2023 Texas Statutes › Tax Code › Title 1 - Property Tax Code › Subtitle D - Appraisal and Assessment › Chapter 25 - Local Appraisal › Section 25.07. Leasehold and Other Possessory Interests in Exempt Property

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 Sections 11.11(b) and (c), 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 a municipality or county 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 Subchapter C, Chapter 681, Business & Commerce Code;
(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, that 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 (Subtitle C1, Title 12, Local Government Code), by the same municipality that owns the airport;
(4)  the interest is in a part of:
(A)  a park, market, fairground, or similar public facility that is owned by a municipality; or
(B)  a convention center, visitor center, sports facility with permanent seating, concert hall, arena, or stadium that is owned by a municipality 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:
(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; or
(7)  the property is part of a rail facility owned by a rural rail transportation district operating under Chapter 172, Transportation Code.
(c)  Subsection (a) does not apply to:
(1)  any portion of a facility owned by the Texas Department of Transportation that 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 or 223, 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 a rail facility or system or is a highway in the state highway system.
(d)  For purposes of Subsection (b)(6)(B) of this section, property is 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 if the property:
(1)  is leased to a person:
(A)  engaged in the business of navigation-related commerce; or
(B)  for a purpose described by Section 60.101, 61.162, or 63.153, Water Code, or for the placement on the property of an improvement described by those sections;
(2)  is located:
(A)  adjacent to a federal navigation project; or
(B)  in a foreign trade zone established and operated under federal law; or
(3)  includes part of a rail facility that serves the tenants and users of the port or waterway.
(e)  In this section, "navigation-related commerce" includes the following if engaged in by a person:
(1)  an activity that requires the person to hold a maritime-related license or permit issued by a navigation district, including providing stevedoring, steamship agency, towing, tugboat, or line handling services;
(2)  an activity that requires the person to hold a franchise issued by a navigation district;
(3)  possessing a leasehold interest in property owned by a navigation district that connects infrastructure to a public dock;
(4)  hauling cargo into or across a public dock;
(5)  commercial fishing;
(6)  constructing, fabricating, cleaning, repairing, dismantling, or recycling vessels;
(7)  pilotage; or
(8)  an activity described by Section 60.101, 61.162, or 63.153, Water Code.
Acts 1979, 66th Leg., p. 2270, ch. 841, Sec. 1, eff. Jan. 1, 1982.  Amended by Acts 1981, 67th Leg., p. 2615, ch. 700, Sec. 1, eff. Jan. 1, 1982;  Acts 1981, 67th Leg., 1st C.S., p. 157, ch. 13, Sec. 99, eff. Jan. 1, 1982;  Acts 1989, 71st Leg., ch. 534, Sec. 7, eff. Aug. 28, 1989;  Acts 1991, 72nd Leg., ch. 582, Sec. 18, eff. Sept. 1, 1991;  Acts 1991, 72nd Leg., ch. 763, Sec. 2, eff. Jan. 1, 1992;  Acts 1997, 75th Leg., ch. 829, Sec. 1, eff. Jan. 1, 1998;  Acts 2001, 77th Leg., ch. 1127, Sec. 1, eff. Aug. 27, 2001.
Amended by:
Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.97, eff. June 14, 2005.
Acts 2007, 80th Leg., R.S., Ch. 609 (H.B. 387), Sec. 7, eff. June 15, 2007.
Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.36, eff. April 1, 2009.
Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 3.70, eff. April 1, 2009.
Acts 2007, 80th Leg., R.S., Ch. 1169 (H.B. 316), Sec. 1, eff. January 1, 2008.
Acts 2009, 81st Leg., R.S., Ch. 85 (S.B. 1540), Sec. 4.11, eff. April 1, 2011.
Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 22.004, eff. September 1, 2009.
Acts 2011, 82nd Leg., R.S., Ch. 259 (H.B. 1201), Sec. 3, eff. June 17, 2011.
Acts 2021, 87th Leg., R.S., Ch. 878 (S.B. 1315), Sec. 1, eff. September 1, 2021.