81R793 CBH-D
By: Ellis S.B. No. 128
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for certain investments made in
relation to sustainable commercial building projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter V to read as follows:
SUBCHAPTER V. TAX CREDIT FOR INVESTMENTS IN SUSTAINABLE COMMERCIAL
BUILDING PROJECTS
Sec. 171.901. DEFINITIONS. In this subchapter:
(1) "Commercial building" means a building that will
be used in connection with a trade or business.
(2) "Commercial building project" means:
(A) the construction of a new commercial
building;
(B) a renovation of an existing commercial
building that:
(i) provides additional square footage;
(ii) changes the functional use of the
building; or
(iii) begins not later than the 180th day
after the date the ownership of the building changes; or
(C) a major renovation of at least 50 percent of
the square footage of a commercial building that involves a change
in at least three of the building's systems, including the
building's envelope, space conditioning, lighting, or water
heating and process.
(3) "Sustainable commercial building project" means a
commercial building project that is designed and implemented so
that the commercial building or the renovated portion of the
commercial building achieves certification under a
high-performance building standard that:
(A) is developed and revised through a
consensus-based process;
(B) provides minimum requirements for energy
use, natural resources use, and indoor air quality;
(C) requires substantiating documentation for
certification;
(D) employs third-party, postconstruction or
postrenovation review and verification for certification; and
(E) is determined by the state energy
conservation office to be nationally recognized in the building
industry.
Sec. 171.902. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions and
limitations provided by this subchapter against the tax imposed
under this chapter.
Sec. 171.903. QUALIFICATION. Except as provided by Section
171.905, a taxable entity qualifies for a credit under this
subchapter only if:
(1) the taxable entity completes a sustainable
commercial building project to construct or renovate a commercial
building in this state that the taxable entity owns or has
contracted to purchase; and
(2) the commercial building or the renovated portion
of the commercial building to which the credit relates receives the
appropriate certification before the original due date of the first
report on which the taxable entity may claim the credit under
Section 171.904(c) or (d).
Sec. 171.904. AMOUNT; LIMITATIONS. (a) The amount of a
credit under this subchapter is equal to 35 percent of an amount
equal to the sum of:
(1) $10 per square foot for the first 10,000 square
feet added or affected by the sustainable commercial building
project;
(2) $5 per square foot for the next 40,000 square feet
added or affected by the sustainable commercial building project;
and
(3) $2 per square foot for any additional square feet
added or affected by the sustainable commercial building project.
(b) In determining the square footage that may be included
under Subsection (a), a taxable entity:
(1) may include:
(A) temperature-conditioned floor areas; and
(B) the ground-level footprint areas of parking
structures or parking structure elements of the building; and
(2) may not include:
(A) exterior square footage under overhangs,
awnings, or canopies; or
(B) walkways or unconditioned plaza areas
beneath a temperature-conditioned portion of the building.
(c) Except as provided by Subsection (d), a taxable entity
must claim a credit under this subchapter over five consecutive
reporting periods beginning with the report based on the period
during which the sustainable commercial building project to which
the credit relates was completed. The amount of the credit a
taxable entity may claim on a report is equal to:
(1) on the first two reports for which the taxable
entity may claim the credit, 35 percent of the total amount of the
credit; and
(2) on the last three reports on which the taxable
entity may claim the credit, 10 percent of the total amount of the
credit.
(d) A taxable entity may claim the entire amount of the
credit on the report based on the period during which the
sustainable commercial building project to which the credit relates
was completed if the sum of the amounts determined under
Subsections (a)(1)-(3) does not exceed $20,000.
(e) The total credit claimed under this subchapter for a
report may not exceed the amount of franchise tax due after any
other applicable credits.
(f) A taxable entity may not carry any unused credit forward
to a subsequent report.
Sec. 171.905. SALE OF TAX CREDIT. (a) An entity that is not
a taxable entity accrues a credit under this subchapter if the
entity completes a sustainable commercial building project to
construct or renovate a commercial building in this state that the
entity owns or has contracted to purchase.
(b) An entity that accrues a credit under this section may
sell the rights to the credit to one or more taxable entities. A
taxable entity must purchase the rights with a lump-sum cash
payment after the date the entity accrues the credit but before the
original due date of the first report on which the taxable entity
may claim the credit under Section 171.904(c) or (d). The total
compensation an entity receives for the rights to a credit must be
at least equal to:
(1) 25.5 percent of the sum of the amounts determined
under Sections 171.904(a)(1)-(3) if the sum is equal to more than
$20,000; or
(2) 30.5 percent of the sum of the amounts determined
under Sections 171.904(a)(1)-(3) if the sum is equal to not more
than $20,000 and each taxable entity purchasing the rights intends
to claim the entire amount of the purchased credit on only one
report.
(c) An entity that sells the rights to an accrued credit to
more than one taxable entity may divide those rights in any manner
the entity believes is appropriate provided that:
(1) the entity sells the rights to the entire credit;
and
(2) the entity receives total compensation for that
credit that is at least equal to the appropriate amount required
under Subsection (b).
Sec. 171.906. CERTIFICATION OF ELIGIBILITY. (a) For the
initial and each succeeding report on which a credit is claimed
under this subchapter, the taxable entity must file with its
report, on a form prescribed by the comptroller, information that
sufficiently demonstrates that the taxable entity is eligible for
the credit. If the taxable entity purchases the rights to a credit
under Section 171.905, the taxable entity must also file
information that sufficiently demonstrates that the entity that
sold the credit was eligible for the credit.
(b) The burden of establishing eligibility for, entitlement
to, and the value of the credit is on the taxable entity.
Sec. 171.907. 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.
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2010.