| 1 | 1 | | 84R8188 ADM-F |
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| 2 | 2 | | By: Rodriguez of Travis H.B. No. 2500 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a franchise tax deduction for certain energy-generating |
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| 8 | 8 | | equipment. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter C, Chapter 171, Tax Code, is amended |
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| 11 | 11 | | by adding Section 171.110 to read as follows: |
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| 12 | 12 | | Sec. 171.110. DEDUCTION OF COST OF COMBINED HEAT AND POWER |
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| 13 | 13 | | PROJECT FROM MARGIN APPORTIONED TO THIS STATE. (a) In this |
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| 14 | 14 | | section, "combined heat and power project" means the construction |
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| 15 | 15 | | or installation of one or more components of a system that is |
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| 16 | 16 | | designed to: |
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| 17 | 17 | | (1) provide the sequential generation of power and |
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| 18 | 18 | | thermal energy for a facility and have an overall efficiency of |
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| 19 | 19 | | energy that exceeds 60 percent; |
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| 20 | 20 | | (2) store thermal energy; or |
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| 21 | 21 | | (3) capture waste heat to generate electricity. |
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| 22 | 22 | | (b) A taxable entity may deduct from its apportioned margin |
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| 23 | 23 | | 10 percent of the amortized cost of equipment: |
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| 24 | 24 | | (1) that is used in a combined heat and power project; |
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| 25 | 25 | | (2) that is acquired by the taxable entity for use in |
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| 26 | 26 | | sequential generation of power and thermal energy, storage of |
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| 27 | 27 | | thermal energy, or capture of waste heat for generation of |
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| 28 | 28 | | electricity; |
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| 29 | 29 | | (3) that the taxable entity uses in this state; and |
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| 30 | 30 | | (4) the cost of which is amortized in accordance with |
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| 31 | 31 | | Subsection (c). |
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| 32 | 32 | | (c) The amortization of the cost of capital used in a |
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| 33 | 33 | | combined heat and power project must: |
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| 34 | 34 | | (1) be for a period of at least 60 months; |
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| 35 | 35 | | (2) provide for equal monthly amounts; |
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| 36 | 36 | | (3) begin in the month during which the equipment is |
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| 37 | 37 | | placed in service in this state; and |
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| 38 | 38 | | (4) cover only a period during which the equipment is |
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| 39 | 39 | | used in this state. |
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| 40 | 40 | | (d) A taxable entity that makes a deduction under this |
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| 41 | 41 | | section shall file with the comptroller an amortization schedule |
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| 42 | 42 | | showing the period for which the deduction is to be made. On the |
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| 43 | 43 | | request of the comptroller, the taxable entity shall file with the |
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| 44 | 44 | | comptroller proof of the cost of the equipment or proof of the |
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| 45 | 45 | | equipment's operation in this state. |
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| 46 | 46 | | SECTION 2. This Act applies only to a report originally due |
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| 47 | 47 | | on or after the effective date of this Act. |
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| 48 | 48 | | SECTION 3. This Act takes effect January 1, 2016. |
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