House Bill 1356

AN ACT TO ENCOURAGE THE UTILIZATION OF SMART GRID SYSTEMS BY ELECTRIC UTILITIES REGULATED BY THE PUBLIC SERVICE COMMISSION; TO REQUIRE THE MISSISSIPPI DEVELOPMENT AUTHORITY TO DEVELOP A PLAN TO PROMOTE MORE EFFICIENT USE OF ELECTRICAL TRANSMISSION AND DISTRIBUTION SYSTEMS; TO REQUIRE GOALS RELATED TO THE PLAN; TO REQUIRE THAT THE PLAN SHALL BE PROVIDED TO THE SPEAKER OF THE HOUSE AND THE LIEUTENANT GOVERNOR; TO AMEND SECTIONS 27-65-107 AND 27-67-7, MISSISSIPPI CODE OF 1972, TO EXEMPT SMART GRID AND SMART METERING TECHNOLOGY PURCHASES FROM SALES AND USE TAXES; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. It shall be the policy of the State of Mississippi to encourage the utilization of smart grid systems by electric utilities regulated by the Public Service Commission. The Mississippi Development Authority, with assistance from the Public Service Commission, shall develop a strategic plan for public and private collaboration to promote more efficient use of current electrical transmission and distribution systems. The plan shall include recommendations for appropriate legislative and administrative policy changes, tax exemptions, tax credits and legislative appropriations. The plan shall also recommend proposals for creating and strengthening public and private partnerships to promote smart grid energy improvements, proposals for federal financial assistance and expenditures for research and development programs.

SECTION 2. The plan shall recommend appropriate goals and incentives to increase the efficiency of energy consumption, to increase the development of demand-side renewable energy systems, to reduce and control the growth rates of electric consumption and to establish peak-demand reduction goals for utilities. The Mississippi Development Authority shall report on options to give utility customers an opportunity to participate in lowering energy consumption during peak demand consumption.

SECTION 3. The finalized strategic plan shall be provided to the Speaker of the House and Lieutenant Governor by December 1, 2011.

SECTION 4. Section 27-65-107, Mississippi Code of 1972, is amended as follows:

27-65-107. The exemptions from the provisions of this chapter which relate to utilities or which are more properly classified as utility exemptions than any other exemption classification of this chapter shall be confined to those persons or property exempted by this section or by provisions of the Constitutions of the United States or the State of Mississippi. No utility exemption as now provided by any other section shall be valid as against the tax herein levied. Any subsequent utility exemption from the tax levied hereunder shall be provided by amendment to this section.

No exemption provided in this section shall apply to taxes levied by Section 27-65-15 or 27-65-21, Mississippi Code of 1972.

The tax levied by this chapter shall not apply to the following:

(a) Sales and rentals of locomotives, rail rolling stock and materials for their repair, locomotive water, when made to a railroad whose rates are fixed by the Interstate Commerce Commission or the Mississippi Public Service Commission.

(b) Rentals of manufacturing machinery to a manufacturer or custom processor where such manufacturer or custom processor is engaged in, and such machinery is used in, the manufacture of containers made from timber or wood for sale. The tax, likewise, shall not apply to replacement or repair parts of such machinery used in such manufacture.

(c) Sales of tangible personal property and services to nonprofit water associations or corporations in which no part of the net earnings inures to the benefit of any private shareholder, group or individual. Only sales of property or services which are ordinary and necessary to the operation of such organizations are exempt from tax.

(d) Wholesale sales of tangible personal property for resale under Section 27-65-19.

(e) From and after July 1, 2003, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale.

(f) Sales of smart grid and smart metering technology by utilities regulated by the Public Service Commission.

SECTION 5. Section 27-67-7, Mississippi Code of 1972, is amended as follows:

27-67-7. The tax levied by this article shall not be collected in the following instances:

(a) On the use, storage or consumption of any tangible personal property or specified digital products if the sale thereof has already been included in the measure of this tax or the tax imposed by Section 27-65-20 or Section 27-65-17, 27-65-19, 27-65-25 or 27-65-26, or has already been included in the measure of a sales tax imposed by another state in which the property or products were sold or use tax imposed by some other state in which the property was used. If the rate of sales or use tax paid another state by the person using the property or products in Mississippi is not equal to or greater than the rate imposed by this article, then the user or purchaser shall apply the difference in these rates to the purchase price or value of the property or products and pay to the commissioner the amount of tax thus computed. Persons using business property or products in this state which has been used by them in other states shall be entitled to a credit for sales and/or use tax paid to other states equal to the aggregate of all such state rates multiplied by the value of the property or products at the time of importation into this state. Persons using business property or products in this state which were acquired from another person who used it in other states shall be entitled to a credit equal to the applicable rate in the state of last prior use multiplied by the value of the property or products at the time of importation into this state. However, credit for use tax paid to another state shall not apply on the purchase price of tangible personal property or specified digital products that have been only stored or warehoused in the other state and the first use of the property or products occurs in Mississippi. Provided further, that credit for sales or use tax paid to another state shall not apply on the purchase price or value of automobiles, trucks, truck-tractors, semitrailers, trailers, boats, travel trailers, motorcycles and all-terrain cycles imported and first used in Mississippi.

Credit for sales or use tax paid to another state as provided in this paragraph (a) shall be evidenced by an invoice clearly and correctly showing the amount of the tax as a separate item, and no credit shall be allowed otherwise.

(b) On the use, storage or consumption of tangible personal property or specified digital products to the extent that sales of similar property or products in Mississippi are either excluded or specifically exempt from sales tax or are taxed at the wholesale rate.

This exemption shall be confined to the use of property or products the sale of which is an itemized exemption in the Mississippi Sales Tax Law, or to use by persons who are listed in the Mississippi Sales Tax Law as being exempt from sales tax.

(c) On the use, storage or consumption of tangible personal property or specified digital products brought into this state by a nonresident for his or her use or enjoyment while temporarily within the state, but not including tangible personal property or specified digital products brought in for use in connection with a business activity. This exemption shall not apply to property or products which remain situated in this state for the repeated use, storage or consumption by out-of-state visitors, or which is acquired by visitors and first used in this state.

(d) On the use of a motor vehicle for which a registration is required by the motor vehicle law, when such motor vehicle was purchased by a natural person for his personal or family use while such person was a bona fide resident of another state and who thereafter became a resident of this state, but not to include a motor vehicle which is transferred by the owner for commercial use or for use by another person within this state.

(e) On the use of personal and household effects by a natural person acquired while the person was a bona fide resident of another state, and who thereafter became a resident of this state.

(f) On the use or rental of motion picture film, video-audio tapes, phonograph records or specified digital products for exhibition either by a person paying Mississippi sales tax on gross income from admissions for the exhibitions or by a person operating a television or radio broadcasting station.

(g) On any vehicle purchased in another state for use outside of this state by a Mississippi citizen serving in the Armed Forces and stationed in another state who elects to license the vehicle in Mississippi.

(h) On the cost or value and on the use, storage and consumption of rail rolling stock and component parts thereof.

(i) On the use, storage or consumption of literature, video tapes, photographic slides or specified digital products used by religious institutions for the propagation of their creeds or for carrying on their customary nonprofit religious activities, and on the use of any tangible personal property or specified digital products purchased and first used in another state by religious institutions for the propagation of their creeds or for carrying on their customary nonprofit religious activities. "Religious institution," for the purpose of this exemption, means any religious institution granted an exemption under 26 USCS Section 501(c)(3). Any exemption under this paragraph obtained by fraud, misstatement or misrepresentation shall be cancelled by the State Tax Commission, and the person committing the fraud, misstatement or misrepresentation shall be liable for prosecution for fraud on the assessment, and, on conviction, shall be fined not less than One Thousand Dollars ($1,000.00), or punished by imprisonment in the State Penitentiary for a term not to exceed five (5) years, or both, within the discretion of the court.

(j) The tax on the cost or value of farm machinery used in the harvesting of agricultural products shall be limited to the ratio of use within this state to the life of the property.

(k) [Repealed]

(l) On the use of machinery and equipment; special tooling such as dies, molds, jigs and similar items treated as special tooling for federal income tax purposes; or repair parts therefor or replacements thereof; or repair services thereon; by a taxpayer other than the manufacturer when the manufacturer still holds title to the items and the items are purchased by the manufacturer as a part of a project as defined in Section 57-75-5(f)(iv)1, Section 57-75-5(f)(xxi) or Section 57-75-5(f)(xxii).

(m) On the use, storage or consumption of utilities purchased by a manufacturer described in Section 27-65-101(x).

(n) On the use, storage or consumption of utilities purchased by an enterprise described in Section 27-65-101(cc).

(o) On the use, storage or consumption of jet aircraft engines that are temporarily located within the State of Mississippi and are brought into the state for research and/or testing purposes at a jet aircraft engine research and testing facility.

(p) On the use, storage or consumption of smart grid and smart metering technology by utilities regulated by the Public Service Commission.

SECTION 6. This act shall take effect and be in force from and after July 1, 2010.