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A BILL TO BE ENTITLED
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AN ACT
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relating to a sales tax exemption for the sale, lease, or |
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installation of distributed energy systems for residential and |
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business use. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Short Title. |
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This Act may be cited as the "Texas Distributed Energy Sales |
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Tax Exemption Act." |
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SECTION 2. LEGISLATIVE FINDINGS AND PURPOSE. |
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(a) The legislature finds that: |
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(1) advancements in energy generation technology |
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enable homeowners, businesses, and industrial facilities to |
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produce electricity on-site using distributed energy systems; |
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(2) exempting distributed energy systems from sales |
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and use taxes is necessary to maintain a competitive and equitable |
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energy market, support energy security, and promote economic growth |
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in this state; and |
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(3) the imposition of sales and use taxes on |
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distributed energy systems creates a financial barrier to adoption |
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and limits access to energy self-sufficiency. |
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(b) The purpose of this Act is to exempt from sales and use |
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taxes the sale, lease, or installation of distributed energy |
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systems in this state. |
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SECTION 3. SALES TAX EXEMPTION FOR DISTRIBUTED ENERGY |
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SYSTEMS. |
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Chapter 151, Tax Code, is amended by adding Section 151.3187 |
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to read as follows: |
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Sec. 151.3187. DISTRIBUTED ENERGY SYSTEMS. |
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(a) In this section, "distributed energy system" means a |
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device or system that: |
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(1) generates electricity solely for on-site use: |
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(A) solar energy; |
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(B) wind energy; |
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(C) natural gas; |
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(D) hydrogen; |
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(E) methane; |
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(F) propane; |
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(G) battery storage; or |
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(H) liquid fuels; |
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(2) includes equipment necessary to support the |
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operation of the system, including: |
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(A) photovoltaic panels; |
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(B) inverters; |
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(C) battery storage systems; |
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(D) mounting hardware rated for solar or battery |
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installation; |
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(E) natural gas or hydrogen generators; or |
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(F) methane digesters; and |
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(3) is primarily designed and used to supply |
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electricity to a structure or facility located in this state. |
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(b) The sale, use, lease, or installation of a distributed |
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energy system is exempt from the taxes imposed by this chapter. |
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(c) The exemption under Subsection (b) applies only to the |
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portion of a transaction directly attributable to the purchase, |
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lease, or installation of a distributed energy system and does not |
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apply to costs related to: |
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(1) construction not directly required for the |
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installation of the system; |
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(2) repairs; or |
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(3) maintenance services. |
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(d) A person claiming an exemption under this section shall, |
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on request of the comptroller, provide documentation sufficient to |
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establish eligibility for the exemption, including records |
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verifying that the system meets the requirements of Subsection (a). |
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SECTION 4. COMPTROLLER RULEMAKING. |
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(a) The comptroller shall adopt rules as necessary to |
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implement and administer Section 151.3187, Tax Code, as added by |
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this Act, including rules to: |
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(1) establish criteria for determining the |
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eligibility of a device or system as a distributed energy system; |
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(2) prescribe reporting requirements for sellers, |
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lessors, and installers claiming the exemption; and |
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(3) provide for enforcement measures to ensure |
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compliance with this Act. |
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(b) The comptroller shall adopt the rules required by |
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Subsection (a) not later than June 1, 2025. |
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SECTION 5. EFFECTIVE DATE; APPLICATION. |
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(a) This Act takes effect July 1, 2025. |
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(b) The exemption provided by Section 151.3187, Tax Code, as |
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added by this Act, applies only to a sale, lease, or installation of |
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a distributed energy system that occurs on or after July 1, 2025. |
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SECTION 6. SEVERABILITY. |
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If a provision of this Act or its application to a person or |
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circumstance is held invalid, the invalidity does not affect |
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another provision or application of this Act that can be given |
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effect without the invalid provision or application, and to this |
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end the provisions of this Act are severable. |