Lower Colo. River Auth. v. Burnet Cent. Appraisal Dist., No. 03-15-00724-CV, 2016 Tex. App. LEXIS 5982 (Tex. App.—Austin June 7, 2016, no pet. h.)
The Lower Colorado River Authority (the “LCRA”) is a governmental entity organized for the control and preservation of the waters of the Colorado River and the development of parks on land owned by the LCRA. The LCRA owns the Sunset Point RV Park (the “RV Park”) on Lake LBJ, which it leases to a private for-profit company who manages the RV Park. The lease provides that the RV Park is to be used for the development and operation of a public recreation facility and park. In 2014, the Burnet Central Appraisal District declared the RV Park to be subject to taxation. The LCRA protested, claiming that the RV Park is tax exempt under the state constitution and Texas Property Tax Code § 11.11(a) because the LCRA is a governmental entity and the RV Park is utilized for exclusively public purposes. The appraisal review board denied the protest, and the LCRA filed suit. The trial court granted summary judgment on behalf of the appraisal district, and the LCRA appealed.
On appeal, the parties did not dispute that the RV Park’s amenities are consistent with the LCRA’s public purpose of providing recreational opportunities to visitors. Indeed, the appraisal district admitted that if the RV Park was operated by the LCRA instead of the private company, the RV Park would be exempt from taxation. As such, the court of appeals defined the issue to be whether the lease of the RV Park to a private company forfeited the RV Park’s exemption. Because the lease limited the private company’s use of the RV Park to public purposes, the court of appeals held that the RV Park was still exempt from taxation. The court of appeals differentiated City of San Antonio ex rel. City Pub. Servs. Bd. of San Antonio v. Bastrop Cent. Appraisal Dist., No. 03-06-00081-CV, 2006 Tex. App. LEXIS 9051 (Tex. App.—Austin Oct. 19, 2006, pet. denied) because there the lease allowed the private company to utilize the property solely for its own commercial purposes. Having concluded that use of the RV Park in the instant case was still limited to public purposes, the court of appeals reversed the trial court’s judgment.