Texas 2023 - 88th Regular

Texas House Bill HB3894 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R8840 CJD-F
2	2	By: Shine H.B. No. 3894
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to an exemption from sales and use taxes for battery energy
8	8	storage systems.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 151.318, Tax Code, is amended by
11	11	amending Subsection (a) and adding Subsection (g) to read as
12	12	follows:
13	13	(a) The following items are exempted from the taxes imposed
14	14	by this chapter if sold, leased, or rented to, or stored, used, or
15	15	consumed by a manufacturer:
16	16	(1) tangible personal property that will become an
17	17	ingredient or component part of tangible personal property
18	18	manufactured, processed, or fabricated for ultimate sale;
19	19	(2) tangible personal property directly used or
20	20	consumed in or during the actual manufacturing, processing, or
21	21	fabrication of tangible personal property for ultimate sale if the
22	22	use or consumption of the property is necessary or essential to the
23	23	manufacturing, processing, or fabrication operation and directly
24	24	makes or causes a chemical or physical change to:
25	25	(A) the product being manufactured, processed,
26	26	or fabricated for ultimate sale; or
27	27	(B) any intermediate or preliminary product that
28	28	will become an ingredient or component part of the product being
29	29	manufactured, processed, or fabricated for ultimate sale;
30	30	(3) services performed directly on the product being
31	31	manufactured prior to its distribution for sale and for the purpose
32	32	of making the product more marketable;
33	33	(4) actuators, steam production equipment and its
34	34	fuel, in-process flow through tanks, cooling towers, generators,
35	35	heat exchangers, transformers and the switches, breakers,
36	36	capacitor banks, regulators, relays, reclosers, fuses,
37	37	interruptors, reactors, arrestors, resistors, insulators,
38	38	instrument transformers, and telemetry units that are related to
39	39	the transformers, electronic control room equipment, computerized
40	40	control units, pumps, compressors, and hydraulic units, that are
41	41	used to power, supply, support, or control equipment that qualifies
42	42	for exemption under Subdivision (2) or (5) or to generate
43	43	electricity, chilled water, or steam for ultimate sale; battery
44	44	energy storage systems used to generate, process, or store
45	45	electricity for distribution and sale, regardless of the origin of
46	46	the electricity used to charge the battery energy storage system;
47	47	transformers located at an electric generating facility that
48	48	increase the voltage of electricity generated for ultimate sale,
49	49	the electrical cable that carries the electricity from the electric
50	50	generating equipment to the step-up transformers, and the switches,
51	51	breakers, capacitor banks, regulators, relays, reclosers, fuses,
52	52	interruptors, reactors, arrestors, resistors, insulators,
53	53	instrument transformers, and telemetry units that are related to
54	54	the step-up transformers; and transformers that decrease the
55	55	voltage of electricity generated for ultimate sale and the
56	56	switches, breakers, capacitor banks, regulators, relays,
57	57	reclosers, fuses, interruptors, reactors, arrestors, resistors,
58	58	insulators, instrument transformers, and telemetry units that are
59	59	related to the step-down transformers;
60	60	(5) tangible personal property used or consumed in the
61	61	actual manufacturing, processing, or fabrication of tangible
62	62	personal property for ultimate sale if the use or consumption of the
63	63	property is necessary and essential to a pollution control process;
64	64	(6) lubricants, chemicals, chemical compounds, gases,
65	65	or liquids that are used or consumed during the actual
66	66	manufacturing, processing, or fabrication of tangible personal
67	67	property for ultimate sale if their use or consumption is necessary
68	68	and essential to prevent the decline, failure, lapse, or
69	69	deterioration of equipment exempted by this section;
70	70	(7) gases used on the premises of a manufacturing
71	71	plant to prevent contamination of raw material or product, or to
72	72	prevent a fire, explosion, or other hazardous or environmentally
73	73	damaging situation at any stage in the manufacturing process or in
74	74	loading or storage of the product or raw material on premises;
75	75	(8) tangible personal property used or consumed during
76	76	the actual manufacturing, processing, or fabrication of tangible
77	77	personal property for ultimate sale if the use or consumption of the
78	78	property is necessary and essential to a quality control process
79	79	that tests tangible personal property that is being manufactured,
80	80	processed, or fabricated for ultimate sale;
81	81	(9) safety apparel or work clothing that is used
82	82	during the actual manufacturing, processing, or fabrication of
83	83	tangible personal property for ultimate sale if:
84	84	(A) the manufacturing process would not be
85	85	possible without the use of the apparel or clothing; and
86	86	(B) the apparel or clothing is not resold to the
87	87	employee;
88	88	(10) tangible personal property used or consumed in
89	89	the actual manufacturing, processing, or fabrication of tangible
90	90	personal property for ultimate sale if the use or consumption of the
91	91	property is necessary and essential to comply with federal, state,
92	92	or local laws or rules that establish requirements related to
93	93	public health; and
94	94	(11) tangible personal property specifically
95	95	installed to:
96	96	(A) reduce water use and wastewater flow volumes
97	97	from the manufacturing, processing, fabrication, or repair
98	98	operation;
99	99	(B) reuse and recycle wastewater streams
100	100	generated within the manufacturing, processing, fabrication, or
101	101	repair operation; or
102	102	(C) treat wastewater from another industrial or
103	103	municipal source for the purpose of replacing existing freshwater
104	104	sources in the manufacturing, processing, fabrication, or repair
105	105	operation.
106	106	(g) In this section, "battery energy storage system" means
107	107	an electrochemical device that processes, stores, and transforms
108	108	electrical energy into chemical energy and processes and transforms
109	109	chemical energy back into electrical energy for distribution and
110	110	sale. The term includes cells, battery modules, racks, battery
111	111	management systems, invertors or power conversion systems,
112	112	controllers, ventilation and cooling systems, fire suppression
113	113	systems, containers or enclosures, and ancillary equipment
114	114	including breakers, cabling, junction boxes, and lighting.
115	115	SECTION 2. The change in law made by this Act does not
116	116	affect tax liability accruing before the effective date of this
117	117	Act. That liability continues in effect as if this Act had not been
118	118	enacted, and the former law is continued in effect for the
119	119	collection of taxes due and for civil and criminal enforcement of
120	120	the liability for those taxes.
121	121	SECTION 3. This Act takes effect September 1, 2023.