SB963 Summary

• Reduces sales and use tax rates on natural gas and electricity for manufacturers, effective July 1, 2011, with a rate of 2.625% for general manufacturers and 5.125% for electric power generators using combined-cycle gas turbine technology

• Establishes a $27 million annual cap on tax savings; once reached, the Director of Finance and Administration must halt refund processing and may decline amended returns for the fiscal year

• Provides special treatment for electric power generators using natural gas combined-cycle technology with tiered rates declining from 5.125% (2011) to 4.125% (2012) to the standard rate by 2013, excluding them from the $27 million refund cap

• Applies tax reductions only to natural gas and electricity used directly in the manufacturing process; other uses remain subject to full tax rates

• Distributes tax revenues as follows: 76.6% to general revenues, 8.5% to Property Tax Relief Trust Fund, and 14.9% to Educational Adequacy Fund