81R11703 CBH-D
By: Homer H.B. No. 2790
A BILL TO BE ENTITLED
AN ACT
relating to franchise tax incentives for recycling.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.1011(p), Tax Code, is amended by
adding Subdivisions (4-c) and (4-d) to read as follows:
(4-c) "Recycled product" has the meaning assigned by
Section 361.421, Health and Safety Code.
(4-d) "Solid waste" has the meaning assigned by
Section 361.003, Health and Safety Code.
SECTION 2. Section 171.1011, Tax Code, is amended by adding
Subsection (x) to read as follows:
(x) A taxable entity may exclude, to the extent included
under Subsection (c)(1)(A), (c)(2)(A), or (c)(3), all revenue
received from sales of recycled products manufactured by the
taxable entity. A taxable entity is entitled to exclude revenue
received from the sale of recycled products under this subsection
only if:
(1) the taxable entity is not primarily engaged in the
business of manufacturing and selling recycled products; and
(2) the taxable entity demonstrates to the comptroller
that the recycled products were manufactured using waste that the
taxable entity would otherwise have disposed of as solid waste.
SECTION 3. Subchapter C, Chapter 171, Tax Code, is amended
by adding Section 171.1045 to read as follows:
Sec. 171.1045. GROSS RECEIPTS: DEDUCTION FOR RECYCLED
PRODUCTS. (a) In this section:
(1) "Recycled product" has the meaning assigned by
Section 361.421, Health and Safety Code.
(2) "Solid waste" has the meaning assigned by Section
361.003, Health and Safety Code.
(b) A taxable entity may exclude from its receipts
includable under Sections 171.103(a)(1) and 171.105(a)(1) the
amount of the taxable entity's receipts from sales of recycled
products manufactured by the taxable entity. A taxable entity that
chooses to exclude receipts as provided by this section shall
exclude those receipts from each computation of gross receipts
required by this chapter.
(c) A taxable entity is entitled to exclude receipts under
this section only if:
(1) the taxable entity is not primarily engaged in the
business of manufacturing and selling recycled products; and
(2) the taxable entity demonstrates to the comptroller
that the recycled products were manufactured using waste that the
taxable entity would otherwise have disposed of as solid waste.
SECTION 4. Chapter 171, Tax Code, is amended by adding
Subchapter W to read as follows:
SUBCHAPTER W. TAX CREDIT FOR CAPITAL EXPENDITURES FOR CERTAIN
RECYCLING EQUIPMENT
Sec. 171.951. DEFINITIONS. In this subchapter:
(1) "Recycling equipment" means equipment necessary
to assist a taxable entity in recycling waste and used
predominantly for that purpose.
(2) "Solid waste" has the meaning assigned by Section
361.003, Health and Safety Code.
Sec. 171.952. ELIGIBILITY. A taxable entity is eligible for
a credit against the tax imposed under this chapter in the amount
and under the conditions and limitations provided by this
subchapter.
Sec. 171.953. CREDIT FOR CAPITAL EXPENDITURE FOR RECYCLING
EQUIPMENT. (a) A taxable entity may claim a credit under this
subchapter only for a capital expenditure made toward purchasing
recycling equipment.
(b) A taxable entity is entitled to a credit under this
section only if:
(1) the taxable entity is not primarily engaged in the
business of manufacturing and selling recycled products; and
(2) the taxable entity demonstrates to the comptroller
that the recycling equipment was used to recycle waste that the
taxable entity would otherwise have disposed of as solid waste.
Sec. 171.954. AMOUNTS; LIMITATIONS. (a) The amount of the
credit is equal to the lesser of:
(1) the total amount of the capital expenditure made
during the reporting period; or
(2) $50,000.
(b) The taxable entity may claim the credit only in five
equal installments of one-fifth the credit amount over five
consecutive reports beginning with the report based on the period
during which the capital expenditure was made.
Sec. 171.955. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
(b) The comptroller shall adopt a form for the application
for the credit. A taxable entity must use this form in applying for
the credit.
Sec. 171.956. ASSIGNMENT PROHIBITED. A taxable entity may
not convey, assign, or transfer the credit allowed under this
subchapter to another entity unless all of the assets of the taxable
entity are conveyed, assigned, or transferred in the same
transaction.
SECTION 5. (a) This Act applies only to a report
originally due on or after the effective date of this Act.
(b) A taxable entity may claim a credit under Subchapter W,
Chapter 171, Tax Code, as added by this Act, only for an expenditure
made on or after the effective date of this Act.
SECTION 6. This Act takes effect January 1, 2010.