Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter O - STATE AND LOCAL SALES AND USE TAXES › Section 3.362 - Labor Relating to Increasing Capacity in a Production Unit in a Petrochemical Refinery or Chemical Plant

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Definitions. The following words and terms, when used in this section, shall
				  have the following meanings, unless the context clearly indicates otherwise.
(1) Allied chemical product--A consumer or
				  end-user product manufactured from basic or intermediate chemicals. Examples
				  include drugs, soaps, detergents, paints and agricultural chemical
				  formulations.
(2) Basic or
				  intermediate chemical--Basic chemicals are the initial building blocks or raw
				  materials that are processed and combined to manufacture intermediate
				  chemicals. Intermediate chemicals are products that are manufactured from basic
				  chemicals and other intermediate chemicals and are manufactured into finished
				  chemical products. Examples of basic chemicals include alkalies, chlorine,
				  nitrogen, sulfur, benzene, ethylene, propylene methane, and sodium carbonate.
				  Examples of intermediate chemicals include synthetic fibers, polymers, resins,
				  elastomers, dyes, and pigments.
(3)
				  Chemical plant--
(A) A facility that in a
				  single continuous operation or using a batch processing method manufactures a
				  basic or an intermediate chemical.
(B) A chemical plant may be either a single
				  facility existing by itself or a facility within a chemical plant complex
				  consisting of a number of separate chemical plants each of which produces a
				  single basic or intermediate chemical product. A chemical plant complex may
				  include any combination of distinct facilities that manufacture basic
				  chemicals, intermediate chemicals, or allied chemical products. In a chemical
				  plant complex, each facility is considered individually to determine whether it
				  qualifies as a chemical plant.
(C)
				  The term does not include:
(i) a facility
				  that manufactures "allied chemical products"; or
(ii) a facility, other than one that produces
				  a basic or an intermediate chemical, that generates any chemical as a waste
				  product or a by-product.
(4) Crude oil--A mixture of hydrocarbons that
				  exists in liquid phase in underground reservoirs and remains liquid at
				  atmospheric pressure after passing through surface-separating facilities. The
				  term includes liquid condensate and liquid hydrocarbons produced from tar
				  sands, gilsonite, and oil shale. Drip gases are also included, but topped crude
				  oil (residual oil) and other unfinished oils are excluded. Liquids produced at
				  natural gas processing plants and mixed with crude oil are likewise excluded
				  where identifiable.
(5) Increased
				  capacity--
(A) Increasing the capability of
				  the manufacturing or processing production unit to produce:
(i) more of the same product measured by
				  units per hour or units per year; or
(ii) a new product.
(B) Increasing a unit's capability to produce
				  more of an existing product and less of another existing product is not
				  increasing the unit's capacity unless the overall production unit capability is
				  increased. For example, if a production unit that produces 50 units of product
				  X and 50 units of product Y is modified so that it produces 60 units of product
				  X and 40 units of product Y, the production unit's capacity has not been
				  increased.
(6)
				  Manufacturing or processing production unit--A group of manufacturing and
				  processing machines and ancillary equipment that together are necessary to
				  create or produce a physical or chemical change beginning with the first
				  processing of the raw material and ending with a finished product. Examples of
				  such equipment include reactors, distillation columns, catalytic crackers,
				  fractionators, or other primary process equipment, and ancillary equipment such
				  as heat exchangers, cooling towers, computer control units, piping, valves, and
				  actuators. Another example of ancillary equipment is quality control equipment
				  that is used during the manufacturing process, but not equipment used to test
				  products before the process begins or after it is completed. The production
				  unit does not include maintenance equipment; research and development
				  laboratory equipment; waste handling or treatment equipment; equipment for the
				  storage of feedstock, catalysts, or finished products; loading and unloading
				  equipment; or any other equipment that is not used in the actual processing or
				  manufacturing operation.
(7) New
				  product--A product that has different product properties and a different
				  commercial application than the product previously manufactured or processed by
				  that production unit. Examples of new products include chlorine produced from
				  sodium chloride; styrene from benzene; aqueous hydrogen chloride (HCl) from
				  anhydrous HCl; and soft polyethylene from hard polyethylene if the soft
				  polyethylene is used to manufacture different end products than the hard
				  polyethylene. Producing gasoline with a 91-octane rating instead of an
				  89-octane rating for use in motor vehicle engines is not producing a new
				  product. Changes caused by straining or purifying an existing product or
				  cosmetic changes such as adding or removing color or odor to or from an
				  existing product will not create a new product. For example, the manufacture of
				  a different grade of the same product, such as technical sulfuric acid which is
				  colored and contains impurities and anhydrous 100% sulfuric acid which is
				  colorless and odorless, does not qualify one as a new or different product from
				  the other.
(8) Petrochemical
				  refinery--A facility that manufactures finished petroleum products from crude
				  oil, unfinished oils, natural gas liquids, other hydrocarbons, and oxygenates.
				  Products of these refineries include gasoline, diesel, kerosene, distillate
				  fuel oils, liquefied petroleum gas (LPG), residual fuel oils, lubricants, and
				  other products refined through alkylation, coking, cracking, dewaxing,
				  desulphurization, distillation, hydrotreating, isomerization, polymerization,
				  or other chemical processes. These facilities also produce petrochemical
				  feedstock for use by chemical plants. The term does not include facilities at
				  an oil or gas lease site that remove water or other impurities and merely make
				  the product more marketable.