HBA-MPA H.B. 2100 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2100 By: Luna, Vilma Transportation 4/4/1999 Introduced BACKGROUND AND PURPOSE Currently, navigation districts, as political subdivisions of the state, are generally exempt from the payment of ad valorem taxes on their property "used for public purposes." Navigation districts, in developing their ports and waterways, must often plan and carry out projects that are substantial in scope and cost and require long periods of time for acquisition of property to be used in the planning and construction of the project. In order to develop such projects, a navigation district may purchase property which will not be placed into use for several years. During the interim period, the navigation district may rent or lease the property for transitional uses such as the deposit of material dredged from its waterways, farming, or grazing. Several navigation districts have taken the position that such transitory use does not make such property taxable, because it is being used for public purposes. Appraisal districts having jurisdiction over the property of navigation districts, however, are not uniformly following the exemption from taxation of such property, resulting in some appraisal districts attempting to tax the property because of the transitional use by the navigation district. This lack of uniformity can be disruptive to the orderly purchase of property for future use, and to the planning and development of port facilities by navigation districts in this state. H.B. 2100 permits navigation districts to acquire property to be held for future use by the district as an aid or facility incidental to or useful in the operation or development of a port or waterway or in aid of navigation-related commerce; and permits navigation districts to rent or lease such property to a private enterprise for compensation during the time the property is held for future use or development by the district while maintaining the exemption of such property from taxation. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 60.101, Water Code, by adding Subsection (b), to authorize a navigation district to acquire property to be held for future use as an aid or facility incidental to or useful in the operation or development of a port or waterway or in the aid of navigation-related commerce. Authorizes property owned and held by a district for future use to be rented or leased for compensation to a private enterprise for its use for a purpose not related to the duties and functions of the district. Redesignates existing Subsection (b) to (c). SECTION 2. Amends Section 11.11, Tax Code, to provide that real property owned and held by a navigation district for future use for purposes related to the duties and functions of the district and rented or leased for compensation to a private person for a use not related to the duties and functions of the district is considered used for public purposes and exempt from taxation. Provides that a leasehold or other possessory interest in the real property owned by the district held by the private person for compensation is subject to Sections 23.13 (Taxable Leaseholds) and 25.07 (Leasehold and Other Possessory Interests in Exempt Property), Tax Code. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.