## , T OF TEXAS AUSTIN. T~~XAS 78711

Honorable Joe Resweber Harris County Attorney Harris County Courthouse Houston, Texas 77002 Opinion No. H- 570 Re: Tax status of real property subject to condemnation where, after condemnor takes possession, taking is reversed as arbitrary. Dear Mr. Resweber:

You have requested our opinion regarding the interim tax status of condemned property as towhich, after the condemnor has taken possession, the taking is declared invalid.

Article 7151, V.T. C.S., provides, in pertinent part:

...any. ..body politic having the power of condemnation shall take over the possession of property under authority of any law authorizing it to condemn said property, or under an option to buy said property from the owner, or under an agreement b,yth,eowner to sell said property, or shall comply with the laws relating to condemnation to such an extent as to entitle it to the possession of said property, or to constitute ataking thereof from the owner or person inwhose name title rests, then such condemni.ng authority shall be considered the owner of said property for the purposes of all taxation from the date oftaking possession thereof, or from the date of its complying with the condemnation laws to the extent that it is entitled to possession ofsaid property, or from the date it has complied with the condemnation laws to the extent that there has been ataking of said property from the owner, whichever occurs first. Inthe present Instance, the Cit,y of Houston condemned atract ofland and took possession thereof on March 19, 1969, after~ depositing the amount of the Commissioners’ award into the registry of the County Court, pursuant to article 3268, V. T. C.S. On trial ofthe matter, ajury found that the taking, was

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arbitrary and capricious, and the original owner was restored to possession in February, 1974. See City of Houston v. Hamons, 496 S.W. 2d 662 (Tex. Civ. App. -- Houston73, writ ref ’d ‘n.r. e.). Presently at issue is the tax status of the property during the period d its possession by the City of Houston.Should it be determined that the individual retained ownership ofthe property for tax purposes duxing,this interim period, he would be liable for all taxes accruing therein, for any other result would have the effect of granting tax-exempt status to otherwise non-exempt private property., In order to qualify for the “public property” exemption of article 11, section 9 ofthe Texas Constitution,

[i]t iii essentidl.:.
.that the’.property be us.ed for public purposes but that in itself is not enough. The property must;’ wholly apart from its use, be ‘public property. ’ In our opinion this means public ownership, and the Texas courts have never held to the contrary. We accordingly now hold that the clause in question authorizes the Legislature to exempt only nubliclv owned property used for public purposes. Leander Independent Sdhool District v. Cedar Park Water Supply Corp., 479 S.W. 2d908 (Tex. Sup. 1972~). The proviso of article 7151is framed in the disjunctive: the condemning authority ~must either “take over the possession ofproperty under authority of any law authorizing it to’condemn said property. ..or.. . comply with the laws rel~ating to condemnation.
..” (Emphasis ;i-aaed). Although the taking inthis case was subsequently reversed because the City failed to comply with. the laws relating to condemnation, the City nevertheless originally took possession ofthe land “under authority of ” article 3260, which specifically permits possession pending litigation. Furthermore, the City did !‘comply with the laws relating to condemnation” to the degree that it was able to secure posse~ss,ion during the interim period. We are therefore ofthe opinion t&hatthe City of Houston complied with the proviso of article 7151to the extent that, between~March 19, 1969, +-id that date in February 1974, onwhich the individual ,resumed possession, the City must be “considered the owner of said property for purposes of all taxation. ”

We believe that such ownership for tax purposes sufficiently complies with the standard promulgated in Leander, supra, which restricts tax-exempt status to “publicly owned property used form purposes. ‘I During the interim period, the former owner derived no more benefit from, and held no

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p. 2553,

, The Honorable Joe Resweber ‘-Page 3 (H-570)

more legal right to t:heproperty th,anhewould have enjoyed had thejury subsequentl,y val.idated the condemnation. Accordingl.y, we hold that, during this period, the t:ax status of t.herea,it:y Inquestion was that of tax-exempt, city owned propert:y. SUMMARY -= Where a grvernmental unit L&es possession of real property pursuant: to t:hecon,demnation laws, and the taking ,issubsequeni:Ey reversed, t:hetax status of the real,ty during the interim period is t,hatof tax,-exempt property owned ‘bythe condemning governmental unit. Very truly yours,

APPROVED:

_- C. ROBERT HEATH, C-mm Attmrney General ofTexas

Opi,nion Commit:t.ee

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