R-2002-35 - Laserfiche WebLink

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REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: October 14 20 Appropriation Requested By: Source of Funds: Nt A Department: Fill:illl~e Account Number: NtA Report: Resolution: XX Ordinance: Amount Budgeted: Nt A Exhibits: Resolution Amount Requested: N/~ Exhibits: Budgeted Item: YES NO Exhibits: SUMMARY & RECOMMENDATION The Texas Tax Code S23.012 provides procedures for the Chief Appraiser to use when applying the "income approach" in valuing property for ad valorem tax purposes. In several recent refinery valuation lawsuits, the litigants have taken the position that the Legislature has limited the applicability of the "income approach" to only properties for which a rental market exists, such as for office buildings, retail space and apartments. Based on this premise, the litigants contend that the income approach may not be used in appraising refineries and petrochemical facilities for property tax purposes. The value established under the litigants' approach is dramatically lower than under the current income approach, which results in large amounts oflost revenue to local taxing jurisdictions. In lieu taxes are one of 0 ur major revenue sources a nd staff feels it in the b est interest 0 f the City 0 f LaP orte to support legislation amending section 23.012 of the Texas Tax Code to clarify that the legislature did not intend to depart from the equality, uniformity, and generally accepted appraisal techniques when originally adopting this statue. The City Council can request that the Texas Municipal League (TML) recognize this issue as an issue having tremendous impact to Texas municipalities and to initiate and support such amendment of section 23.012 of Texas Tax Code. Action Required bv Council: Adopt Resolution requesting TML to initiate and support legislation concerning an amendment to Texas Tax Code 23.012 regarding the "Income Approach" to valuation of property for Ad Valorem Tax Purposes. )0/' /02 Dat~ I