| TO: | Honorable Jim Keffer, Chair, House Committee on Ways & Means |
| FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
| IN RE: | HB2841 by Chisum (Relating to the exemption from the sales and use tax for gas and electricity used in manufacturing and processing.), As Introduced |
The bill would amend Chapter 151 of the Tax Code to require manufacturers to file a comprehensive electric and gas predominant use study, which would be certified by the Comptroller, to become eligible for the sales tax exemption for gas and electricity. The study would be performed by a registered independent service provider and conducted by a licensed engineer.
The certification of exemption would expire on the third anniversary of the date on which it was granted. To renew certification, a person would be required to submit an updated comprehensive electric and gas predominant use study.
The Comptroller would adopt and enforce rules relating to the registration of independent service providers qualified to conduct a comprehensive electric and gas predominant use study. Independent service providers would have to pay an annual registration fee of $2,000 and file a bond with the Comptroller in an amount not less than $20,000.
The bill would codify current Comptroller policy regarding predominant use studies for manufacturing gas and electricity. The bill would require the studies to be performed by registered independent service providers and certified by the Comptroller. It is unknown how many independent service providers would register and pay the annual fee, but it would have an insignificant impact to state revenue.
The bill would take effect September 1, 2005.
| Source Agencies: | 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, SD, WP, SM
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