By: Estes S.B. No. 1468
A BILL TO BE ENTITLED
AN ACT
relating to the qualifications of certain electric generation
projects for programs designed to encourage the capture and
utilization of carbon dioxide for use in enhanced oil recovery.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 382.003(1-a), Health and Safety Code, is
amended to read as follows:
(1-a) "Advanced clean energy project" means a project
for which an application for a permit or for an authorization to use
a standard permit under this chapter is received by the commission
on or after January 1, 2008, and before January 1, 2020, and that:
(A) involves the use of coal, biomass, petroleum
coke, solid waste, or fuel cells using hydrogen derived from such
fuels, in the generation of electricity, or the creation of liquid
fuels outside of the existing fuel production infrastructure while
co-generating electricity, whether the project is implemented in
connection with the construction of a new facility or in connection
with the modification of an existing facility and whether the
project involves the entire emissions stream from the facility or
only a portion of the emissions stream from the facility;
(B) with regard to the portion of the emissions
stream from the facility that is associated with the project, is
capable of achieving:
(i) on an annual basis, a 99 percent or
greater reduction of sulfur dioxide emissions, or:
(a) if the project is designed for the
use of one or more combustion turbines, an emission rate that meets
best available control technology requirements as determined by the
commission; or
(b) if the project is designed for the
use of feedstock substantially all of which is subbituminous coal,
an emission rate of 0.04 pounds or less of sulfur dioxide per
million British thermal units as determined by a 30-day average;;
(ii) on an annual basis, a 95 percent or
greater reduction of mercury emissions, if applicable;
(iii) an annual average emission rate for
nitrogen oxides of:
(a) 0.05 pounds or less per million
British thermal units; or
(b) if the project uses gasification
technology, 0.034 pounds or less per million British thermal units;
and
(iv) an annual average emission rate for
filterable particulate matter of 0.015 pounds or less per million
British thermal units; and
(C) captures not less than 50 percent of the
carbon dioxide in the portion of the emissions stream from the
facility that is associated with the project and sequesters that
captured carbon dioxide by geologic storage or other means.
SECTION 2. Section 120.001(2), Natural Resources Code, is
amended to read as follows:
(2) "Clean energy project" means a project to
construct an coal-fueled or petroleum coke-fueled electric
generating facility, including a facility in which the fuel is
gasified before combustion, that will:
(A) have a capacity of at least 200 megawatts;
(B) meet the emissions profile for an advanced
clean energy project under Section 382.003(1-a)(B), Health and
Safety Code;
(C) capture at least 70 percent of the carbon
dioxide resulting from or associated with the generation of
electricity by the facility;
(D) be capable of permanently sequestering in a
geological formation the carbon dioxide captured; and
(E) be capable of supplying the carbon dioxide
captured for purposes of an enhanced oil recovery project.
SECTION 3. Subchapter H, Chapter 490, Government Code,
section 490.352 is amended to read as follows:
Sec. 490.352. FRANCHISE TAX CREDIT FOR CLEAN ENERGY
PROJECT. (a) The comptroller shall adopt rules for issuing to an
entity implementing a clean energy project in this state a
franchise tax credit. A clean energy project is eligible for a
franchise tax credit only if the project is implemented in
connection with the construction of a new facility.
(b) The comptroller shall issue a franchise tax credit to an
entity operating a clean energy project after:
(1) the Railroad Commission of Texas has issued a
certificate of compliance for the project to the entity as provided
by Section 120.004, Natural Resources Code;
(2) the construction of the project has been
completed;
(3) the electric generating facility associated with
the project is fully operational;
(4) the Bureau of Economic Geology of The University
of Texas at Austin verifies to the comptroller that the electric
generating facility associated with the project is sequestering at
least 70 percent of the carbon dioxide resulting from or associated
with the generation of electricity by the facility; and
(5) the owner or operator of the project has entered
into an interconnection agreement relating to the project with the
Electric Reliability Council of Texas.
(c) The total amount of the franchise tax credit that may be
issued to the entity designated in the certificate of compliance
for a clean energy project is equal to the lesser of:
(1) 10 percent of the total capital cost of the
project, including the cost of designing, engineering, permitting,
constructing, and commissioning the project, the cost of procuring
land, water, and equipment for the project, and all fees, taxes, and
commissions paid and other payments made in connection with the
project but excluding the cost of financing the capital cost of the
project; or
(2) $100 million.
(d) The entity designated in the certificate of compliance
for the project may assign the franchise tax credit to any other
entity that has or acquires an interest in the income generated by
the project in proportion to their ownership in the project. The
amount of the franchise tax credit for each report year is
calculated by determining the amount of franchise tax that is due
based on the taxable margin generated by a clean energy project from
the generation and sale of power and the sale of any products that
are produced by the electric generation facility. The amount of the
franchise tax credit claimed under this section for a report year
may not exceed the amount of franchise tax due to the state from an
entity claiming the credit. attributable to the clean energy
project for that report year. Any unused credit may be carried
forward for up to 20 years.
(e) The comptroller may not issue a franchise tax credit
under this section before September 1, 20183 or while a valuation
cap agreement under Chapter 313, Tax Code is in effect for the
project. This subsection expires September 2, 2013.
SECTION 4. The Texas Commission on Environmental Quality
shall adopt rules as necessary to implement Section 382.003, Health
and Safety Code, as amended by this Act, not later than January 1,
2014.
SECTION 5. The Railroad Commission of Texas may adopt rules
as necessary to implement section 120.001(2), Natural Resources
Code, as amended by this Act.
SECTION 6. The comptroller shall adopt rules under Section
490.352, Government Code, as added by this Act, not later than
January 1, 2014.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2013.