Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter O - STATE AND LOCAL SALES AND USE TAXES › Section 3.326 - Carbon Dioxide Capture and Sequestration

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Definitions. The following words and terms, when used in this section, shall
				  have the following meanings, unless the context clearly indicates otherwise.
(1) Advanced Clean Energy Project--A project
				  for which an application for a permit or for an authorization to use a standard
				  permit under Health and Safety Code, Chapter 382 is received by the Texas
				  Commission on Environmental Quality on or after January 1, 2008, and before
				  January 1, 2020. At its conclusion, the project will meet all standards with
				  respect to energy sourcing, method of related generation or co-generation of
				  electricity, emissions levels, and carbon dioxide capture and sequestration as
				  set forth in Health and Safety Code, §
											382.003(1-a). A
				  project may include new construction; nonresidential repair, remodeling, or
				  restoration; maintenance; or the sale and installation of qualifying components
				  of tangible personal property.
(2)
				  Anthropogenic Emission Source--A location that emits man-made carbon dioxide,
				  including but not limited to, a coal burning electric production
				  plant.
(3) Clean Energy Project--A
				  project defined by Natural Resources Code, §
											120.001(2),
				  and certified as such by the Railroad Commission of Texas as provided by
				  Natural Resources Code, §
											120.004.
				  A project may include new construction; nonresidential repair, remodeling, or
				  restoration; maintenance; or the sale and installation of qualifying components
				  of tangible personal property.
(4)
				  Components of tangible personal property--For the purposes of this section, the
				  term shall have the meaning given to the term "tangible personal property" as
				  defined in Tax Code, §
											151.009
				  and includes tubing, pipe, valves, tanks, machinery and equipment, including
				  replacement parts for such items, used specifically to capture carbon dioxide
				  from an anthropogenic emission source, to transport or inject carbon dioxide
				  from such a source, or to prepare carbon dioxide from such a source for
				  transportation or injection. The term also includes actuators, generators,
				  transformers (and the switches, breakers, capacitor banks, regulators, relays,
				  reclosers, fuses, interruptors, reactors, arrestors, resistors, insulators,
				  instrument transformers, and telemetry units that are related to the
				  transformers), electronic control room equipment, computerized control units,
				  pumps, hydraulic units, and related accessories that are used to power, supply,
				  support, or control such components.
(5) Install--To attach or incorporate
				  components of tangible personal property that either retain their identity as
				  tangible personal property or become improvements to realty.
(6) Maintenance on real property--For
				  operational and functional improvements to realty, maintenance means scheduled,
				  periodic work that is necessary to sustain or support safe, efficient,
				  continuous operations, or to prevent the decline, failure, lapse, or
				  deterioration of the improvement. Taxable real property services that are
				  described by §
											3.356 of
				  this title (relating to Real Property Service) do not qualify as maintenance.
				  Maintenance does not include work to remodel, modify, upgrade, perform major
				  repair, or restore, even if the work is scheduled or periodic.
(A) As it relates to maintenance, the term
				  "scheduled" means anticipated and designated to occur within a given time
				  period or production level.
(B) As
				  it relates to maintenance, the term "periodic" means ongoing or continual or at
				  least occurring at intervals of time or production that are reasonably
				  predictable.
(7)
				  Modification--The alteration or upgrade of an existing improvement to real
				  property by repair, remodeling, or restoration (see §
											3.357
				  of this title (relating to Nonresidential Real Property Repair, Remodeling, and
				  Restoration; Real Property Maintenance)) or the alteration or upgrade of
				  existing components of tangible personal property that have maintained their
				  identity as tangible personal property after installation. Partial demolition
				  of existing nonresidential realty is taxable modification. The complete
				  demolition of an existing nonresidential improvement to real property is not
				  modification and is not taxable.
(8) Replacement part--Any part attached to an
				  installed component of tangible personal property to repair or upgrade the
				  component.
(9) Sequester--To inject
				  carbon dioxide into a geological formation:
(A) as part of an enhanced oil recovery
				  project that qualifies for a tax rate reduction under Tax Code, §
												202.0545(c);
				  or
(B) in a manner and under
				  conditions that create a reasonable expectation that at least 99% of the carbon
				  dioxide will remain separated from the earth's atmosphere for at least 1,000
				  years.