Bill Text: TX HB3894 | 2023-2024 | 88th Legislature | Introduced
Bill Title: Relating to an exemption from sales and use taxes for battery energy storage systems.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2023-04-17 - Left pending in committee [HB3894 Detail]
Download: Texas-2023-HB3894-Introduced.html
| 88R8840 CJD-F | ||
| By: Shine | H.B. No. 3894 | |
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| relating to an exemption from sales and use taxes for battery energy | ||
| storage systems. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 151.318, Tax Code, is amended by | ||
| amending Subsection (a) and adding Subsection (g) to read as | ||
| follows: | ||
| (a) The following items are exempted from the taxes imposed | ||
| by this chapter if sold, leased, or rented to, or stored, used, or | ||
| consumed by a manufacturer: | ||
| (1) tangible personal property that will become an | ||
| ingredient or component part of tangible personal property | ||
| manufactured, processed, or fabricated for ultimate sale; | ||
| (2) tangible personal property directly used or | ||
| consumed in or during the actual manufacturing, processing, or | ||
| fabrication of tangible personal property for ultimate sale if the | ||
| use or consumption of the property is necessary or essential to the | ||
| manufacturing, processing, or fabrication operation and directly | ||
| makes or causes a chemical or physical change to: | ||
| (A) the product being manufactured, processed, | ||
| or fabricated for ultimate sale; or | ||
| (B) any intermediate or preliminary product that | ||
| will become an ingredient or component part of the product being | ||
| manufactured, processed, or fabricated for ultimate sale; | ||
| (3) services performed directly on the product being | ||
| manufactured prior to its distribution for sale and for the purpose | ||
| of making the product more marketable; | ||
| (4) actuators, steam production equipment and its | ||
| fuel, in-process flow through tanks, cooling towers, generators, | ||
| heat exchangers, transformers and the switches, breakers, | ||
| capacitor banks, regulators, relays, reclosers, fuses, | ||
| interruptors, reactors, arrestors, resistors, insulators, | ||
| instrument transformers, and telemetry units that are related to | ||
| the transformers, electronic control room equipment, computerized | ||
| control units, pumps, compressors, and hydraulic units, that are | ||
| used to power, supply, support, or control equipment that qualifies | ||
| for exemption under Subdivision (2) or (5) or to generate | ||
| electricity, chilled water, or steam for ultimate sale; battery | ||
| energy storage systems used to generate, process, or store | ||
| electricity for distribution and sale, regardless of the origin of | ||
| the electricity used to charge the battery energy storage system; | ||
| transformers located at an electric generating facility that | ||
| increase the voltage of electricity generated for ultimate sale, | ||
| the electrical cable that carries the electricity from the electric | ||
| generating equipment to the step-up transformers, and the switches, | ||
| breakers, capacitor banks, regulators, relays, reclosers, fuses, | ||
| interruptors, reactors, arrestors, resistors, insulators, | ||
| instrument transformers, and telemetry units that are related to | ||
| the step-up transformers; and transformers that decrease the | ||
| voltage of electricity generated for ultimate sale and the | ||
| switches, breakers, capacitor banks, regulators, relays, | ||
| reclosers, fuses, interruptors, reactors, arrestors, resistors, | ||
| insulators, instrument transformers, and telemetry units that are | ||
| related to the step-down transformers; | ||
| (5) tangible personal property used or consumed in the | ||
| actual manufacturing, processing, or fabrication of tangible | ||
| personal property for ultimate sale if the use or consumption of the | ||
| property is necessary and essential to a pollution control process; | ||
| (6) lubricants, chemicals, chemical compounds, gases, | ||
| or liquids that are used or consumed during the actual | ||
| manufacturing, processing, or fabrication of tangible personal | ||
| property for ultimate sale if their use or consumption is necessary | ||
| and essential to prevent the decline, failure, lapse, or | ||
| deterioration of equipment exempted by this section; | ||
| (7) gases used on the premises of a manufacturing | ||
| plant to prevent contamination of raw material or product, or to | ||
| prevent a fire, explosion, or other hazardous or environmentally | ||
| damaging situation at any stage in the manufacturing process or in | ||
| loading or storage of the product or raw material on premises; | ||
| (8) tangible personal property used or consumed during | ||
| the actual manufacturing, processing, or fabrication of tangible | ||
| personal property for ultimate sale if the use or consumption of the | ||
| property is necessary and essential to a quality control process | ||
| that tests tangible personal property that is being manufactured, | ||
| processed, or fabricated for ultimate sale; | ||
| (9) safety apparel or work clothing that is used | ||
| during the actual manufacturing, processing, or fabrication of | ||
| tangible personal property for ultimate sale if: | ||
| (A) the manufacturing process would not be | ||
| possible without the use of the apparel or clothing; and | ||
| (B) the apparel or clothing is not resold to the | ||
| employee; | ||
| (10) tangible personal property used or consumed in | ||
| the actual manufacturing, processing, or fabrication of tangible | ||
| personal property for ultimate sale if the use or consumption of the | ||
| property is necessary and essential to comply with federal, state, | ||
| or local laws or rules that establish requirements related to | ||
| public health; and | ||
| (11) tangible personal property specifically | ||
| installed to: | ||
| (A) reduce water use and wastewater flow volumes | ||
| from the manufacturing, processing, fabrication, or repair | ||
| operation; | ||
| (B) reuse and recycle wastewater streams | ||
| generated within the manufacturing, processing, fabrication, or | ||
| repair operation; or | ||
| (C) treat wastewater from another industrial or | ||
| municipal source for the purpose of replacing existing freshwater | ||
| sources in the manufacturing, processing, fabrication, or repair | ||
| operation. | ||
| (g) In this section, "battery energy storage system" means | ||
| an electrochemical device that processes, stores, and transforms | ||
| electrical energy into chemical energy and processes and transforms | ||
| chemical energy back into electrical energy for distribution and | ||
| sale. The term includes cells, battery modules, racks, battery | ||
| management systems, invertors or power conversion systems, | ||
| controllers, ventilation and cooling systems, fire suppression | ||
| systems, containers or enclosures, and ancillary equipment | ||
| including breakers, cabling, junction boxes, and lighting. | ||
| SECTION 2. The change in law made by this Act does not | ||
| affect tax liability accruing before the effective date of this | ||
| Act. That liability continues in effect as if this Act had not been | ||
| enacted, and the former law is continued in effect for the | ||
| collection of taxes due and for civil and criminal enforcement of | ||
| the liability for those taxes. | ||
| SECTION 3. This Act takes effect September 1, 2023. | ||
