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Summary: HB 2684 establishes that political subdivision corporations that negotiate the purchase of electricity for their incorporating subdivisions are exempt from the Franchise Tax. These corporations may negotiate contracts for and purchase energy on behalf of their subdivision(s). These particular political subdivision corporations can charge dues to their incorporating political subdivision(s) or charge aggregation fees based on the amount of energy consumed by their incorporating political subdivision(s), or a combination of both. Currently, these corporations are exempted from taxation by the Comptroller in practice. HB 2486 merely codifies this practice in law.
Analysis: HB 2684 simply codifies a tax policy that is already practiced by the Comptroller. Codifying this existing practice makes the policy more transparent and predictable so that the entities involved can plan for the future without wondering if a future Comptroller may adopt a different practice. We encourage legislators to support HB 2684