1. (a) A Tier III application requesting a partial determination must be submitted for all property that is either not used as described on the Tier I Table located in §17.14 of this title (relating to Tier I Pollution Control Property), or does not fully satisfy the requirements for a 100% positive use determination under this chapter. For all property for which a partial use determination is sought, the cost analysis procedure (CAP) described in subsection (b) of this section must be used.

2. (b) Consistent with subsection (a) of this section, the following calculation (cost analysis procedure) must be used to determine the creditable partial percentage for a property that is filed on a Tier III application:

   1. (1) If no marketable product results from the use of the property, use the following equation and enter "0" for the net present value of the marketable product (NPVMP):
      Attached Graphic
      
   2. (2) For property that generates a marketable product (MP), the net present value (NPV) of the MP is used to reduce the partial determination when used in the equation in the figure in paragraph (1) of this subsection. The value of the MP is calculated by subtracting the production costs of the MP from the market value of the MP. This value is then used to calculate the NPV of the MP (NPVMP) over the lifetime of the equipment. The equation for calculating NPVMP is as follows:
      Attached Graphic
      
3. (c) If the cost analysis procedure of this section produces a negative number or a zero, the property is not eligible for a positive use determination.

Source Note:The provisions of this §17.17 adopted to be effective January 9, 2002, 27 TexReg 185; amended to be effective February 7, 2008, 33 TexReg 932; amended to be effective December 13, 2010, 35 TexReg 10964; amended to be effective January 7, 2021, 46 TexReg 176; amended to be effective February 17, 2026, 51 TexReg 904.