Brazos Electric Power Cooperative, Inc. v. Texas Commission on Environmental Quality and Richard A. Hyde, Executive Director of the Texas Commission on Environmental Quality

Summary

The Supreme Court of Texas held that Texas Tax Code section 11.31 requires the Texas Commission on Environmental Quality to issue a positive use determination for heat recovery steam generators identified on the statutory pollution-control property list, assuming the applicant otherwise complies with the statute. The Court concluded that the Legislature had withdrawn the Executive Director’s discretion to determine whether such listed property qualifies as pollution-control property, although discretion remained regarding the proportion of property eligible for exemption. The Court reversed the court of appeals’ judgment and remanded for further proceedings.

Holdings

1. Section 11.31 mandates that the Executive Director determine that a heat recovery steam generator is at least partly pollution-control property because HRSGs are included on the k-list. As long as HRSGs remain on that list and the application otherwise complies with the statute, the Commission may not issue a negative use determination for the application.
2. The Commission abused its discretion by issuing negative use determinations for Brazos Electric's HRSG applications.

Questions Presented

1. Whether Texas Tax Code section 11.31 requires a positive use determination for heat recovery steam generators included on the statutory k-list of pollution-control property.
2. Whether the Commission abused its discretion by issuing negative use determinations for Brazos Electric's compliant heat recovery steam generator applications.

Disposition

reversed_and_remanded