By:  Madla                                             S.B. No. 857
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to exempting renewable energy devices from the sales and
 1-3     use tax.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter H, Chapter 151, Tax Code, is amended
 1-6     by adding Section 151.357 to read as follows:
 1-7           Sec. 151.357.  RENEWABLE ENERGY DEVICES.  (a)  In this
 1-8     section:
 1-9                 (1)  "Renewable energy" means an energy source that is
1-10     naturally regenerated over a short time scale and derived directly
1-11     or indirectly from the sun or from other natural movements and
1-12     mechanisms of the environment.  The term:
1-13                       (A)  includes energy derived directly from:
1-14                             (i)  the sun, wind, water, waves, and
1-15     tides;
1-16                             (ii)  geothermal forces; and
1-17                             (iii)  biomass and biomass-derived waste
1-18     products, including landfill gas; and
1-19                       (B)  does not include energy derived from:
1-20                             (i)  fossil fuels and waste products from
1-21     fossil fuels; and
1-22                             (ii)  waste products from inorganic
1-23     sources.
1-24                 (2)  "Renewable energy device" means that portion of a
1-25     system or series of mechanisms designed primarily to provide
 2-1     heating or cooling, to provide liquid or gaseous fuels, or to
 2-2     produce electrical or mechanical power by means of collecting,
 2-3     transferring, or converting renewable energy.  The term includes a
 2-4     mechanical or chemical device that has the capacity for storing
 2-5     renewable energy for use in heating or cooling, in the production
 2-6     of power, or as liquid or gaseous fuels.  The term does not include
 2-7     air-source heat pump systems.
 2-8           (b)  The sale or use of a renewable energy device, including
 2-9     its component parts and repair or replacement parts, is exempt from
2-10     the tax imposed by this chapter.
2-11           SECTION 2.  Section 151.357, Tax Code, as added by this Act,
2-12     expires August 31, 2003.
2-13           SECTION 3.  (a)  This Act takes effect July 1, 2001, if it
2-14     receives a vote of two-thirds of all the members elected to each
2-15     house, as provided by Section 39, Article III, Texas Constitution.
2-16     If this Act does not receive the vote necessary for effect on that
2-17     date, this Act takes effect October 1, 2001.
2-18           (b)  The change in law made by this Act does not affect taxes
2-19     imposed before the effective date of this Act, and the law in
2-20     effect before the effective date of this Act is continued in effect
2-21     for purposes of the liability for and collection of those taxes.