5/13/10

Today, the Environmental Protection Agency issued proposed rules that would require the installation of control technologies to limit the emission of greenhouse gases in large industrial plants, including refineries and power plants.   The EPA rule if adopted would trigger the application of  tax exemption provisions for pollution control equipment in Subsection 11.31(k)(16), Pollution Control Property, in the Texas Tax Code. 

This issue is related to ongoing activities of the Tax Relief for Pollution Control Property Advisory Committee to the Texas Commission on Environmental Quality (TCEQ). Background information related to this topic is excerpted below from a document published earlier by the Legislative Budget Board.

In 1993, Texas voters approved a constitutional amendment permitting an exemption from property taxation for pollution control equipment, which is any facility, device, or method used for the control of air, water, or land pollution.  This exemption applied to pollution control equipment installed on or after January 1, 1994.  According to the Texas Constitution, Article 8, Section 1-1, pollution control property exempted from ad valorem taxation must be “all or part of real and personal property used, constructed, acquired, or installed whole 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.

In 2001, the Seventy-seventh Legislature directed the Texas Commission on Environmental Quality (TCEQ) to adopt specific standards for evaluating applications and a formal procedure for applicants and appraisal districts to appeal a determination.

School district officials have expressed serious concerns to the Tax Relief for Pollution Control Property Advisory Committee concerning funding consequences to local school districts if significant amounts of property values in large industrial plants are exempted from property taxes. 

To read the proposed EPA rule click on the link below.

http://www.eenews.net/public/25/15625/features/documents/2010/05/13/document_gw_03.pdf