84R5842 SMH-F
By: Smith H.B. No. 2746
A BILL TO BE ENTITLED
AN ACT
relating to the treatment for ad valorem tax purposes of pollution
control property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.31, Tax Code, is amended by amending
Subsections (a), (b), (c), (d), (g), (k), and (m) and adding
Subsections (b-1), (b-2), and (b-3) to read as follows:
(a) A person is entitled to an exemption from taxation of
all [or part] of the real and personal property that the person owns
and that is used wholly or partly as a facility, device, or method
for the control of air, water, or land pollution, subject to Section
23.27. A person is not entitled to an exemption from taxation under
this section solely on the basis that the person manufactures or
produces a product or provides a service that prevents, monitors,
controls, or reduces air, water, or land pollution. Property used
for residential purposes, or for recreational, park, or scenic uses
as defined by Section 23.81, is ineligible for an exemption under
this section.
(b) In this section:
(1) "Facility [, "facility], device, or method for the
control of air, water, or land pollution" means land that is
acquired after January 1, 1994, or any structure, building,
installation, excavation, machinery, equipment, or device, and any
attachment or addition to or reconstruction, replacement, or
improvement of that property, that is used, constructed, acquired,
or installed wholly or partly to meet or exceed rules or regulations
adopted by any environmental protection agency of the United
States, this state, or a political subdivision of this state for the
prevention, monitoring, control, or reduction of air, water, or
land pollution.
(2) "Pollution control" or a similar term includes the
prevention, monitoring, or reduction of pollution.
(b-1) This section does not apply to a motor vehicle.
(b-2) The circumstances in which property is considered to
be used, constructed, acquired, or installed wholly or partly to
meet or exceed rules or regulations described by Subsection (b)
include circumstances in which:
(1) the property is used as part of a voluntary project
or otherwise to meet or exceed a goal, target, or general standard
set by a rule or regulation described by that subsection; or
(2) the property is used to meet or exceed a rule or
regulation described by that subsection that has been adopted but
does not apply to the property because of:
(A) the date the property is installed;
(B) the manner in which the property is used; or
(C) the fact that the installation of the
property reduces or prevents pollution in a manner that prevents
the rule or regulation from applying to the property.
(b-3) For property to qualify for an exemption from taxation
under this section, the control of air, water, or land pollution
resulting from the use of the property must result from the use of
the property by the person seeking the exemption and not from the
characteristics of the goods produced or services provided by the
person or the use of those goods or services by another person.
(c) In applying for an exemption under this section, a
person seeking the exemption shall present in a permit application
or permit exemption request to the executive director of the Texas
Commission on Environmental Quality information detailing:
(1) the anticipated environmental benefits from the
installation of the facility, device, or method for the control of
air, water, or land pollution;
(2) the estimated cost of the pollution control
facility, device, or method; and
(3) the purpose of the installation of such facility,
device, or method[, and the proportion of the installation that is
pollution control property].
[If the installation includes property that is not used
wholly for the control of air, water, or land pollution, the person
seeking the exemption shall also present such financial or other
data as the executive director requires by rule for the
determination of the proportion of the installation that is
pollution control property.]
(d) Following submission of the information required by
Subsection (c), the executive director of the Texas Commission on
Environmental Quality shall determine if the facility, device, or
method is used wholly or partly as a facility, device, or method for
the control of air, water, or land pollution. As soon as
practicable, the executive director shall send notice by regular
mail or by electronic means to the chief appraiser of the appraisal
district for the county in which the property is located that the
person has applied for a determination under this subsection. The
executive director shall issue a letter to the person stating the
executive director's determination of whether the facility,
device, or method is used wholly or partly to control pollution
[and, if applicable, the proportion of the property that is
pollution control property]. The executive director shall send a
copy of the letter by regular mail or by electronic means to the
chief appraiser of the appraisal district for the county in which
the property is located.
(g) The commission shall adopt rules to implement this
section. Rules adopted under this section must:
(1) establish specific standards for considering
applications for determinations, including standards for
determining whether a facility or device is used as a facility,
device, or method for the control of air, water, or land pollution;
and
(2) be sufficiently specific to ensure that
determinations are equal and uniform[; and
[(3) allow for determinations that distinguish the
proportion of property that is used to control, monitor, prevent,
or reduce pollution from the proportion of property that is used to
produce goods or services].
(k) The Texas Commission on Environmental Quality shall
adopt rules establishing a nonexclusive list of facilities,
devices, or methods that qualify as facilities, devices, or methods
for the control of air, water, or land pollution, which must
include:
(1) coal cleaning or refining facilities;
(2) atmospheric or pressurized and bubbling or
circulating fluidized bed combustion systems and gasification
fluidized bed combustion combined cycle systems;
(3) ultra-supercritical pulverized coal boilers;
(4) flue gas recirculation components;
(5) syngas purification systems and gas-cleanup
units;
(6) enhanced heat recovery systems;
(7) exhaust heat recovery boilers;
(8) heat recovery steam generators;
(9) superheaters and evaporators;
(10) [enhanced] steam turbine systems enhanced to
accommodate steam from heat recovery systems;
(11) methanation;
(12) coal combustion or gasification byproduct and
coproduct handling, storage, or treatment facilities;
(13) biomass cofiring storage, distribution, and
firing systems;
(14) coal cleaning or drying processes, such as coal
drying/moisture reduction, air jigging, precombustion
decarbonization, and coal flow balancing technology;
(15) oxy-fuel combustion technology, amine or chilled
ammonia scrubbing, fuel or emission conversion through the use of
catalysts, enhanced scrubbing technology, modified combustion
technology such as chemical looping, and cryogenic technology;
(16) so long as [if] the United States Environmental
Protection Agency regulates [adopts a final rule or regulation
regulating] carbon dioxide as a pollutant or if any other
environmental protection agency of the United States, this state,
or a political subdivision of this state adopts a final rule or
regulation regulating carbon dioxide for that purpose, property
that is used, constructed, acquired, or installed wholly or partly
to:
(A) capture and sequester in this state carbon
dioxide from an anthropogenic source in this state; or
(B) [that is] geologically sequester carbon
dioxide captured from an anthropogenic source [sequestered in this
state]; and
(17) fuel cells generating electricity using hydrogen
derived from coal, biomass, petroleum coke, or solid waste[; and
[(18) any other equipment designed to prevent,
capture, abate, or monitor nitrogen oxides, volatile organic
compounds, particulate matter, mercury, carbon monoxide, or any
criteria pollutant].
(m) Notwithstanding the other provisions of this section,
if the executive director of the Texas Commission on Environmental
Quality confirms that the facility, device, or method for the
control of air, water, or land pollution described in an
application for an exemption under this section is a facility,
device, or method included on the list adopted under Subsection
(k), the executive director [of the Texas Commission on
Environmental Quality], not later than the 30th day after the date
of receipt of the information required by Subsections (c)(2) and
(3) and without regard to whether the information required by
Subsection (c)(1) has been submitted, shall determine that the
facility, device, or method described in the application is used
wholly or partly as a facility, device, or method for the control of
air, water, or land pollution and shall take the actions that are
required by Subsection (d) to be taken in a case in which [the
event] such a determination is made.
SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
adding Section 23.27 to read as follows:
Sec. 23.27. APPRAISAL OF PROPERTY AT FACILITY WHERE
POLLUTION CONTROL PROPERTY IS INSTALLED. If the executive director
of the Texas Commission on Environmental Quality determines under
Section 11.31 that property is used wholly or partly to control
pollution, the chief appraiser:
(1) may evaluate whether the pollution control
property facilitates an increase in production of goods at the
facility or the sale of a marketable product at a profit in the
ordinary course of business of the facility; and
(2) may take any additional income resulting from the
facilitation by the pollution control property of the increase in
production or the sale of a marketable product described by
Subdivision (1) into account if the chief appraiser uses the income
method of appraisal to determine the market value of the facility.
SECTION 3. Not later than December 31, 2015, the Texas
Commission on Environmental Quality shall adopt rules as necessary
to implement the changes in law made to Section 11.31, Tax Code, by
this Act.
SECTION 4. Sections 11.31(b) and (m), Tax Code, as amended
by this Act, and Sections 11.31(b-1), (b-2), (b-3), and 23.27, Tax
Code, as added by this Act, are intended to clarify rather than
change existing law.
SECTION 5. Sections 11.31(a), (c), (d), (g), and (k), Tax
Code, as amended by this Act, apply only to ad valorem taxes imposed
for a tax year beginning on or after January 1, 2016.
SECTION 6. (a) Except as provided by Subsection (b) of this
section:
(1) this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution; and
(2) if this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2015.
(b) Sections 11.31(a), (c), (d), (g), and (k), Tax Code, as
amended by this Act, take effect January 1, 2016.