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

Chapter 25. Local Appraisal

Sec. 25.01. Preparation of Appraisal Records.
Sec. 25.011. Special Appraisal Records.
Sec. 25.02. Form and Content.
Sec. 25.026. Confidentiality of Violence Shelter Center and Sexual Assault Program Address
Sec. 25.025. Confidentiality of Certain Home Address Information. Information.
Sec. 25.027. Information Regarding Certain Residential Property.
Sec. 25.03. Description.
Sec. 25.04. Separate Estates or Interests.
Sec. 25.05. Life Estates.
Sec. 25.06. Property Encumbered by Possessory or Security Interest.
Sec. 25.07. Leasehold and Other Possessory Interests in Exempt Property.
Sec. 25.08. Improvements.
Sec. 25.09. Condominiums and Planned Unit Developments.
Sec. 25.10. Standing Timber.
Sec. 25.11. Undivided Interests.
Sec. 25.12. Mineral Interest.
Sec. 25.13. Exempt Property Subject to Contract of Sale.
Sec. 25.135. Qualifying Trusts.
Sec. 25.14. Repealed.
Sec. 25.15. Repealed.
Sec. 25.16. Property Losing Exemption during Tax Year.
Sec. 25.17. Property Overlapping Taxing Unit Boundaries.
Sec. 25.18. Periodic Reappraisals.
Sec. 25.19. Notice of Appraised Value.
Sec. 25.195. Inspection by Property Owner.
Sec. 25.20. Access by Taxing Units.
Sec. 25.21. Omitted Property.
Sec. 25.22. Submission for Review and Protest.
Sec. 25.23. Supplemental Appraisal Records.
Sec. 25.24. Appraisal Roll.
Sec. 25.25. Correction of Appraisal Roll.

Sec. 25.01. Preparation of Appraisal Records

(a) By May 15 or as soon thereafter as practicable, the chief appraiser shall prepare appraisal records listing all property that is taxable in the district and stating the appraised value of each.

(b) The chief appraiser with the approval of the board of directors of the district may contract with a private appraisal firm to perform appraisal services for the district, subject to his approval. A contract for private appraisal services is void if the amount of compensation to be paid the private appraisal firm is contingent on the amount of or increase in appraised, assessed, or taxable value of property appraised by the appraisal firm.

(c) A contract for appraisal services for an appraisal district is invalid if it does not provide that copies of the appraisal, together with supporting data, must be made available to the appraisal district and such appraisals and supporting data shall be public records. "Supporting data" shall not be construed to include personal notes, correspondence, working papers, thought processes, or any other matters of a privileged or proprietary nature.

Amended by 1981 Tex. Laws (1st C.S.), p. 156, ch. 13, Sec. 96.

Cross References:
Inspection of records by property owner, see Sec. 25.195.

Notes:
A corporation that locates property omitted from the appraisal rolls may be organized, but no taxing unit may enter a contingent fee, tax ferret contract with the corporation. Op. Tex. Att'y Gen. No. JC-290 (2000).

An appraisal district has no authority to assign official addresses to rural parcels of land for the provision of 9-1-1 emergency services, despite the fact that other express statutory duties require appraisal districts' fulfillment of the addressing function. The law only allows counties to assign the addresses. Tex. Att'y Gen. LO-94-016 (1994).

Sec. 25.011. Special Appraisal Records.

(a) The chief appraiser for each appraisal district shall prepare and maintain a record of property specially appraised under Chapter 23 of this code and subject, in the future, to additional taxation for change in use or status.

(b) The record for each type of specially appraised property must be maintained in a separate document for each 12-month period beginning June 1. The document must include the name of at least one owner of the property, the acreage of the property, and other information sufficient to identify the property as required by the comptroller. All entries in each document must be kept in alphabetical order according to the last name of each owner whose name is part of the record.

Added by 1981 Tex. Laws (1st C.S.), p. 156, ch. 13, Sec. 97; amended by 1991 Tex. Laws (2nd C.S.), p. 35, ch. 6, Sec. 40.

Cross References:
Specially appraised property, see ch. 23, subchs. C to G.
Form and content of listing, see Rule Sec. 9.3012.

Sec. 25.02. Form and Content.

(a) The appraisal records shall be in the form prescribed by the comptroller and shall include:

(1) the name and address of the owner or, if the name or address is unknown, a statement that it is unknown;

(2) real property;

(3) separately taxable estates or interests in real property, including taxable possessory interests in exempt real property;

(4) personal property;

(5) the appraised value of land and, if the land is appraised as provided by Subchapter C, D, E, or H, Chapter 23, the market value of the land;

(6) the appraised value of improvements to land;

(7) the appraised value of a separately taxable estate or interest in land;

(8) the appraised value of personal property;

(9) the kind of any partial exemption the owner is entitled to receive, whether the exemption applies to appraised or assessed value, and, in the case of an exemption authorized by Section 11.23, the amount of the exemption;

(10) the tax year to which the appraisal applies; and

(11) an identification of each taxing unit in which the property is taxable.

(b) A mistake in the name or address of an owner does not affect the validity of the appraisal records, of any appraisal or tax roll based on them, or of the tax imposed. The mistake may be corrected as provided by this code.

Amended by 1981 Tex. Laws (1st C.S.), p. 157, ch. 13, Sec. 98; amended by 1991 Tex. Laws (2nd C.S.), p. 35, ch. 6, Sec. 41; amended by 1999 Tex. Laws, p. 3195, ch. 631, Sec. 6. .

Cross References:
Real and personal property defined, see Sec. 1.04(2) & (4).
Appraised value defined, see Sec. 1.04(8).
Assessed value defined, see Sec. 1.04(9).
Partial exemption defined, see Sec. 1.04(11).
Market value defined, see Sec. 1.04(7).
Improvements defined, see Sec. 1.04(3).
Separately taxable estates, see Sec. 25.04.
Life estates, see Sec. 25.05.
Identification of taxing units, see Secs. 21.01 & 21.02.
Leaseholds in exempt property, see Sec. 25.07.
Correction of mistaken name or address, see Sec. 25.25.
Uniform tax records system, see Rule Sec. 9.3003.
Appraisal records, form and content, see Rule Sec. 9.3004.
Index to appraisal records, see Rule Sec. 9.3009.
Inspection of records, see Sec. 41.64.

Notes:
The taxpayer must follow statutory procedures for allocation of value to apply. The owner waived constitutional entitlement to interstate allocation by failing to protest before the appraisal review board. The aircraft was located in the district on January 1 of each year in question, and the taxpayer did not challenge the description of the property on the appraisal rolls. The aircraft value therefore could not be allocated for prior years. A & S Air Service, Inc. v. Denton Central Appraisal District, 99 S.W.3d 340 (Tex. App.-Ft. Worth 2003, no pet.).

Tourneau Houston, Inc. (a wholly owned subsidiary of Tourneau, Inc.) had no standing to appeal because it was not the owner, was never designated in writing to be the owner's agent, and no such designation was ever filed with the appraisal district. Tourneau Houston, Inc. v. Harris County Appraisal District, 24 S.W.3d 907 (Tex. App. - Houston [1st Dist.] 2000, no pet.).

Under Property Tax Code Section 25.25(c)(3), the appraisal review board may not look past the actual appraisal roll to determine whether an error had actually occurred as to the "form of the property" as shown on that roll. The statutory meaning of "form of the property" concerns whether the property is correctly identified as real property, personal property, an improvement to real property or some other typical physical description of that property. A review board's previous actions in reviewing the actual physical condition of a business property was therefore incorrect. It was not relevant in the past that the appraisal review board had used this methodology of review to modify items other than what information was shown on the appraisal roll. Dallas Central Appraisal District v. G.T.E. Directories Corporation, 905 S.W.2d 318 (Tex. App.-Dallas 1995, writ denied).

The abbreviations FURN FIXT EQPT together with property owner's name and address are sufficient descriptions of personal property under this section. Castillo v. State of Texas, 733 S.W.2d 530 (Tex. App.-San Antonio 1987, no writ).

A description of leased personal property that gave neither the type of property nor its location is inadequate to support a summary judgment in a tax suit. Corporate Funding, Inc. v. City of Houston, 686 S.W.2d 630 (Tex. App.-Texarkana 1984, writ ref'd n.r.e.).

Under art. 7204, V.T.C.S. (repealed, now this section), failure to state the correct name of the owner on the tax roll was an irregularity that did not affect the validity of the assessment. City of Dallas v. Dean Carlton Inc., 611 S.W.2d 445 (Tex. App.-Dallas 1980, writ ref'd n.r.e.).

Mineral production equipment must be appraised separately from the mineral leasehold interest. Land, improvements to land, and interests in land must be appraised separately, even though they are all included within the code's definition of "real property." The appraisals may be in one taxpayer account, but the account must reflect separate appraisals for each property. No authority supports a view that mineral production equipment to be indispensable to the production of oil and gas on the leasehold estate, and therefore taxable as an improvement, fixture, or appurtenance to the realty. Three factors determine whether a property is affixed as an improvement and considered real property: (1) the intention of the person making the annexation (the preeminent factor), (2) the mode and sufficiency of the annexation to the real estate, and (3) the adoption of the property to the real estate's uses or purposes. Determining if mineral production equipment is real or personal property for tax collection purposes must be made on a case-by-case basis. Op. Tex. Att'y Gen. No. DM-438 (1997).

Sec. 25.025. Confidentiality of Certain Home Address Information.

(a) This section applies only to:

(1) a peace officer as defined by Article 2.12, Code of Criminal Procedure;

(2) a county jailer as defined by Section 1701.001, Occupations Code;

(3) an employee of the Texas Department of Criminal Justice;

(4) a commissioned security officer as defined by Section 1702.002, Occupations Code; and

(5) a victim of family violence as defined by Section 71.004, Family Code, if as a result of the act of family violence against the victim, the actor is convicted of a felony or a Class A misdemeanor.

(b) Information in appraisal records under Section 25.02 is confidential and is available only for the official use of the appraisal district, this state, the comptroller, and taxing units and political subdivisions of this state if:

(1) the information identifies the home address of a named individual to whom this section applies; and

(2) the individual chooses to restrict public access to the information on the form prescribed for that purpose by the comptroller under Section 5.07.

(c) A choice made under Subsection (b) remains valid until rescinded in writing by the individual.

(d) This section does not prohibit the public disclosure of information in appraisal records that identifies property according to an address if the information does not identify an individual who has made an election under Subsection (b) in connection with the individual's address.

Added by Acts 2001, 77th Leg., ch. 119, 4, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 703, 1, eff. June 20, 2003.

Cross References:
Correction of mistaken name or address, see Sec. 25.25.
Uniform tax records system, see Rule Sec. 9.3003.
Appraisal records, form and content, see Rule Sec. 9.3004.
Index to appraisal records, see Rule Sec. 9.3009.
Inspection of records, see Sec. 41.64.

Sec. 25.026. Confidentiality of Violence Shelter Center and Sexual Assault Program Address Information.

(a) In this section:

(1) "Family violence shelter center" has the meaning assigned by Section 51.002, Human Resources Code.

(2) "Sexual assault program" has the meaning assigned by Section 420.003, Government Code.

(b) Information in appraisal records under Section 25.02 is confidential and is available only for the official use of the appraisal district, this state, the comptroller, and taxing units and political subdivisions of this state if the information identifies the address of a family violence shelter center or a sexual assault program.

Added by 2001 Tex. Laws, p. 224, ch. 119, Sec. 5.

Cross References:
Correction of mistaken name or address, see Sec. 25.25.
Uniform tax records system, see Rule Sec. 9.3003.
Appraisal records, form and content, see Rule Sec. 9.3004.
Index to appraisal records, see Rule Sec. 9.3009.
Inspection of records, see Sec. 41.64.

Sec. 25.027. Information Regarding Certain Residential Property.

(a) Information in appraisal records may not be posted on the Internet if the information is a photograph, sketch, or floor plan of an improvement to real property that is designed primarily for use as a human residence.

(b) This section does not apply to an aerial photograph that depicts five or more separately owned buildings.

Added by Acts 2005, 79th Leg., ch. 29, 1, eff. Sept. 1, 2005.

Sec. 25.03. Description.

(a) Property shall be described in the appraisal records with sufficient certainty to identify it. The description of a manufactured home shall include the correct identification or serial number of the home or the Department of Housing and Urban Development label number or the state seal number in addition to the information required in Subsection (c) of this Section. A manufactured home shall not be included in the appraisal records unless this identification and descriptive information is included.

(b) The comptroller may adopt rules establishing minimum standards for descriptions of property.

(c) Each description of a manufactured home shall include the approximate square footage, the approximate age, the general physical condition, and any characteristics which distinguish the particular manufactured home.

Amended by 1991 Tex. Laws, p. 2247, ch. 617, Sec. 10; amended by 1991 Tex. Laws (2nd C.S.), p. 35, ch. 6, Sec. 42; amended by 1993 Tex. Laws, p. 1286, ch. 274, Sec. 13.

Cross References:
Uniform tax records system, see Rule Sec. 9.3003.
Property identification system, see Rule Sec. 9.3014.
Appraisal cards, see Rule Sec. 9.3001.
Use appraisal office records in delinquent tax suit, see Sec. 33.47.

Notes:
Where the tax roll uses the same description given by the taxpayer in a rendition, courts have said the taxpayer is estopped from attacking the description. Arnold v. Crockett Independent School District, 404 S.W.2d 27 (Tex. 1966).

Tax bills must identify property with reasonable certainty. A judgment foreclosing a tax lien is void if it fails to describe a definite tract of land. The Court upheld the trial court's dismissal of claims to collect delinquent taxes on certain subdivided lots improperly described in appraisal records. Taxing units that impose the statutory penalty for the enforcement of collection may not recover additional attorney fees for bringing a lawsuit. Spring Branch Independent School District v. Siebert, 100 S.W.3d 520 (Tex. App.-Houston [1st Dist.] 2003, no pet.).

Under Property Tax Code Section 25.25(c)(3), the appraisal review board may not look past the actual appraisal roll to determine whether an error had actually occurred as to the "form of the property" as shown on that roll. The statutory meaning of "form of the property" concerns whether the property is correctly identified as real property, personal property, an improvement to real property or some other typical physical description of that property. A review board's previous actions in reviewing the actual physical condition of a business property was therefore incorrect. It was not relevant in the past that the appraisal review board had used this methodology of review to modify items other than what information was shown on the appraisal roll. Dallas Central Appraisal District v. G.T.E. Directories Corporation, 905 S.W.2d 318 (Tex. App.-Dallas 1995, writ denied).

A real property description must be sufficient to identify the property. Electra Independent School District v. W.T. Waggoner Estate, 140 Tex. 483, 168 S.W.2d 645 (Tex. 1943). However, the description need be no more particular than that required for a conveyance or a partition decree. Slaughter v. City of Dallas, 101 Tex. 315, 107 S.W.2d 48 (Tex. 1908). The written description must be adequate, either by itself or by reference to another existing writing, to identify the property with reasonable certainty. Jamison v. City of Pearland, 489 S.W.2d 636 (Tex. App.-Dallas 1972, writ ref'd n.r.e.).

Contractions and abbreviations are permissible in a property description. Stone v. City of Dallas, 244 S.W.2d 937 (Tex. App.-Dallas 1952, error dismissed); Houston Crane Rentals, Inc. v. City of Houston, 454 S.W.2d 216 (Tex. App.-Houston 1970, writ ref'd n.r.e.).

Descriptions stating an incorrect number of acres may still be valid, providing the tract itself can be identified. Barrett v. Spence, 28 Civ. App. 344, 67 S.W.2d 921 (Tex. Civ. App. 1902); Kenson v. Gage, 34 Civ. App. 547, 79 S.W.2d 605 (Tex. Civ. App. 1904).

Sec. 25.04. Separate Estates or Interests.

Except as otherwise provided by this chapter, when different persons own land and improvements in separate estates or interests, each separately owned estate or interest shall be listed separately in the name of the owner of each if the estate or interest is described in a duly executed and recorded instrument of title.

Acts 1979, 66th Leg., p. 2270, ch. 841, Sec. 1, eff. Jan. 1, 1982.

Cross References:
Records generally, see Sec. 25.02.
Separate mineral interests, see Sec. 25.12.
Standing timber interests, see Sec. 25.10.

Notes:
While real property is usually taxed as a unit, where there have been severances so that one portion of the realty belongs to one person and other portions to others, each owner should pay taxes under assessments of the portion owned, even if the interest is a mineral or fractional interest. Bashara v. Saratoga Independent School District, 139 S.W.2d 631 (Tex. 1942).

Mineral production equipment must be appraised separately from the mineral leasehold interest. Land, improvements to land, and interests in land must be appraised separately, even though they are all included within the code's definition of "real property." The appraisals may be in one taxpayer account, but the account must reflect separate appraisals for each property. No authority supports a view that mineral production equipment to be indispensable to the production of oil and gas on the leasehold estate, and therefore taxable as an improvement, fixture, or appurtenance to the realty. Three factors determine whether a property is affixed as an improvement and considered real property: (1) the intention of the person making the annexation (the preeminent factor), (2) the mode and sufficiency of the annexation to the real estate, and (3) the adoption of the property to the real estate's uses or purposes. Determining if mineral production equipment is real or personal property for tax collection purposes must be made on a case-by-case basis. Op. Tex. Att'y Gen. No. DM-438 (1997).

Sec. 25.05. Life Estates.

Real property owned by a life tenant and remainderman shall be listed in the name of the life tenant.

Acts 1979, 66th Leg., p. 2270, ch. 841, Sec. 1, eff. Jan. 1, 1982.

Cross References:
Records generally, see Sec. 25.02.

Notes:
A surviving spouse with a constitutionally guaranteed life estate interest in a homestead residence is entitled to a property tax exemption. George Copeland v. Tarrant Appraisal District, 906 S.W.2d 148 (Tex. App.-Fort Worth 1995, writ denied).

Sec. 25.06. Property Encumbered by Possessory or Security Interest.

(a) Except as provided by Section 25.07, property encumbered by a leasehold or other possessory interest or by a mortgage, deed of trust, or other interest securing payment or performance of an obligation shall be listed in the name of the owner of the property so encumbered.

(b) Except as otherwise directed in writing under Section 1.111(f), real property that is subject to an installment contract of sale shall be listed in the name of the seller if the installment contract is not filed of record in the real property records of the county.

(c) This section does not apply to:

(1) any portion of a facility owned by the Texas Department of Transportation that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system and that is licensed or leased to a private entity by that department under Chapter 91, 227, or 361, Transportation Code; or

(2) a leasehold or other possessory interest granted by the Texas Department of Transportation in a facility owned by that department that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system.

Added by Acts 1979, 66th Leg., p. 2270, ch. 841, 1, eff. Jan. 1, 1982. Amended by Acts 1995, 74th Leg., ch. 579, 9, eff. Jan. 1, 1996; Acts 1999, 76th Leg., ch. 1481, 6, eff. Jan. 1, 2000; Acts 2005, 79th Leg., ch. 281, 2.96, eff. June 14, 2005.

Cross References:
Records generally, see Sec. 25.02.
Representation of property owner, see Sec. 1.111.

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

Sec. 25.06 applies to leaseholds and all other legally recognizable interests not described in an executed and recorded conveyance. This section follows general practice in listing the property in the name of the fee owner and permitting the parties to allocate responsibility for payment of taxes by contract. A.J. Robbins Co. v. Roberts, 610 S.W.2d 854 (Tex. App.-Amarillo 1980, writ ref'd n.r.e.).

Sec. 25.07. Leasehold and Other Possessory Interests in Exempt Property.

(a) Except as provided by Subsection (b) of this section, a 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 shall be listed in the name of the owner of the possessory interest if the duration of the interest may be at least one year.

(b) Except as provided by Subsections (b) and (c) of Section 11.11 of this code, a leasehold or other possessory interest in exempt property may not be listed if:

(1) the property is permanent university fund land;

(2) the property is county public school fund agricultural land;

(3) the property is a part of a public transportation facility owned by an incorporated city or town and:

(A) is an airport passenger terminal building or a building used primarily for maintenance of aircraft or other aircraft services, for aircraft equipment storage, or for air cargo;

(B) is an airport fueling system facility;

(C) is in a foreign-trade zone:

(i) that has been granted to a joint airport board under Chapter 129, Acts of the 65th Legislature, Regular Session, 1977 (Article 1446.8, Vernon's Texas Civil Statutes);

(ii) the area of which in the portion of the zone located in the airport operated by the joint airport board does not exceed 2,500 acres; and

(iii) that is established and operating pursuant to federal law; or

(D) (i) is in a foreign trade zone established pursuant to federal law after June 1, 1991, which operates pursuant to federal law;

(ii) is contiguous to or has access via a taxiway to an airport located in two counties, one of which has a population of 500,000 or more according to the federal decennial census most recently preceding the establishment of the foreign trade zone; and

(iii) is owned, directly or through a corporation organized under the Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), by the same incorporated city or town which owns the airport;

(4) the interest is in a part of:

(A) a park, market, fairground, or similar public facility that is owned by an incorporated city or town; or

(B) a convention center, visitor center, sports facility with permanent seating, concert hall, arena, or stadium that is owned by an incorporated city or town as such leasehold or possessory interest serves a governmental, municipal, or public purpose or function when the facility is open to the public, regardless of whether a fee is charged for admission;

(5) the interest involves only the right to use the property for grazing or other agricultural purposes;

(6) the property is owned by the Texas National Research Laboratory Commission or by a corporation formed by the Texas National Research Laboratory Commission under Section 465.008(g), Government Code, and is used or is useful in connection with an eligible undertaking as defined by Section 465.021, Government Code; or

(7) the property is:

(A) owned by a municipality, a public port, or a navigation district created or operating under Section 59, Article XVI, Texas Constitution, or under a statute enacted under Section 59, Article XVI, Texas Constitution; and

(B) used 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.

(c) Subsection (a) does not apply to:

(1) any portion of a facility owned by the Texas Department of Transportation that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system and that is licensed or leased to a private entity by that department under Chapter 91, 227, or 361, Transportation Code; or

(2) a leasehold or other possessory interest granted by the Texas Department of Transportation in a facility owned by that department that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system.

Amended by 1981 Tex. Laws, p. 2615, ch. 700, Sec. 1; amended by 1981 Tex. Laws (1st. C.S.), p. 157, ch. 13, Sec. 99; amended by 1989 Tex. Laws, p. 1753, ch. 534, Sec. 7; amended by 1991 Tex. Laws, p. 2714, ch. 763, Sec. 2; amended by 1997 Tex. Laws, p. 2667, ch. 829, Sec. 1; amended by 2001 Tex. Laws, p. 2375, ch. 1127, Sec. 1. Amended by Acts 2005, 79th Leg., ch. 281, 2.97, eff. June 14, 2005.

Cross References:
Exemption for sales tax development corporation leasehold, see Art. 5190.6, V.A.C.S.
Exemptions generally, see ch. 11.
Records generally, see Sec. 25.02.
Taxable leasehold, see Sec. 23.13.

Notes:
As an exception to the general rule, a lease of property exempt in the hands of its owner is taxable. However, such leases must be valued at the price for which the lease would transfer on the open market, not at the price of the fee estate. Daugherty v. Thompson, 71 Tex. 192, 9 S.W. 99 (Tex. 1888); State v. Taylor, 72 Tex. 297, 12 S.W. 176 (Tex. 1889); Op. Tex. Att'y Gen. No. V-1399 (1952).

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).

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.).

For leases with automatic successive extensions of terms, the leases' duration may exceed a year and the leasehold interests are taxable. Panola County Appraisal Review Board v. Pepper, 936 S.W.2d 10 (Tex. App.-Texarkana 1996).

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 Cent. Appraisal Dist. v. Jagee Corp., 812 S.W.2d 49 (Tex. App.-Dallas 1991, writ denied).

The exception for leaseholds in a public transportation facility in Subsection (b)(3) was held constitutional. Irving Independent School District v. Delta Airlines, Inc., 534 S.W.2d 365 (Tex. App.-Dallas 1976, writ ref'd n.r.e.).

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. 25.08. Improvements.

(a) Except as provided by Subsections (b) through (f), an improvement may be listed in the name of the owner of the land on which the improvement is located.

(b) If a person who is not entitled to exemption owns an improvement on exempt land, the improvement shall be listed in the name of the owner of the improvement.

(c) When a person other than the owner of an improvement owns the land on which the improvement is located, the land and the improvement shall be listed separately in the name of the owner of each if either owner files with the chief appraiser before May 1 a written request for separate taxation on a form furnished for that purpose together with proof of separate ownership. After an improvement qualifies for taxation separate from land, the qualification remains effective in subsequent tax years and need not be requested again. However, the qualification ceases when ownership of the land or the improvement is transferred or either owner files a request to cancel the separate taxation.

(d) Within 30 days after an owner of land or an improvement qualifies for separate taxation or cancels a qualification, the chief appraiser shall deliver a written notice of the qualification or cancellation to the other owner.

(e) A manufactured home shall be listed together with the land on which the home is located if:

(1) the statement of ownership and location for the home issued under Section 1201.207, Occupations Code, reflects that the owner has elected to treat the home as real property; and

(2) a certified copy of the statement of ownership and location has been filed in the real property records in the county in which the home is located.

(f) A manufactured home shall be listed separately from the land on which the home is located if either of the conditions provided by Subsection (e) is not satisfied.

Acts 1979, 66th Leg., p. 2271, ch. 841, 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S., p. 158, ch. 13, 100, eff. Jan. 1, 1982; Acts 2003, 78th Leg., ch. 338, 45, eff. Jan. 1, 2004.

Cross References:
Improvement defined, see Sec. 1.04(3).
Transportable building as an improvement, see Sec. 1.04(3)(B).
Manufactured housing's statement of ownership and location, see Subchapter E, Chapter 1201, Occupations Code.
Records generally, see Sec. 25.02.

Note:
While Section 25.08 provides an administrative mechanism for separating the taxes on land and improvements when there are separate owners, the land was subject to the tax lien on the improvements because the leasehold improvement and land estates merged when the property owner terminated the lease and assumed ownership of the improvements. Franz v. Katy Independent School District, 35 S.W.3d 749 (Tex. App. - Houston [1st Dist.] 2000, no pet.).

Texas law allows for separate ownership of land and improvements, and a lease agreement may show that a non-exempt owner is subject to taxation. Property continues to be owned by the lessee until the title transfers to an exempt organization under the lease terms. Bexar Appraisal District and Bexar Appraisal Review Board v. Dee Howard Company, No. 04-96-00085-CV (Tex. App.-San Antonio 1997).

Sec. 25.09. Condominiums and Planned Unit Developments.

(a) A separately owned apartment or unit in a condominium as defined in the Condominium Act shall be listed in the name of the owner of each particular apartment or unit. The value of each apartment or unit shall include the value of its fractional share in the common elements of the condominium.

(b) Property owned by a planned unit development association may be listed and taxes imposed proportionately against each member of the association if the association files with the chief appraiser before May 1 a resolution adopted by vote of a majority of all members of the association authorizing the proportionate imposition of taxes. A resolution adopted as provided by this subsection remains effective in subsequent tax years unless it is revoked by a similar resolution.

(c) If property is listed and taxes imposed proportionately as authorized by Subsection (b) of this section, the amount of tax to be imposed on the association's property shall be divided by the number of parcels of real property in the development. The quotient is the proportionate amount of tax to be imposed on each parcel, and a tax lien attaches to each parcel to secure payment of its proportionate share of the tax on the association's property.

(d) For purposes of this section, "planned unit development association" means an association that owns and maintains property in a real property development project for the benefit of its members, who are owners of individual parcels of real property in the development and are members of the association because of that ownership.

Amended by 1981 Tex. Laws (1st C.S.), p. 158, ch. 13, Sec. 101.

Cross References:
Records generally, see Sec. 25.02.
Appraisal of property owned by nonprofit homeowners' association, see Sec. 23.18.
Cooperative housing corporation, see Sec. 23.19.
Condominium Act, see Property Code, Title 7, Chapter 81.

Sec. 25.10. Standing Timber.

(a) Except as provided by Subsections (b) and (c) of this section, standing timber may be listed together with the land on which it is located in the name of the owner of the land.

(b) If a person who is not entitled to exemption owns standing timber on exempt land, the timber shall be listed separately in the name of the owner of the timber.

(c) When a person other than the owner of standing timber owns the land on which the timber is located, the land and the timber shall be listed separately in the name of the owner of each if either owner files with the chief appraiser before May 1 a written request for separate taxation on a form furnished for that purpose together with proof of separate ownership. A qualification for separate taxation of timber expires at the end of the tax year.

(d) Within 30 days after an owner of land or timber qualifies for separate taxation, the chief appraiser shall deliver a written notice of the qualification to the other owner.

Amended by 1981 Tex. Laws (1st C.S.), p. 158, ch. 13, Sec. 102.

Cross References:
Appraisal of timber land, see Sec. 23.73.
Records generally, see Sec. 25.02.
Model form, see Rule Sec. 9.3042.

Notes:
Timber growing on county lands is taxable once it has been sold; the same is true of timber growing on state lands. Montgomery v. Peach River Lumber Co., 117 S.W. 1063 (Tex. Civ. App. 1909).

Sec. 25.11. Undivided Interests.

(a) Except as provided by Section 25.12 of this code and by Subsection (b) of this section, a property owned in undivided interests may be listed jointly in the name of all owners of undivided interests in the property or in the name of any one or more owners.

(b) An undivided interest in a property shall be listed separately from other undivided interests in the property in the name of its owner if the interest is described in a duly executed and recorded instrument of title and the owner files with the appraisal office before May 1 a written request for separate taxation on a form furnished for that purpose together with proof of ownership and of the proportion his interest bears to the whole. After an undivided interest qualifies for separate taxation, the qualification remains effective in subsequent tax years and need not be requested again. However, the qualification ceases when ownership is transferred or when any owner files a request to cancel separate taxation.

(c) Within 30 days after an owner qualifies for separate taxation or cancels a qualification, the chief appraiser shall deliver a written notice of the qualification or cancellation to the other owners.

Amended by 1981 Tex. Laws (1st C.S.), p. 158, ch. 13, Sec. 103.

Cross References:
Partial ownership of exempt property, see Sec. 11.41.
Community owners of residence homestead, see Sec. 11.13.
Model form, see Rule Sec. 9.3042.

Notes:
The undivided interests held as tenants in common by the four participants in the South Texas Nuclear Project had to be separately assessed. State v. Houston Lighting and Power Co., 609 S.W.2d 263 (Tex. App.-Corpus Christi 1980, writ ref'd n.r.e.).

The mistaken listing of property in the name of only one of several joint owners did not invalidate the assessment. Starnes v. Bledsoe Independent School Dist., 257 S.W.2d 836 (Tex. App.-Amarillo 1953, writ ref'd n.r.e.).

Sec. 25.12. Mineral Interest.

(a) Except as provided by Subsection (b) of this section, each separate interest in minerals in place shall be listed separately from other interests in the minerals in place in the name of the owner of the interest.

(b) Separate interests in minerals in place, other than interests having a taxable value of less than $500, shall be listed jointly in the name of the operator designated with the railroad commission or the name of all owners or any combination of owners if the designated operator files with the appraisal office before May 1 a written request for joint taxation on a form furnished for that purpose. A qualification pursuant to this subsection for joint taxation remains effective in subsequent tax years and need not be requested again. However, the qualification ceases when the designated operator files a request to cancel joint taxation.

Text of subsection (c) added by Acts 1989, 71st Leg., ch 796, 22.

(c) If a written request for joint taxation has been filed under Subsection (b), the notice of appraised value provided for by Section 25.19 for the owners included in the request for joint taxation shall be delivered to the operator, owner, or owners of the mineral interest in whose name the mineral interest is designated for joint taxation. The chief appraiser is not required to deliver a separate notice of appraised value to each owner included in the request for joint taxation. However, the chief appraiser shall deliver a separate notice of appraised value to an owner of an interest in the property who before May 1 files a written request to receive a separate notice of appraised value with the chief appraiser on a form provided by the appraisal district for that purpose. The request is effective for each subsequent year until revoked by the owner or until the owner no longer owns an interest in the property.

Text of subsection (c) added by Acts 1989, 71st Leg., ch 450, 1.

(c) If a written request for joint taxation has been filed under Subsection (b), the notice of appraised value provided for by Section 25.19 for the owners included in the request for joint taxation shall be delivered to the operator, owner, or owners of the mineral interest in whose name the mineral interest is designated for joint taxation. The chief appraiser is not required to deliver a separate notice of appraised value to each owner included in the request for joint taxation. Provided, however, a mineral interest owner may request a separate notice of appraised value and the chief appraiser shall deliver a separate notice of appraised value to such owner.

Amended by 1981 Tex. Laws (1st C.S.), p. 159, ch. 13, Sec. 104; amended by 1989 Tex. Laws, p. 1616, ch. 450, Sec. 1 and p. 3599, ch. 796, Sec. 22; amended by 1997 Tex. Laws, p. 4939, ch. 1299, Sec. 1.

Cross References:
Separate estates or interests, see Sec. 25.04.
Expiration of tax lien on mineral property, see Sec. 32.02.
Model form, see Rule Sec. 9.3042.

Notes:
Once the fee owner has severed the mineral estate, the mineral estate and its owner become liable for taxes to the same extent that property owners are liable for any other tax. Duval County Ranch Co. v. State, 587 S.W.2d 436 (Tex. App.-San Antonio 1979, writ ref'd n.r.e.), cert. denied, 101 S.Ct. 856, 449 U.S. 1077, 66 L.Ed.2d 800 (1980).

A metes and bound description is only a two dimensional designation that does not apply to sub-surface estates. Severed mineral estates are regarded as separately owned and separately taxed in Texas. Appraisal review boards were not established to deal with questions of pure law. A taxing unit may take direct action in district court, rather than a challenge to the appraisal review board. Glasscock Underground Water Conservation District v. Pruitt, 915 S.W.2d 577 (Tex. App.-El Paso 1996).

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. 25.13. Exempt Property Subject to Contract of Sale.

Property that is exempt from taxation to the titleholder but is subject on January 1 to a contract of sale to a person not entitled to exemption shall be listed in the name of the purchaser.

Acts 1979, 66th Leg., p. 2273, ch. 841, Sec. 1, eff. Jan. 1, 1982.

Cross References:
Exempt property subject to lease, see Sec. 25.07.
Listing separate interests in same property, see Sec. 25.04.

Sec. 25.135. Qualifying Trusts.

The interest of a qualifying trust as defined by Section 11.13(j) in a residence homestead shall be listed in the name of the trustor of the trust.

Added by 1993 Tex. Laws, p. 3365, ch. 854, Sec. 3.

Cross References:
Residence homestead exemptions, see Sec. 11.13.

Sec. 25.14. Repealed in 1984.

Sec. 25.15. Repealed in 1984.

Sec. 25.16. Property Losing Exemption During Tax Year.

(a) If an exemption applicable to a property on January 1 terminates during the tax year, the property shall be listed in the name of the person who owns or acquires the property on the date applicability of the exemption terminates.

(b) The chief appraiser shall make an entry on the appraisal records showing that taxes on the property are to be calculated as provided by Section 26.10 of this code and showing the date on which exemption terminated.

Amended by 1981 Tex. Laws (1st C.S.), p. 159, ch. 13, Sec. 105.

Cross References:
Exemptions generally, see ch. 11.
Proration of taxes, see Sec. 26.10.

Notes:
An exempt organization must narrowly define the recipients of the organization's dissolved assets to insure that they fit within the Property Tax Code's delineated list of exempt entities. Failure to do so allowed the appraisal district to deny exempt status to the organization, thereby allowing the organization's land to be taxed. Since there is no federal law preemption of this Code requirement, the appraisal district could legally deny the exemption. Mission Palms Retirement Housing, Inc. v. Hidalgo County Appraisal District, 896 S.W.2d 819 (Tex. App.-Corpus Christi 1995, no writ).

Sec. 25.17. Property Overlapping Taxing Unit Boundaries.

If real property is located partially outside and partially inside a taxing unit's boundaries, the portion inside the unit's boundaries shall be listed separately from the remaining portion.

Acts 1979, 66th Leg., p. 2273, ch. 841, Sec. 1, eff. Jan. 1, 1982.

Cross References:
Situs of real property, see Sec. 21.01.

Notes:
The taxpayer proved the county could not determine the location of its boundary line, which crossed some part of his property; the burden was on the taxing entities to show the property was in their boundaries. Oake v. Collin County, 692 S.W.2d 454 (Tex. 1985).

Sec. 25.18. Periodic Reappraisals.

(a) Each appraisal office shall implement a plan for periodic reappraisal of property approved by the board of directors under Section 6.05(i).

(b) The plan shall provide for the following reappraisal activities all real and personal property in the district at least once every three years:

(1) identifying properties to be appraised through physical inspection or by other reliable means of identification, including deeds or other legal documentation, aerial photographs, land-based photographs, surveys, maps, and property sketches;

(2) identifying and updating relevant characteristics of each property in the appraisal records;

(3) defining market areas in the district;

(4) identifying property characteristics that affect property value in each market area, including:

(A) the location and market area of property;

(B) physical attributes of property, such as size, age, and condition;

(C) legal and economic attributes; and

(D) easements, covenants, leases, reservations, contracts, declarations, special assessments, ordinances, or legal restrictions;

(5) developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics;

(6) applying the conclusions reflected in the model to the characteristics of the properties being appraised; and

(7) reviewing the appraisal results to determine value.

(c) A taxing unit by resolution adopted by its governing body may require the appraisal office to appraise all property within the unit or to identify and appraise newly annexed territory and new improvements in the unit as of a date specified in the resolution. On or before the deadline requested by the taxing unit, which deadline may not be less than 30 days after the date the resolution is delivered to the appraisal office, the chief appraiser shall complete the appraisal and deliver to the unit an estimate of the total appraised value of property taxable by the unit as of the date specified in such resolution. The unit must pay the appraisal district for the cost of making the appraisal. The chief appraiser shall provide sufficient personnel to make the appraisals required by this subsection on or before the deadline requested by the taxing unit. An appraisal made pursuant to this subsection may not be used by a taxing unit as the basis for the imposition of taxes.

Acts 1979, 66th Leg., p. 2273, ch. 841, 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S., p. 159, ch. 13, 106, eff. Jan. 1, 1982; Acts 1989, 71st Leg., ch. 796, 23, eff. Sept. 1, 1989; Acts 2005, 79th Leg., ch. 412, 10, eff. Sept. 1, 2005.

Cross References:
Appraisal generally, see Sec. 23.01.
Reappraisal following natural disaster, see Sec. 23.02.
Review of records by appraisal review board, see Sec. 41.01.
Constitutional provision for equality and uniformity, see art. VIII, Sec. 1, Tex. Const.