HBA-EDN H.B. 2901 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2901
By: Burnam
Ways & Means
4/20/2001
Introduced



BACKGROUND AND PURPOSE 

Texas uses more coal for electricity production than any other state, and
yet under current law, there are no taxes levied for the purchase or use of
coal.  In contrast, there are currently severance taxes levied on both
natural gas and oil.  Taxes on natural gas and oil have generated a
significant amount of revenue for the general revenue fund, and it is
estimated that coal would generate an even larger amount of revenue for
this fund.  Levying a tax on coal may help to counterbalance the decreasing
revenue being collected from taxes on oil and natural gas in recent years
and may encourage the use of more Texas based energy sources such as
natural gas.  House Bill 2901 imposes a tax on the purchase and use of coal
in this state, revenue from which is to be deposited to the credit of the
general revenue fund.       

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. 

ANALYSIS

House Bill 2901 amends the Tax Code to provide that a tax is imposed on the
purchase and use of coal at a rate of 7.5 percent of the total price paid
for the coal.  The bill authorizes a person to deduct from the amount of
tax otherwise imposed on the use of coal the amount of tax reported and
paid for the purchase of coal.  H.B. 2901 requires a person on whom such a
tax is imposed, on or before the 25th day of each month, to send to the
comptroller of public accounts (comptroller) the amount of tax due for the
preceding month and a report stating the amount of coal purchased for use
in this state and used in this state during the preceding month, the total
price of that coal, and any other required information.  The bill requires
a person to keep a complete record of any information required by the
comptroller, including the amount of coal purchased by the person for use
in this state and the use of coal in this state by the person.  H.B. 2901
sets forth provisions relating to penalties and interest on a delinquent
tax paid or failure to file the required report and provides that a person
commits a Class C misdemeanor offense if the person violates these
provisions.  The bill requires all of the revenue from a coal tax imposed
by these provisions to be deposited to the credit of the general revenue
fund.          

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.