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.