HBA-SEP H.B. 3121 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3121
By: Ritter
Ways & Means
3/30/2001
Introduced



BACKGROUND AND PURPOSE 

Current law entitles a person to an exemption from ad valorem taxation for
all or part of real and personal property used to control pollution.
However, there has been some dispute over what is a reasonable percentage
to be exempted because of changes to or the addition of new production
equipment that results in an environmental improvement.  House Bill 3121
specifies that rules adopted by the Texas Natural Resource Conservation
Commission establish specific standards by which applications for the
determination of whether property is used for pollution control be uniform
and equal and ensure that property used for the production of goods and
services not be exempt.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Natural Resource Conservation
Commission in SECTION 1 (Section 11.31, Tax Code) of this bill. 

ANALYSIS

House Bill 3121 amends the Tax Code to require, rather than authorize, the
Texas Natural Resource Conservation Commission (TNRCC) to adopt rules to
implement provisions regarding property used to control pollution that
establish specific standards by which applications for determinations that
property is pollution control property will be considered.  The rules are
required to be sufficiently specific to ensure that determinations are
uniform and equal and ensure that property used for the production of goods
and services is not determined to be exempt.  The bill requires the
executive director of TNRCC to grant a positive determination only for
applications that meet the specified standards.  The bill provides that the
chief appraiser may challenge the determination of the executive director
as a contested case under the Administrative Procedure Act.  A chief
appraiser is required to accept a final decision, after all appeals are
exhausted or waived, as conclusive evidence that the facility, device, or
method is used wholly or partly as pollution control property.   

EFFECTIVE DATE

September 1, 2001.