The Texas Property Tax Reform and Transparency Act of 2019 aims to reduce the tax burden on property owners. It does this by requiring voter approval before taxing units can increase their property tax revenue. It also requires limits on certain tax increases.
The new legislation amends Section 26.045 of the Tax Code. This section lays out the requirements for counties, cities, and special districts to avail of voter-approval tax rate relief through pollution control.
Here’s what the law says:
Voter-approval tax rate relief and pollution control
According to the Tax Code, political subdivisions of the state of Texas can receive voter-approval tax rate relief by meeting certain pollution control requirements. Political subdivisions include cities, counties, villages, towns, and special districts.
The law says that a political subdivision’s voter-approval tax rate will be increased by the rate that, when applied to the current total value, will impose taxes equal to what the political subdivision will spend from its maintenance and operations fund on a pollution control device, facility, or method.
The facility, method, or device must meet the requirements for a permit from the Texas Commission on Environmental Quality. It must control, reduce, prevent, or track land, water, or air pollution. It can be a building, structure, machinery, equipment, or installation.
How to get voter-approval tax relief for pollution control
For its voter-approval tax rate to be adjusted, the political subdivision must submit a permit application or a permit exemption request to the executive director of the Texas Commission on Environmental Quality. The application or request must provide sufficient information about the pollution control facility, device, or method.
This information must include the expected environmental benefits of the device, facility, or method on air, land, or water pollution control. It must state the estimated cost of the device, facility, or method. It must also explain the exact purpose of the pollution control device, method, or facility.
After the executive director of the Texas Commission on Environmental Quality receives the information, he or she will check if the device, facility, or method is used for pollution control wholly or partly. The executive director will then report his findings to the political subdivision. The letter will state what part of the cost of the facility, method, or device is for pollution control.
The political subdivision will pay a fee to have their property inspected. The fee charged by the Texas Commission on Environmental Quality to determine if the property is for pollution control should not be more than the administrative costs for determining the purpose of the property, processing the information, and issuing the letter.
After receiving the letter from the Texas Commission on Environmental Quality, the political subdivision will provide a copy to its tax assessor. The letter from the commission will serve as conclusive evidence that the property is for pollution control. The tax assessor will then adjust the political subdivision’s voter-approval tax rate.
List of pollution control facilities, devices, and methods
The Tax Code has a list of facilities, devices, or methods for land, water, and air pollution control. The list includes:
- Enhanced heat recovery systems
- Enhanced steam turbine systems
- Heat recovery steam generators
- Coal cleaning or refining facilities
- Coal cleaning processes like coal drying/moisture reduction, coal flow balancing technology, and precombustion decarbonization
- Superheaters and evaporators
- Flue gas recirculation components
- Exhaust heat recovery boilers
- Fuel cells that generate electricity from biomass, coal, or solid waste
- Oxy-fuel combustion technology
Click here for the full list. The Texas Commission on Environmental Quality updates the list every three years. It can remove an item from the list if there is evidence that it has no pollution control benefits.
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