Texas House Bill HB2500

Texas 2015 - 84th Regular

Caption

Relating to a franchise tax deduction for certain energy-generating equipment.

Impact

The enactment of HB 2500 is expected to positively influence the energy sector in Texas by fostering the adoption of combined heat and power systems. By providing financial relief through tax deductions, the bill intends to lower operational costs for businesses investing in such energy-efficient technology. This move not only aims to reduce greenhouse gas emissions from traditional energy sources but also bolsters local energy resilience by promoting the efficient use of resources.

Summary

House Bill 2500 aims to enhance energy efficiency within the state by providing a franchise tax deduction for certain energy-generating equipment, specifically those used in combined heat and power projects. The bill introduces new legislation under Chapter 171 of the Tax Code, allowing taxable entities to deduct 10% of the amortized cost of equipment utilized for generating power and thermal energy. This provision is designed to incentivize the development and installation of energy-efficient technologies that exceed a system efficiency threshold of 60%.

Contention

Notable points of contention surrounding HB 2500 relate to its potential budgetary impact on state revenue generated from franchise taxes. Critics may argue that while promoting energy efficiency is beneficial, the tax deduction could result in significant revenue loss for the state, especially if a large number of businesses take advantage of the benefit. Additionally, concerns may arise regarding the criteria for what constitutes eligible energy-generating equipment and whether all facilities will be able to meet the efficiency standards set forth in the bill.