HBA-JRA H.B. 3608 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3608 By: Burnam Ways & Means 4/16/1999 Introduced BACKGROUND AND PURPOSE Current law imposes a 7.5 percent severance tax on natural gas, 4.25 percent severance tax on oil, and no tax on coal. Texas uses more coal for electricity production than any other state. The external costs of using coal, such as the negative effect on public health, are high. H.B. 3608 imposes a 7.5 percent use tax on coal or lignite purchased in this state for use by a public utility in this state and provides a penalty for late payment. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle E, Title 2, by adding Chapter 161, as follows: CHAPTER 161. PUBLIC UTILITY COAL TAX SUBCHAPTER A. GENERAL PROVISIONS Sec. 161.001. DEFINITIONS. Defines "coal," "lignite," "public utility," and "use" in this chapter. SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX Sec. 161.021. TAX IMPOSED. (a) Provides that a tax is imposed on the purchase in this state of coal for use in this state by a public utility engaged in business in this state. (b) Provides that a tax is imposed on the use of any coal in this state by such a public utility. Sec. 161.022. RATE OF TAX. Provides that the rate of the taxes imposed by this chapter is 7.5 percent of the price paid for the coal by the public utility. Sec. 161.023. USE TAX DEDUCTION. Authorizes a public utility to deduct from the amount of tax otherwise imposed by Section 161.021(b) the amount of tax reported and paid under Section 161.021(a). Sec. 161.024. PAYMENT OF TAX. Requires each public utility to send to the comptroller the amount of tax due under this chapter for the preceding month by the 25th day of each month. Sec. 161.025. REPORTS. Requires each public utility to file with the comptroller of public accounts a report stating the amount of coal purchased by the public utility for use in this state and used in this state during the preceding month, the price of that coal, and any other information required by the comptroller by the 25th day of each month. Provides that a public utility that does not purchase or use coal during a month is not required to file a report. Authorizes the comptroller to require a public utility to file an information report with the comptroller that contains any information the comptroller requires to determine eligibility for the exemption. Sec. 161.026. RECORDS. Requires a public utility to keep a complete record of the use of coal in this state by the public utility, the amount of coal purchased by the public utility for use in this state, and any other information required by the comptroller. SUBCHAPTER C. PENALTIES AND OFFENSES Sec. 161.051. INTEREST ON DELINQUENT TAX. Provides that a tax imposed by this chapter that is delinquent draws interest as provided by Section 111.060 (Interest on Delinquent Tax). Sec. 161.052. PENALTY. Provides that a person on whom a tax is imposed by this chapter and who fails to file a report as required by this chapter or does not pay the tax when it is due forfeits to the state a penalty of 12 percent of the amount of tax delinquent. Provides that if a report required by this chapter is not filed or a tax imposed by this chapter is not paid within 30 days after it is due, the person on whom the tax is imposed forfeits to the state a penalty of an additional 12 percent of the amount of tax delinquent. Provides that the minimum penalty under this section is $1. Sec. 161.053. CRIMINAL PENALTY. Provides that a person who violates this chapter commits a Class C misdemeanor. SUBCHAPTER D. ALLOCATION Sec. 161.071. ALLOCATION OF TAX REVENUE. Requires all of the revenue from the tax imposed by this chapter to be deposited to the credit of the general revenue fund. SECTION 2. Effective date: December 1, 1999. Makes application of this Act prospective. SECTION 3. Emergency clause.