Opinion No.
Background
- Texas Attorney General opines on ad valorem taxation of City of Greenville property used as Maintenance Facilities leased to L-3 for aircraft servicing.
- City holds legal title to land and improvements on two tracts at Greenville Municipal Airport; facilities not publicly accessible.
- Questions focus on public property use, tax exemption under Tex. Tax Code §11.11, and taxability of fee simple vs. leasehold interests.
- Authority discussed includes chief appraiser’s duty to determine exemptions and statutory framework for public transportation facility exemptions under §25.07.
- AG concludes facts govern tax status; cannot resolve questions as fact questions; provides general guidance that maintenance hangar used for safe operation can be a public transportation facility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Maintenance Facilities exempt as public property used for public purposes under §11.11? | L-3 use constitutes public purpose via airport support. | Tax status must be determined by facts and chief appraiser; cannot be decided here. | Cannot determine exemption; depends on use and facts. |
| If not exempt, is the fee simple taxable to the City? | Ownership and public use may confer exemption; otherwise taxable. | Taxability of fee simple follows exempt status; if exempt, leasehold may be exempt or taxable by 25.07. | Cannot determine; depends on exemption status first. |
| Does the City have equitable title for ad valorem purposes given restrictions and reversion rights? | City may hold equitable title affecting taxation. | Questions involve fact-specific title and use; AG cannot decide. | Not determinable in opinion; fact issue. |
| If City has title, is the Maintenance Facilities public property used for public purposes? | Facilities designed for maintenance of aircraft serve public airport operations. | Fact-intensive public purpose inquiry necessary. | Not determined; fact-dependent. |
| Do the facilities meet §25.07(b)(3) leasehold exemption tests, i.e., part of a public transportation facility and used for aircraft maintenance/services? | Maintenance hangar could qualify if part of public transportation facility and used for maintenance. | §25.07 is narrow; relies on building being used for specified aircraft purposes; needs factual showing. | Maintenance hangar could constitute a public transportation facility under §25.07(b)(3) in appropriate facts. |
Key Cases Cited
- Gables Realty Ltd P'ship v. Travis Cent.Appraisal Dist., 81 S.W.3d 869 (Tex. App.-Austin 2002) (leasehold exemption contingent on exempt property use; must determine exemption first)
- Tex. Dept. of Transportation v. Dallas Cnty. Tax Assessor, 211 S.W.2d 400 (Tex. 1954) (general rule on tax exemption determination standard)
- St. Joseph Orthodox-Christian Church v. Spring Branch Indep. Sch. Dist., 110 S.W.3d 477 (Tex. App.-Houston [14th Dist.] 2003) (recognizing chief appraiser determines exemption rights)
- City of Beaumont v. Fertitta, 415 S.W.2d 902 (Tex. 1967) (public purpose use of property central to tax exemption analysis)
- Irving Indep. Sch. Dist. v. Delta Airlines, Inc., 534 S.W.2d 365 (Tex. Civ. App.-Texarkana 1976) (airport facilities supporting passenger service can be public transportation related)