interest. However, the appraised value may not be less than the total rental paid for the interest for the current tax year.

Cross References:
Listing taxable leaseholds in appraisal records, see Sec. 25.07.

Notes:
State-owned property leased for private commercial use was not a public purpose for which an exemption applied. The lease was therefore subsumed by the fee estate and must be appraised accordingly. Land accounts in dispute would be tax exempt due to their ownership by The University of Texas and the State of Texas, but lost exempt status because of private commercial use, resulting in an appraisal at market value of the fee simple estate. Gables Realty Limited Partnership v. Travis Central Appraisal District, 81 S.W.3d 869 (Tex. App.-Austin 2002, pet. denied).

Although the appraised value of a leasehold interest may not be less than the total rent paid for the interest for the current tax year, this does not mean the market value couldn't exceed the annual rent. A leasehold's valuation is to be based on the leasehold's current market value which might be higher than the contract price given the demand for leasehold estates. All comparables of fee-simple interests should be eliminated from data used in establishing the fair market value of leaseholds, but the appraisals should not be limited to the amount of annual rent being paid on the leaseholds. Panola County Fresh Water Supply District Number One v. Panola County Appraisal District and Panola County Appraisal Review Board, 69 S.W.3d 278 (Tex. App.-Texarkana 2002, no pet.).

A leaseholder was liable for the property tax on the taxable leasehold only if the subject property was exempt. If the property was non-exempt, the property owner was liable for any taxes. Unless the leasehold involves exempt property, the leasehold is not independently taxed, but rather, it is subsumed within the value of the fee simple estate. County of Dallas Tax Collector v. Roman Catholic Diocese of Dallas, 41 S.W.3d 739 (Tex. App.-Dallas [5th Dist.] 2001, no pet.).

The proper method for appraising a leasehold interest in tax exempt property is the equity method, which determines the difference between market and contract rent and capitalizes the difference - this amount is the value of the leasehold. This method is the correct method because it is consistent with statutory construction, the principles of real property and appraisal industry standards. Tarrant Appraisal District v. American Airlines, Inc., 826 S.W.2d 767 (Tex. App.-Fort Worth 1992, writ denied).

A leasehold derives from and is part of the fee estate, so the lessor is responsible for taxes on the full value of its property. Dallas Central Appraisal Dist. v. Jagee Corp., 812 S.W.2d 49 (Tex. App.-Dallas 1991, writ denied).

The state's interest in real property comprising the Permanent School Fund is exempt from ad valorem taxation, even in the event that the property is leased to a private business enterprise. The leasehold estates in land comprising the Permanent School Fund are taxable to the lessees. If such a leasehold is terminated and taxes remain unpaid in the leasehold estate, the tax liability becomes a personal liability of the lessee who possessed the leasehold estate when the tax was imposed. The lien against the leasehold estate remains in force. Easements granted by the school and board in coastal and upland public lands that are dedicated to the Permanent School Fund are taxable pursuant to Secs. 11.11 and 23.13 of the Tax Code. Such easements must be appraised pursuant to the provisions of Sec. 25.07. Op. Tex. Att'y Gen. No. JM-1049 (1989).

Sec. 23.135. License to Occupy Dwelling Unit in Tax-Exempt Retirement Community.

(a) license to occupy a dwelling unit in a retirement community that is exempt from taxation under Section 11.18(d)(19) is not a taxable leasehold or other possessory interest in real property regardless of whether the occupant of the dwelling unit is required to pay a refundable or nonrefundable deposit or a periodic service fee under the contract granting the occupant the license to occupy the dwelling unit.

Added by Acts 2005, 79th Leg., ch. 606, 1, eff. June 17, 2005. .

Sec. 23.14. Appraisal of Property Subject to Environmental Response Requirement.

(a) In this section, "environmental response requirement" means remedial action by a property owner to correct, mitigate, or prevent a present or future air, water, or land pollution.

(b) In appraising real property that the chief appraiser knows is subject to an environmental response requirement, the present value of the estimated cost to the owner of the property of the environmental response requirement is an appropriate element that reduces market value and shall be taken into consideration by the chief appraiser in determining the market value of the property.

Added by 1993 Tex. Laws, p. 1703, ch. 403, Sec. 1.

Cross References:
Appraisals generally, see Sec. 23.01.
Pollution control exemption, see Sec. 11.31.

Sec. 23.15. Intangibles on An Insurance Company.

Intangible property owned by an insurance company incorporated under the laws of this state is appraised as provided by Article 4.01, Insurance Code.

Acts 1979, 66th Leg., p. 2253, ch. 841, Sec. 1, eff. Jan. 1, 1982.

Cross References:
Jurisdiction to tax, see Sec. 11.02(b).
Types of insurance companies, see art. 4.01, Insurance Code.

Sec. 23.16. Intangibles of a Savings and Loan Association.

Intangible property owned by a savings and loan association is appraised as provided by Section 89.003, Finance Code.

Amended by 1999 Tex. Laws, p. 303, ch. 62, Sec. 7.90.

Cross References:
Jurisdiction to tax, see Sec. 11.02(b).
Types of savings and loan associations, see Sec. 11.09, Texas Savings and Loan Act.

Sec. 23.17. Mineral Interest Not Being Produced.

An interest in a mineral that may be removed by surface mining or quarrying from a deposit and that is not being produced is appraised at the price for which the interest would sell while the mineral is in place and not being produced. The appraised value is determined by applying a per acre value to the number of acres covered by the interest. The aggregate of the appraised value of the interest and the appraised value of all other interests that if not under separate ownership would constitute a fee simple estate in real property may not exceed the appraised value that would be placed on the fee estate if the interest in minerals were not owned separately.

Cross References:
Listing mineral interests in appraisal records, see Sec. 25.12.
Restrictions on mineral interest tax lien, see Sec. 32.02.

Notes:
Limestone is not a mineral as the term is used in the Tax Code, but land containing limestone rock may be considered as part of a quarry when extraction of the limestone occurs. Gifford-Hill & Company, Inc. v. Wise County Appraisal District and Wise County Appraisal Review Board, 827 S.W.2d 811 (Tex. 1991), overruling 797 S.W.2d 576 (Tex. App.-Ft. Worth 1990)

An overriding royalty is an interest in real property and not an interest in income. The interest's value is defined solely by the income received from production. The absence of net income renders the interest valueless. A royalty created merely as a mechanism by which a company may obtain a steady supply of lignite from its own reserves while paying a production company's costs has no objective value. Destec Properties Limited Partnership v. Freestone Central Appraisal District, No. 10-98-033-CV (Tex. App.-Waco 1999).

Sec. 23.175. Oil or Gas Interest.

(a) If a real property interest in oil or gas in place is appraised by a method that takes into account the future income from the sale of oil or gas to be produced from the interest, the method must use the average price of the oil or gas from the interest for the preceding year as the price at which the oil or gas produced from the interest is projected to be sold in the current year of the appraisal. The average price for the preceding year is calculated by dividing the sum of the prices for which oil and gas from the interest was selling on each day of the preceding calendar year, excluding February 29, by 365. If there was no production of oil or gas from the interest on any day during the preceding calendar year, the average price for which similar oil and gas from comparable interests was selling on that day is to be used. If market conditions warrant, the average price from the preceding year may be increased or decreased in the second and/or succeeding years of an appraisal that takes into account the future income from the sale of oil or gas to be produced from the interest. If the average price from the preceding year is increased in the second or any succeeding year of an appraisal that takes into account the future income from the sale of oil or gas from the interest, the annual percentage rate of increase may be no greater than the annual percentage rate increase projected for that year by the comptroller for revenue estimating purposes; however, in no event may the price used in the second or any succeeding year of an appraisal exceed 150 percent of the price used in the current year of the appraisal. The price used in the current year may be decreased by any amount in the second and succeeding year of an appraisal.

(b) The comptroller by rule shall develop and distribute to each appraisal office appraisal manuals that specify methods and procedures to discount future income from the sale of oil or gas from the interest to present value.

(c) Each appraisal office shall use the methods and procedures specified by the appraisal manuals developed under Subsection (b) of this section.

Added by 1993 Tex. Laws, p. 4376, ch. 998, Sec. 1.

Cross References:
Manual for Discounting Oil and Gas Income, see Rule Sec. 9.4031.

Notes:
Taxpayers need not raise all appraisal arguments to be used at trial in a protest before the appraisal review board. It is sufficient for jurisdictional purposes if values are alleged to be excessive. The plain language of the law concerning appraisal methodology for oil and gas property applied. Nothing in the jury instruction on fair market value of oil and gas property concerning exclusion of intangible personal property commented on the weight of the evidence and therefore the instruction was proper. Awards of attorney fees are mandatory under the law to the prevailing party. Zapata County Appraisal District v. Coastal Oil & Gas Corp., 90 S.W.3d 847 (Tex. App.-San Antonio 2002, pet. denied).

For mineral interests extending across the boundary between two counties, each county must separately determine the market value of a mineral interest based on the surface land located within that county's boundaries, according to generally accepted appraisal methods. If the market value of the mineral interest was uniform across the surface estate, simply determining the market value of the entire mineral interest and allocating that value according to the ratio of surface acreage located in each county may be an appropriate method of appraising the market value of the mineral interest. If, on the other hand, the market value was not uniform across the surface estate, simply allocating the value of the entire mineral interest based on surface acreage was not appropriate. Op. Tex. Att'y Gen. No. JC-436 (2001).

When a gas well is located in one school district, but the royalty interests from the well appertain to land located in two school districts, the school district is entitled to levy property taxes against the royalty interest based upon the location of the real property to which the royalty interest appertains. Each school district may only tax the royalty income on royalty interests that appertain to real property located in the school district. Where there is a pooling agreement with provisions for pooling the royalties from oil or gas produced anywhere on the leased land on the basis of acreage, the pooling agreement has the effect of vesting all of the lessors with joint ownership of the royalty. In this case, the school districts may each tax half of the royalty interests. If the royalty interests owners are not joint owners, however, then each school district would tax the appraised value only on those royalty interests located in its school district boundaries. Op. Tex. Att'y Gen. No. DM-490 (1998).

Sec. 23.18. Property Owned by a Nonprofit Homeowners' Organization For The Benefit of Its Members.

(a) Because many residential subdivisions are developed on the basis of a nonprofit corporation or association maintaining nominal ownership to property, such as swimming pools, parks, meeting halls, parking lots, tennis courts, or other similar property, that is held for the use, benefit, and enjoyment of the members of the organization, that nominally owned property is to be appraised as provided by this section on the basis of a nominal value to avoid double taxation of the property that would result from taxation on the basis of market value of both the property of the organization and the residential units or lots of the members of the organization, whose property values are enhanced by the right to use the organization's property.

(b) All property owned by an organization that qualifies as a nonprofit homeowners' organization under this section is appraised at a nominal value as provided by this section if:

(1) the property is held for the use, benefit, and enjoyment of all members of the organization equally;

(2) each member of the organization owns an easement, license, or other nonrevokable right for the use and enjoyment on an equal basis of all property held by the organization, even if the right is subject to a restriction imposed by the instruments conveying the right or interest or granting the easement or subject to a rule, regulation, or bylaw imposed by the organization pursuant to authority granted by articles of incorporation, declaration of covenants, conditions and restrictions, bylaws, or articles of association of the organization; and

(3) each member's easement, license, or other nonrevokable right to the use and enjoyment of the property is appurtenant to and an integral part of the taxable real property owned by the member.

(c) The chief appraiser, in appraising property owned by a member of a qualified nonprofit homeowners' organization who is entitled to the use and enjoyment of facilities owned by the organization, shall consider the enhanced value of the property resulting from the member's right to the use and benefit of those facilities.

(d) An organization qualifies as a nonprofit homeowners' organization under this section if:

(1) it engages in residential real estate management;

(2) it is organized and operated to provide for the acquisition, construction, management, maintenance, and care of property nominally owned by the organization and held for the use, benefit, and enjoyment of its members;

(3) 60 percent or more of the gross income of the organization consists of amounts received as membership dues, fees, or assessments from owners of residences or residential lots within an area subject to the jurisdiction and assessment of the organization;

(4) 90 percent or more of the expenditures of the organization is made for the purpose of acquiring, constructing, managing, maintaining, and caring for the property nominally held by the organization;

(5) each member owns an easement, a license, or other nonrevokable right for the use and enjoyment on an equal basis of all property nominally owned by the organization even if the right is subject to a restriction imposed by the instruments conveying the right or interest or granting the easement or subject to a rule, regulation, or bylaw imposed by the organization pursuant to authority granted by articles of incorporation, declaration of covenants, conditions and restrictions, the bylaws, or articles of association of the organization;

(6) net earnings of the organization do not inure to the benefit of any member of the organization or individual, other than by acquiring, constructing, or providing management, maintenance, and care of the organization's property or by a rebate of excess membership dues, fees, or assessments; and

(7) it qualifies for taxation under Section 1301 of the Tax Reform Act of 1976, Section 528 of the Internal Revenue Code of 1954, as amended, entitled "Certain Homeowners Associations."

Added by 1981 Tex. Laws (1st C.S.), p. 138, ch. 13, Sec. 59.

Cross References:
Types of homeowners associations, see Tax Reform Act of 1976, 26 U.S.C.A. Sec. 528 (1984).

Notes:
Timber-producing acreage owned by a homeowners' association could not be appraised at nominal value even though timber could be sold without the grantor joining the deed. Waterwood Improvement Association, Inc. v. San Jacinto County Appraisal Review Board, 697 S.W.2d 834 (Tex. App.-Beaumont 1985, writ ref'd n.r.e.).

Article 7150l (repealed, now this section), which permitted assessment of certain property on a nominal basis, violated art. VIII, Sec. 1, Tex. Const. Op. Tex. Att'y Gen. No. H-1220 (1978).

Sec. 23.19. Property Occupied by Stockholders of Corporation Incorporated Under Cooperative Association Act.

(a) In this section, "cooperative housing corporation" means a corporation incorporated under the Cooperative Association Act (Article 1396-50.01, Vernon's Texas Civil Statutes) to provide dwelling places for its stockholders.

(b) If an appraisal district receives a written request for the appraisal of real property and improvements of a cooperative housing corporation according to the separate interests of the corporation's stockholders, the chief appraiser shall separately appraise the interests described by Subsection (d) if the conditions required by Subsections (e) and (f) have been met. Separate appraisal under this section is for the purposes of administration of tax exemptions, determination of applicable limitations of taxes under Section 11.26 or 11.261, and apportionment by a cooperative housing corporation of property taxes among its stockholders but is not the basis for determining value on which a tax is imposed under this title. A stockholder whose interest is separately appraised under this section may protest and appeal the appraised value in the manner provided by this title for protest and appeal of the appraised value of other property.

(c) An appraisal under this section applies to the tax year in which a request is made under this section only if the request is received by the appraisal district before March 1. After the first separate appraisal of interests of stockholders of a cooperative housing corporation under this section, separate appraisals of interests of stockholders of the corporation shall be made in subsequent years without further request. A request may not be rescinded after the first separate appraisal has been made, and a request is binding on future owners and stockholders of the corporation.

(d) The interest that is to be separately appraised under this section is the market value of the right of exclusive occupancy of each separate dwelling place that is transferable only concurrently with the transfer of stock ownership in the corporation by the person having the right of occupancy, together with the market value of the right of use of a portion of the total common area used in the residential occupancy that is equal to the percentage of the total amount of the stock issued by the corporation that is owned by the stockholder.

(e) A separate appraisal of interests under this section may not be made unless:

(1) the person making the request files a resolution of the board of directors of the corporation certifying that the stockholders of the corporation have approved the request in the manner provided by the corporate articles of incorporation or bylaws for approval of matters affecting the corporation generally; and

(2) a diagrammatic floor plan of the improvements and a survey plot map of the land showing the location of the improvements on the land have been filed with the appraisal district.

(f) The chief appraiser may require a cooperative housing corporation for which separate appraisal of interests has been requested under this section to submit or verify a list of stockholders of the corporation at least annually.

(g) A tax bill or a separate statement accompanying the tax bill to a cooperative housing corporation for which interests of stockholders are separately appraised under this section must state, in addition to the information required by Section 31.01, the appraised value and taxable value of each interest separately appraised. Each exemption claimed as provided by this title by a person entitled to the exemption shall also be deducted from the total appraised value of the property of the corporation. The total tax imposed by a school district, county, municipality, or junior college district shall be reduced by any amount that represents an increase in taxes attributable to separately appraised interests of the real property and improvements that are subject to the limitation of taxes prescribed by Section 11.26 or 11.261. The corporation shall apportion among its stockholders liability for reimbursing the corporation for property taxes according to the relative taxable values of their interests.

(h) A cooperative housing corporation remains liable for payment of all taxes, penalties, and interest imposed under this title on property owned by the corporation, and the tax lien attaches to the entirety of the property.

(i) The chief appraiser may charge a fee in an amount not to exceed $100 for the initial cost of separately appraising interests in a cooperative housing corporation.

Added by Acts 1987, 70th Leg., ch. 547, 2, eff. Jan. 1, 1988. Amended by Acts 2003, 78th Leg., ch. 396, 2, eff. Jan. 1, 2004.

Cross References:
Homestead exemptions, see Sec. 11.13.
Over-65 or disabled homeowner's school tax ceiling, see Sec. 11.26.
Optional over-65 or disabled homeowner's tax ceiling, see Sec. 11.261.
Request form for separate taxation for cooperative housing, see Rule Sec. 9.3052.
Right of property owner to protest, see Sec. 41.41.

Sec. 23.20. Waiver of Special Appraisal.

(a) An owner of inventory or real property may in writing waive the right to special appraisal provided by Section 23.12 or Subchapter C, D, E, F, or G as to one or more taxing units designated in the waiver. In a tax year in which a waiver is in effect, the property is appraised for each taxing unit to which the waiver applies at the value determined under Subchapter A of this chapter or the value determined under Section 23.12 or Subchapter C, D, E, F, or G, whichever is the greater value.

(b) A waiver of the right to special appraisal provided by Section 23.12 may be submitted at any time. A waiver of the right to special appraisal provided by Subchapter C, D, E, F, or G may be submitted with an application for appraisal under that subchapter or at any other time. A property owner who has waived special appraisal under this section as to one or more taxing units may make additional waivers under this section as to other taxing units in which the property is located.

(c) A waiver under this section is effective for 25 consecutive tax years beginning on the first tax year in which the waiver is effective without regard to whether the property is subject to appraisal under Section 23.12 or Subchapter C, D, E, F, or G. To be effective in the year in which the waiver is executed, it must be filed before May 1 of that year with the chief appraiser of the appraisal district in which the property is located, unless for good cause shown the chief appraiser extends the filing deadline for not more than 60 days. An application filed after the year's deadline takes effect in the next tax year.

(d) A waiver filed under this section is applicable to the property for the term of the waiver, runs with any land to which the waiver applies, and is binding on the owner who executed the waiver and any successor in interest. A waiver may not be revoked as to any taxing unit except on approval by official action of the governing body of the taxing unit on a finding by the governing body that the revocation of the waiver would not materially impair the contractual, bond, or other debt obligation of the taxing unit wholly or partly payable from property taxes to which the property is subject. An application for revocation must be filed with the governing body of each taxing unit to which the revocation is to apply. A waiver may not be revoked if revocation is prohibited under a rule adopted under Subsection (e). The revocation is effective in the year in which the governing body approves the revocation if the chief appraiser receives a written notice of the approval before the appraisal review board approves the appraisal records. If the notice is not received before the deadline the revocation takes effect in the next tax year.

(e) The Texas Commission on Environmental Quality, a commissioners court, and the Texas Transportation Commission each, by rule, may ensure that a waiver under this section that applies to real property is properly and timely executed, and is irrevocable by the owner of the property to which the waiver applies or by any other related person receiving or proposing to receive, directly or indirectly, the proceeds of any bonds issued by or to be issued by the taxing unit. The rules of the Texas Commission on Environmental Quality apply to waivers applicable to taxing units that are conservation and reclamation districts subject to the jurisdiction of the commission. The rules of the commissioners court apply to waivers applicable to taxing units that are road districts created by the commissioners court. The rules of the Texas Transportation Commission apply to waivers applicable to taxing units that are road utility districts subject to the jurisdiction of the commission.

(f) For computations required to be made under this title, the appraised value of the property for taxation by a taxing unit to which a waiver applies is the value at which the property is taxed under this section.

(g) A waiver of a special appraisal of property under Subchapter C, D, E, F, or G of this chapter does not constitute a change of use of the property or diversion of the property to another use for purposes of the imposition of additional taxes under any of those subchapters.

Added by Acts 1989, 71st Leg., ch. 796, 17, eff. June 15, 1989; Acts 1989, 71st Leg., ch. 1235, 1, eff. June 16, 1989. Amended by Acts 1995, 74th Leg., ch. 76, 11.281, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 165, 22(68), eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 700, 1, eff. Jan. 1, 2004.

Sec. 23.21. Property Used to Provide Affordable Housing.

(a) In appraising real property that is rented or leased to a low-income individual or family meeting income-eligibility standards established by the owner of the property under regulations or restrictions limiting to a percentage of the individual's or the family's income the amount that the individual or family may be required to pay for the rental or lease of the property, the chief appraiser shall take into account the extent to which that use and limitation reduce the market value of the property.

(b) In appraising real property that is rented or leased to a low-income individual or family meeting income-eligibility standards established by a governmental entity or under a governmental contract for affordable housing limiting the amount that the individual or family may be required to pay for the rental or lease of the property, the chief appraiser shall take into account the extent to which that use and limitation reduce the market value of the property.

Added by 1997 Tex. Laws, p. 3051, ch. 980, Sec. 53; amended by 1999 Tex. Laws, p. 358, ch. 62, Sec. 16.04.

Cross References:
Appraisals generally, see Sec. 23.01.
Market value definition, see Sec. 1.04(7).

Sec. 23.215. Appraisal of Certain Nonexempt Property Used for Low-Income or Moderate-Income Housing.

(a) This section applies only to real property owned by an organization:

(1) that on the effective date of this section was rented to a low-income or moderate-income individual or family satisfying the organization's income eligibility requirements and that continues to be used for that purpose;

(2) that was financed under the low income housing tax credit program under Subchapter DD, Chapter 2306, Government Code;

(3) that does not receive an exemption under Section 11.182 or 11.1825; and

(4) the owner of which has not entered into an agreement with any taxing unit to make payments to the taxing unit instead of taxes on the property.

(b) The chief appraiser shall appraise the property in the manner provided by Section 11.1825(q).

Acts 2003, 78th Leg., ch. 1156, 5, eff. Jan. 1, 2004.

Cross References:
Appraisals generally, see Sec. 23.01.
Exemption of community housing development organizations, see Sec. 11.182.
Exemption of organizations constructing or rehabilitating low-income housing, see Sec. 11.1825.

Sec. 23.22. Land Use of Which is Restricted by Governmental Entity.

In appraising land the use of which is subject to a restriction that is imposed by a governmental entity and to which the owner of the land has not consented, including a restriction to preserve wildlife habitat, the chief appraiser shall consider the effect of the restriction on the value of the property.

Added by 1997 Tex. Laws, p. 3908, ch. 1039, Sec. 23; amended by 1999 Tex. Laws, p. 359, ch. 62, Sec. 16.05.

Cross References:
Appraisals generally, see Sec. 23.01.
Market value definition, see Sec. 1.04(7).

Sec. 23.225. Appraisal of Land Included in Habitat Preserve and Subject to Conservation Easement.

(a) In this section, "endangered species," "federal permit," and "habitat preserve" have the meanings assigned by Section 83.011, Parks and Wildlife Code.

(b) In appraising land that is included in a habitat preserve and is subject to a conservation easement created under Chapter 183, Natural Resources Code, or other law that restricts the use of the land to protect an endangered species under a federal permit, the chief appraiser shall consider the effect of the restriction on the value of the land.

Added by Acts 2005, 79th Leg., ch. 1126, 5, eff. Sept. 1, 2005.

Notes:
Subsection(b) as added by this Act, and Section 23.51, Tax Code, as amended by this Act, apply only to the appraisal of land for a tax year that begins on or after January 1, 2006.

Sec. 23.23. Limitation on Appraised Value of Residence Homestead.

(a) The appraised value of a residence homestead for a tax year may not exceed the lesser of:

(1) the market value of the property; or

(2) the sum of:

(A) 10 percent of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised;

(B) the appraised value of the property for the last year in which the property was appraised; and

(C) the market value of all new improvements to the property.

(b) When appraising a residence homestead, the chief appraiser shall:

(1) appraise the property at its market value; and

(2) include in the appraisal records both the market value of the property and the amount computed under Subsection (a)(2).

(c) The limitation provided by Subsection (a) takes effect as to a residence homestead on January 1 of the tax year following the first tax year the owner qualifies the property for an exemption under Section 11.13. The limitation expires on January 1 of the first tax year that neither the owner of the property when the limitation took effect nor the owner's spouse or surviving spouse qualifies for an exemption under Section 11.13.

(d) This section does not apply to property appraised under Subchapter C, D, E, F, or G.

(e) In this section, "new improvement" means an improvement to a residence homestead that is made after the appraisal of the property for the preceding year and that increases the market value of the property. The term does not include ordinary maintenance of an existing structure or the grounds or another feature of the property.

(f) Notwithstanding Subsections (a) and (e) and except as provided by Subdivision (2), an improvement to property that would otherwise constitute a new improvement is not treated as a new improvement if the improvement is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by mold or water damage. For purposes of appraising the property in the tax year in which the structure would have constituted a new improvement:

(1) the last year in which the property was appraised for taxation before the casualty or damage occurred is considered to be the last year in which the property was appraised for taxation for purposes of Subsection (a)(2)(A); and

(2) the replacement structure is considered to be a new improvement only to the extent it is a significant improvement over the replaced structure as that structure existed before the casualty or damage occurred.

Added by Acts 1997, 75th Leg., ch. 1039, 47, eff. Jan. 1, 1998. Amended by Acts 2003, 78th Leg., ch. 1173, 9, eff. Jan. 1, 2004.

Cross References:
Appraisals generally, see Sec. 23.01.
Appraisal record, see Sec. 25.02.
Disaster appraisal, see Sec. 23.02.
Market value definition, see Sec. 1.04(7).
Residence homesteads, see Sec. 11.13.

Notes:
Market value is determined using generally accepted appraisal methods and techniques rather than being computed under section 23.23. Once market value is determined, it is then used to decide whether the limitation calculated under section 23.23 shall be a property's appraised value for purposes of property taxation. If the market value exceeds the maximum appraised value calculated under section 23.23, then the statutory limitation becomes the appraised value. If not, the market value is the appraised value. Dallas Cent. Appraisal Dist. v. Cunningham, 161 S.W.3d 293 (Tex. App.-Dallas 2005, no pet.).

The legislature intended the ten percent cap imposed by section 23.23 to apply to the residential homestead as a single unit, i.e. the land together with the improvement. The court reached this conclusion since the meaning of residence homestead, which consists of both the land and improvement as defined by section 11.13, was intended to be used for purposes of this statute. Bader v. Dallas Cent. Appraisal Dist., 139 S.W.3d 778, (Tex. App. -- Dallas 2004, pet den.).

An appraiser must determine whether a homestead damaged by a natural disaster has been repaired or improved before the school district may increase the school tax ceiling provided by Section 11.26(b) for qualified homeowners age 65 or older. Enhancements that increase a homestead's market value are new improvements for Section 23.23 purposes and must be included in calculating that homestead's capped appraised value. In reviewing Section 23.23 as it existed for homes repaired or reconstructed in 2001 and/or 2002, 'ordinary maintenance' does not include substantial repairs or reconstruction necessitated by an extraordinary event like a tropical storm or hurricane. Op. Tex. Att'y Gen. No. GA-0091 (2003).

Sec. 23.24. Furniture, Fixtures, and Equipment.

If real property is appraised by a method that takes into account the value of furniture, fixtures, and equipment in or on the real property, the furniture, fixtures, and equipment shall not be subject to additional appraisal or taxation as personal property.

Added by 1999 Tex. Laws, p. 2943, ch. 479, Sec. 1.

Cross References:
Appraisals generally, see Sec. 23.01.
Appraisal record, see Sec. 25.02.
Consideration of alternate appraisal methods, see Sec. 23.0101.
Market value definition, see Sec. 1.04(7).
Taxation of tangible personal property, see Sec. 11.01.

[Sections 23.25 to 23.40 reserved for expansion]