By: Zaffirini S.B. No. 1685

A BILL TO BE ENTITLED

AN ACT

relating to exemptions from property taxation and sales and use taxation for certain offshore spill response and well containment property used to control pollution.

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), and (m) and adding Subsections (o) and (p) to read as follows:

(a) A person is entitled to an exemption from taxation of all or part of 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. 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, except as provided in Subsection (o). 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, "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 and includes property described in Subsection (o). In this section, "pollution control property" includes property described in Subsection (o). This section does not apply to a motor vehicle.

(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.

If the installation includes property that is not used wholly for the control of air, water, or land pollution or described in Subsection (o), 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.

(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 or as property described in Subsection (o) 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.

(m) Notwithstanding the other provisions of this section, if 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) or property described in Subsection (o), 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) in the event such a determination is made.

(o) Notwithstanding any other provision in this section, a person is entitled to an exemption from taxation of all or part of real and personal property that the person owns or leases and that is used, constructed, acquired, stored, or installed primarily as part of an offshore spill response containment system. For purposes of this section, property described in this subsection shall be treated as used wholly as a facility, device, or method for the control of air, water, or land pollution.

(p) In Subsection (o):

(1) "Offshore spill response containment system" means:

(A) a containment system:

(i) for a response plan 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 control, reduction, or monitoring of air, water, or land pollution in the event of a blowout or loss of control of an offshore well drilled or used for the exploration for or production of oil, gas, sulphur or other minerals; and

(ii) having a design capability to respond to a blowout or loss of control of such an offshore well drilled in more than 5,000 feet of water; and

(B) real and personal property used for the development, improvement, storage, deployment, repair, maintenance, or testing of such containment system.

(2) "Environmental protection agency of the United States" includes:

(A) the United States Department of the Interior and agencies, bureaus, or other entities established in the United States Department of the Interior, including the Bureau of Safety and Environmental Enforcement and the Bureau of Ocean Energy Management; and

(B) any other department, agency, bureau, or entity of the United States that prescribes rules or regulations described by Subsection (p)(1)(A)(i).

(3) "Rules or regulations adopted by any environmental protection agency of the United States" include Title 30, Code of Federal Regulations, Part 254, and any corresponding provision or provisions of succeeding, similar, substitute, proposed, or final federal regulations.

SECTION 2. Chapter 151, Tax Code, is amended by adding Section 151.356 to read as follows:

Sec. 151.356 OFFSHORE SPILL RESPONSE AND WELL CONTAINMENT PROPERTY. (a) A person described in Section 11.31(o), Tax Code, is entitled to an exemption from the taxes imposed by this chapter for the purchase, sale, lease, rental, storage, use or consumption of property described in Section 11.31(o), Tax Code.

(b) A service performed on property described in Section 11.31(o), Tax Code, is exempted from the taxes imposed by this chapter.

SECTION 3. 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. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2013.