Texas 2013 - 83rd Regular

Texas House Bill HB2446 Compare Versions

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1	1	By: Crownover, et al. (Senate Sponsor - Estes) H.B. No. 2446
2	2	(In the Senate - Received from the House May 8, 2013;
3	3	May 9, 2013, read first time and referred to Committee on Natural
4	4	Resources; May 15, 2013, reported favorably by the following vote:
5	5	Yeas 11, Nays 0; May 15, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to the definitions of advanced clean energy projects and
11	11	clean energy projects and to franchise tax credits for certain of
12	12	those projects.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Subchapter H, Chapter 490, Government Code, is
15	15	transferred to Chapter 171, Tax Code, redesignated as Subchapter L,
16	16	Chapter 171, Tax Code, and amended to read as follows:
17	17	SUBCHAPTER L. [H. FRANCHISE] TAX CREDIT FOR CLEAN ENERGY PROJECT
18	18	Sec. 171.651 [490.351]. DEFINITION. In this subchapter,
19	19	"clean energy project" has the meaning assigned by Section 120.001,
20	20	Natural Resources Code.
21	21	Sec. 171.652. [490.352. FRANCHISE] TAX CREDIT FOR CLEAN
22	22	ENERGY PROJECT. (a) The comptroller shall adopt rules for issuing
23	23	to an entity implementing a clean energy project in this state a
24	24	[franchise tax] credit against the tax imposed under this chapter.
25	25	A clean energy project is eligible for a [franchise tax] credit
26	26	only if the project is implemented in connection with the
27	27	construction of a new facility.
28	28	(b) The comptroller shall issue a [franchise tax] credit to
29	29	an entity operating a clean energy project after:
30	30	(1) the Railroad Commission of Texas has issued a
31	31	certificate of compliance for the project to the entity as provided
32	32	by Section 120.004, Natural Resources Code;
33	33	(2) the construction of the project has been
34	34	completed;
35	35	(3) the electric generating facility associated with
36	36	the project is fully operational;
37	37	(4) the Bureau of Economic Geology of The University
38	38	of Texas at Austin verifies to the comptroller that the electric
39	39	generating facility associated with the project is sequestering at
40	40	least 70 percent of the carbon dioxide resulting from or associated
41	41	with the generation of electricity by the facility; and
42	42	(5) the owner or operator of the project has entered
43	43	into an interconnection agreement relating to the project with the
44	44	Electric Reliability Council of Texas.
45	45	(c) The total amount of the [franchise tax] credit that may
46	46	be issued to the entity designated in the certificate of compliance
47	47	for a clean energy project is equal to the lesser of:
48	48	(1) 10 percent of the total capital cost of the
49	49	project, including the cost of designing, engineering, permitting,
50	50	constructing, and commissioning the project, the cost of procuring
51	51	land, water, and equipment for the project, and all fees, taxes, and
52	52	commissions paid and other payments made in connection with the
53	53	project but excluding the cost of financing the capital cost of the
54	54	project; or
55	55	(2) $100 million.
56	56	(d) [The amount of the franchise tax credit for each report
57	57	year is calculated by determining the amount of franchise tax that
58	58	is due based on the taxable margin generated by a clean energy
59	59	project from the generation and sale of power and the sale of any
60	60	products that are produced by the electric generation facility.]
61	61	The total [amount of the franchise tax] credit that a taxable entity
62	62	may claim [claimed] under this section for a report, including the
63	63	amount of any carryforward credit, [year] may not exceed the amount
64	64	of franchise tax due by the taxable entity for the report after any
65	65	applicable tax credits [attributable to the clean energy project
66	66	for that report year]. If a taxable entity is eligible to claim a
67	67	credit that exceeds the limitation of this subsection, the taxable
68	68	entity may carry the unused credit forward for not more than 20
69	69	consecutive reports. A carryforward is considered the remaining
70	70	portion of the credit that the taxable entity does not claim in the
71	71	current year because of the limitation.
72	72	(e) The entity designated in the certificate of compliance
73	73	for a clean energy project may assign the credit to one or more
74	74	taxable entities. A taxable entity to which the credit is assigned
75	75	may claim the credit against the tax imposed under this chapter
76	76	subject to the conditions and limitations of this subchapter.
77	77	(f) The comptroller may not issue a [franchise tax] credit
78	78	under this section before the later of:
79	79	(1) September 1, 2018; or
80	80	(2) the expiration of an agreement under Chapter 313
81	81	regarding the clean energy project for which the credit is issued
82	82	[2013. This subsection expires September 2, 2013].
83	83	SECTION 2. Section 382.003(1-a), Health and Safety Code, is
84	84	amended to read as follows:
85	85	(1-a) "Advanced clean energy project" means a project
86	86	for which an application for a permit or for an authorization to use
87	87	a standard permit under this chapter is received by the commission
88	88	on or after January 1, 2008, and before January 1, 2020, and that:
89	89	(A) involves the use of coal, biomass, petroleum
90	90	coke, solid waste, natural gas, or fuel cells using hydrogen
91	91	derived from such fuels, in the generation of electricity, or the
92	92	creation of liquid fuels outside of the existing fuel production
93	93	infrastructure while co-generating electricity, whether the
94	94	project is implemented in connection with the construction of a new
95	95	facility or in connection with the modification of an existing
96	96	facility and whether the project involves the entire emissions
97	97	stream from the facility or only a portion of the emissions stream
98	98	from the facility;
99	99	(B) with regard to the portion of the emissions
100	100	stream from the facility that is associated with the project, is
101	101	capable of achieving:
102	102	(i) on an annual basis:
103	103	(a) a 99 percent or greater reduction
104	104	of sulfur dioxide emissions;
105	105	(b) [or,] if the project is designed
106	106	for the use of feedstock, substantially all of which is
107	107	subbituminous coal, an emission rate of 0.04 pounds or less of
108	108	sulfur dioxide per million British thermal units as determined by a
109	109	30-day average; or
110	110	(c) if the project is designed for the
111	111	use of one or more combustion turbines that burn natural gas, a
112	112	sulfur dioxide emission rate that meets best available control
113	113	technology requirements as determined by the commission;
114	114	(ii) on an annual basis:
115	115	(a) a 95 percent or greater reduction
116	116	of mercury emissions; or
117	117	(b) if the project is designed for the
118	118	use of one or more combustion turbines that burn natural gas, a
119	119	mercury emission rate that complies with applicable federal
120	120	requirements;
121	121	(iii) an annual average emission rate for
122	122	nitrogen oxides of:
123	123	(a) 0.05 pounds or less per million
124	124	British thermal units; [or]
125	125	(b) if the project uses gasification
126	126	technology, 0.034 pounds or less per million British thermal units;
127	127	or
128	128	(c) if the project is designed for the
129	129	use of one or more combustion turbines that burn natural gas, two
130	130	parts per million by volume; and
131	131	(iv) an annual average emission rate for
132	132	filterable particulate matter of 0.015 pounds or less per million
133	133	British thermal units; and
134	134	(C) captures not less than 50 percent of the
135	135	carbon dioxide in the portion of the emissions stream from the
136	136	facility that is associated with the project and sequesters that
137	137	captured carbon dioxide by geologic storage or other means.
138	138	SECTION 3. Section 120.001(2), Natural Resources Code, is
139	139	amended to read as follows:
140	140	(2) "Clean energy project" means a project to
141	141	construct a coal-fueled, natural gas-fueled, or petroleum
142	142	coke-fueled electric generating facility, including a facility in
143	143	which the fuel is gasified before combustion, that will:
144	144	(A) have a capacity of at least 200 megawatts;
145	145	(B) meet the emissions profile for an advanced
146	146	clean energy project under Section 382.003(1-a)(B), Health and
147	147	Safety Code;
148	148	(C) capture at least 70 percent of the carbon
149	149	dioxide resulting from or associated with the generation of
150	150	electricity by the facility;
151	151	(D) be capable of permanently sequestering in a
152	152	geological formation the carbon dioxide captured; and
153	153	(E) be capable of supplying the carbon dioxide
154	154	captured for purposes of an enhanced oil recovery project.
155	155	SECTION 4. Section 120.002(b), Natural Resources Code, is
156	156	amended to read as follows:
157	157	(b) An entity may apply to the commission for a
158	158	certification that a project operated by the entity meets the
159	159	requirements for a clean energy project. An entity may not submit
160	160	an application under this section before September 1, 2018. The
161	161	application must be accompanied by:
162	162	(1) a certificate from a qualified independent
163	163	engineer that the project is operational and meets the standards
164	164	provided by Sections 120.001(2)(A), (B), and (C); and
165	165	(2) a fee payable to the commission.
166	166	SECTION 5. Section 120.003(a), Natural Resources Code, is
167	167	amended to read as follows:
168	168	(a) An entity that applies to the commission under Section
169	169	120.002 for a certification that a project operated by the entity
170	170	meets the requirements for a clean energy project is responsible
171	171	for conducting a monitoring, measuring, and verification process
172	172	that demonstrates that the project complies with the requirements
173	173	of Section 171.652(b)(4), Tax [490.352(b)(4), Government] Code.
174	174	SECTION 6. Section 120.004(b), Natural Resources Code, is
175	175	amended to read as follows:
176	176	(b) The commission may not issue a certificate of compliance
177	177	for more than three clean energy projects. Not more than one of the
178	178	clean energy projects may be a natural gas project.
179	179	SECTION 7. Not later than January 1, 2014, the comptroller
180	180	of public accounts shall adopt rules necessary to implement
181	181	Subchapter L, Chapter 171, Tax Code, as redesignated and amended by
182	182	this Act.
183	183	SECTION 8. Not later than January 1, 2014, the Texas
184	184	Commission on Environmental Quality shall adopt rules as necessary
185	185	to implement the change in law made by this Act to Section 382.003,
186	186	Health and Safety Code.
187	187	SECTION 9. The Railroad Commission of Texas may adopt rules
188	188	as necessary to implement the change in law made by this Act to
189	189	Section 120.001, Natural Resources Code.
190	190	SECTION 10. The changes in law made by this Act do not apply
191	191	to a clean energy project that includes a precombustion integrated
192	192	gasification combined cycle technology with carbon capture and was
193	193	selected by the United States Department of Energy for a Clean Coal
194	194	Power Initiative award before February 1, 2010. A clean energy
195	195	project that includes a precombustion integrated gasification
196	196	combined cycle technology with carbon capture and was selected by
197	197	the United States Department of Energy for a Clean Coal Power
198	198	Initiative award before February 1, 2010, is governed by the law in
199	199	effect immediately before the effective date of this Act, and the
200	200	former law is continued in effect for that purpose.
201	201	SECTION 11. This Act takes effect immediately if it
202	202	receives a vote of two-thirds of all the members elected to each
203	203	house, as provided by Section 39, Article III, Texas Constitution.
204	204	If this Act does not receive the vote necessary for immediate
205	205	effect, this Act takes effect September 1, 2013.
206	206	* * * * *