84R9725 CBH-D
By: Parker H.B. No. 3458
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for recycling of oil and gas
drill cuttings.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter N to read as follows:
SUBCHAPTER N. TAX CREDIT FOR RECYCLING OIL AND GAS DRILL CUTTINGS
Sec. 171.701. DEFINITION. In this subchapter, "oil and gas
drill cuttings" means the soil, rock fragments, and pulverized
material that are removed from a borehole as a result of a drilling
process.
Sec. 171.702. 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 taxes imposed
by this chapter.
Sec. 171.703. QUALIFICATION. A taxable entity is entitled
to a credit under this subchapter if the taxable entity recycles oil
and gas drill cuttings.
Sec. 171.704. AMOUNT; LIMITATIONS. (a) The amount of the
credit is equal to 50 percent of the amount paid by the taxable
entity for energy consumed in connection with the recycling of oil
and gas drill cuttings.
(b) The credit claimed for each reporting period may not
exceed the amount of franchise tax due, after any other applicable
tax credits, for the period.
Sec. 171.705. CARRYFORWARD. (a) If a taxable entity is
eligible for a credit that exceeds the limitation under Section
171.704(b), the taxable entity may carry the unused credit forward
for not more than five consecutive reports.
(b) A carryforward is considered the remaining portion of a
credit that cannot be claimed in the current year because of the
limitation under Section 171.704(b).
Sec. 171.706. SALE OR ASSIGNMENT OF CREDIT. (a) A taxable
entity that has an unused, unexpired credit may sell or assign all
or part of the credit to one or more taxable entities, and any
taxable entity to which all or part of the credit is sold or
assigned may sell or assign all or part of the credit to another
taxable entity. There is no limit on the total number of
transactions for the sale or assignment of all or part of the
credit, however, collectively the claiming of a credit for a
period, including any transferred portion, is subject to the
limitation provided by Section 171.704(b).
(b) A taxable entity that sells or assigns a credit under
this section and the taxable entity to which the credit is sold or
assigned shall jointly submit written notice of the sale or
assignment to the comptroller on a form promulgated by the
comptroller not later than the 30th day after the date of the sale
or assignment. The notice must include:
(1) the date of the sale or assignment;
(2) the amount of the credit sold or assigned;
(3) the names and federal tax identification numbers
of the taxable entity that sold or assigned the credit or part of
the credit and the taxable entity to which the credit or part of the
credit was sold or assigned; and
(4) the amount of the credit owned by the selling or
assigning taxable entity before the sale or assignment, and the
amount the selling or assigning taxable entity retained, if any,
after the sale or assignment.
(c) The sale or assignment of a credit in accordance with
this section does not extend the period for which a credit may be
carried forward and does not increase the total amount of the credit
that may be claimed.
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, 2016.