Relating to exempting fuel ethanol derived from cellulosic biomass and blended with gasoline from the motor fuels tax.
Impact
The bill would amend Section 162.104 of the Texas Tax Code, ensuring that the tax imposed on motor fuels does not apply to fuel ethanol mixed with gasoline when it is distinctly identified as such on sales invoices. This change is significant as it would lighten the tax burden on producers and sellers of this biofuel, which could make it more competitive with traditional gasoline. As a result, it could stimulate the development of local biofuel industries and contribute positively to Texas' efforts in renewable energy production.
Summary
House Bill 1427 proposes to exempt fuel ethanol derived from cellulosic biomass that is blended with gasoline from the motor fuels tax. This legislative move aims to support the use of renewable energy sources and promote more environmentally friendly fuel alternatives. By exempting this specific type of fuel from tax, the bill encourages the growth of the renewable fuels market in Texas, potentially leading to increased production and consumption of greener fuels.
Contention
While the bill primarily aims to boost renewable energy efforts, it may face scrutiny regarding its effectiveness in actual tax revenue generation for the state. Some legislators may express concerns about the potential loss of revenue from the motor fuels tax, which is traditionally a significant source of funding for transportation infrastructure. There may also be debates about the environmental integrity of cellulosic ethanol production and its economic viability compared to other renewable energy sources.
Relating to state and municipal motor fuel taxes; providing civil penalties; creating criminal offenses; requiring occupational licenses; authorizing the imposition of taxes; providing for increases and decreases in the rates of taxes.