By Madla                                               S.B. No. 857
         77R6255 DAK-F                           
                                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.
 1-5           SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended by
 1-6     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
 2-1     system or series of mechanisms designed primarily to provide
 2-2     heating or cooling, to provide liquid or gaseous fuels, or to
 2-3     produce electrical or mechanical power by means of collecting,
 2-4     transferring, or converting renewable energy.  The term includes a
 2-5     mechanical or chemical device that has the capacity for storing
 2-6     renewable energy for use in heating or cooling, in the production
 2-7     of power, or as liquid or gaseous fuels.
 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. (a)  This Act takes effect July 1, 2001, if it
2-12     receives a vote of two-thirds of all the members elected to each
2-13     house, as provided by Section 39, Article III, Texas Constitution.
2-14     If this Act does not receive the vote necessary for effect on that
2-15     date, this Act takes effect October 1, 2001.
2-16           (b)  The change in law made by this Act does not affect taxes
2-17     imposed before the effective date of this Act, and the law in
2-18     effect before the effective date of this Act is continued in effect
2-19     for purposes of the liability for and collection of those taxes.