By Davis of Dallas                                    H.B. No. 3609
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the sales and use tax exemption for gas and
 1-3     electricity.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 151.317, Tax Code, is amended to read as
 1-6     follows:
 1-7           (d)  Except as otherwise provided in subsection (f), [T] to
 1-8     qualify for the exemptions in Subsections (a)(2)-(8), gas or
 1-9     electricity must be sold to the person using the gas or electricity
1-10     in the exempt manner.  For purposes of the subsection, the use of
1-11     gas or electricity in an exempt manner by an independent contractor
1-12     engaged by the purchaser of the gas or electricity to perform one
1-13     or more of the exempt activities identified in Subsections
1-14     (a)(2)-(8) is considered use by the purchaser of the gas or
1-15     electricity.
1-16           (e)  Natural gas or electricity used during a regular monthly
1-17     billing period for both exempt and taxable purposes under a single
1-18     meter is totally exempt or taxable based on the predominant use of
1-19     the natural gas or electricity measured by that meter.  The
1-20     comptroller may prescribe by rule the procedures by which a
1-21     purchaser must establish the predominant use of the natural gas or
1-22     electricity.
1-23           (f)  Natural gas or electricity is exempt if it is sold to an
 2-1     owner of a building or a management company that directly passes
 2-2     the actual charge for gas or electricity to a tenant who performs
 2-3     exempt activities identified in Subsection (a)(8) and if that
 2-4     tenant's use of gas or electricity meets the requirement noted in
 2-5     subsection.
 2-6           SECTION 2. Each change in law made by this Act is a
 2-7     clarification of existing law and does not imply that existing law
 2-8     may be construed as inconsistent with the law as amended by this
 2-9     Act.
2-10           SECTION 3. This Act takes affect September 1, 2001.
2-11           SECTION 4. The importance of this legislation and the crowded
2-12     condition of the calendars in both houses create an emergency and
2-13     an imperative public necessity that the constitutional rule
2-14     requiring bills to be read on three several days in each house be
2-15     suspended, an this rule is hereby suspended.