Texas 2017 - 85th Regular

Texas House Bill HB1614 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R2997 BEF-F
2	2	By: Parker H.B. No. 1614
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a franchise tax credit for enterprise projects for
8	8	certain capital investments.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 171, Tax Code, is amended by adding
11	11	Subchapter U to read as follows:
12	12	SUBCHAPTER U. TAX CREDITS FOR ENTERPRISE PROJECTS FOR CERTAIN
13	13	CAPITAL INVESTMENTS
14	14	Sec. 171.9221. DEFINITIONS. In this subchapter:
15	15	(1) "Enterprise project" means a person designated as
16	16	an enterprise project under Chapter 2303, Government Code, on or
17	17	after September 1, 2003.
18	18	(2) "Qualified business" has the meaning assigned by
19	19	Section 2303.003, Government Code.
20	20	(3) "Qualified capital investment" means tangible
21	21	personal property first placed in service by an enterprise project
22	22	after January 1, 2013, that is described in Section 1245(a),
23	23	Internal Revenue Code, such as engines, machinery, tools, and
24	24	implements used in a trade or business or held for investment and
25	25	subject to an allowance for depreciation, cost recovery under the
26	26	accelerated cost recovery system, or amortization. The term does
27	27	not include real property or buildings and their structural
28	28	components. Property that is leased under a capitalized lease is
29	29	considered a qualified capital investment, but property that is
30	30	leased under an operating lease is not considered a qualified
31	31	capital investment. Property expensed under Section 179, Internal
32	32	Revenue Code, is not considered a qualified capital investment.
33	33	Sec. 171.9222. TANGIBLE PERSONAL PROPERTY FIRST PLACED IN
34	34	SERVICE BY AN ENTERPRISE PROJECT. For purposes of determining
35	35	whether an investment is a qualified capital investment under
36	36	Section 171.9221, "tangible personal property first placed in
37	37	service by an enterprise project" includes tangible personal
38	38	property:
39	39	(1) purchased by an enterprise project for placement
40	40	in an incomplete improvement that is under active construction or
41	41	other physical preparation;
42	42	(2) identified by a purchase order, invoice, billing,
43	43	sales slip, or contract; and
44	44	(3) physically present at the enterprise project's
45	45	qualified business site, as defined by Section 2303.003, Government
46	46	Code, and in use by the enterprise project on the original due date
47	47	of the report on which the credit is taken.
48	48	Sec. 171.9223. ELIGIBILITY. An enterprise project that is
49	49	a qualified business is eligible for a credit against the tax
50	50	imposed under this chapter in the amount and under the conditions
51	51	and limitations provided by this subchapter.
52	52	Sec. 171.9224. CALCULATION OF CREDIT. (a) An enterprise
53	53	project that is eligible for a credit under this subchapter may,
54	54	beginning on January 1 of the year in which the project is
55	55	designated or January 1, 2013, establish a credit equal to 7.5
56	56	percent of the qualified capital investment.
57	57	(b) A taxable entity may file an amended report to claim all
58	58	or part of a credit earned in a previous tax year that has not been
59	59	claimed on another report, subject to Section 171.9225, if the
60	60	applicable period of limitation under Section 111.107 and
61	61	Subchapter D, Chapter 111, for claiming that credit has not
62	62	expired.
63	63	Sec. 171.9225. LIMITATION. The total credit claimed under
64	64	this subchapter for a report, including the amount of any
65	65	carryforward credit under Section 171.9226, may not exceed 50
66	66	percent of the amount of franchise tax due for the report before any
67	67	other applicable tax credits.
68	68	Sec. 171.9226. CARRYFORWARD. (a) If an enterprise project
69	69	is eligible for a credit from an installment that exceeds a
70	70	limitation under Section 171.9225, the enterprise project may carry
71	71	the unused credit forward for not more than five consecutive
72	72	reports.
73	73	(b) A carryforward is considered the remaining portion of an
74	74	installment that cannot be claimed in the current year because of a
75	75	tax limitation under Section 171.9225. A carryforward is added to
76	76	the next year's installment of the credit in determining the tax
77	77	limitation for that year. A credit carryforward from a previous
78	78	report is considered to be used before the current year
79	79	installment.
80	80	Sec. 171.9227. CERTIFICATION OF ELIGIBILITY. (a) For the
81	81	initial and each succeeding report in which a credit is claimed
82	82	under this subchapter, the enterprise project shall file with its
83	83	report, on a form provided by the comptroller, information that
84	84	sufficiently demonstrates that the enterprise project is eligible
85	85	for the credit.
86	86	(b) The burden of establishing entitlement to and the value
87	87	of the credit is on the enterprise project.
88	88	Sec. 171.9228. BIENNIAL REPORT BY COMPTROLLER. (a) Before
89	89	the beginning of each regular session of the legislature, the
90	90	comptroller shall submit to the governor, the lieutenant governor,
91	91	and the speaker of the house of representatives a report that
92	92	states:
93	93	(1) the total amount of qualified capital investments
94	94	made by enterprise projects that claim a credit under this
95	95	subchapter and the average and median wages paid by those
96	96	enterprise projects;
97	97	(2) the total amount of credits applied against the
98	98	tax under this chapter and the amount of unused credits, including:
99	99	(A) the total amount of franchise tax due by
100	100	enterprise projects claiming a credit under this subchapter before
101	101	and after the application of the credit;
102	102	(B) the average percentage reduction in
103	103	franchise tax due by enterprise projects claiming a credit under
104	104	this subchapter;
105	105	(C) the percentage of tax credits that were
106	106	awarded to enterprise projects with fewer than 100 employees; and
107	107	(D) the two-digit standard industrial
108	108	classification of enterprise projects claiming a credit under this
109	109	subchapter;
110	110	(3) the geographical distribution of the qualified
111	111	capital investments on which tax credit claims are made under this
112	112	subchapter; and
113	113	(4) the impact of the credit provided under this
114	114	subchapter on employment, capital investment, personal income, and
115	115	state tax revenues.
116	116	(b) The comptroller may not include in the report
117	117	information that is confidential by law.
118	118	(c) For purposes of this section, the comptroller may
119	119	require an enterprise project that claims a credit under this
120	120	subchapter to submit information, on a form provided by the
121	121	comptroller, on the location of the enterprise project's capital
122	122	investment in this state and any other information necessary to
123	123	complete the report required under this section.
124	124	(d) The comptroller shall provide notice to the members of
125	125	the legislature that the report required under this section is
126	126	available on request.
127	127	Sec. 171.9229. COMPTROLLER POWERS AND DUTIES. The
128	128	comptroller shall adopt rules and forms necessary to implement this
129	129	subchapter.
130	130	SECTION 2. Except as provided by Section 171.9224(b), Tax
131	131	Code, as added by this Act, this Act applies only to a report
132	132	originally due on or after the effective date of this Act.
133	133	SECTION 3. This Act takes effect immediately if it receives
134	134	a vote of two-thirds of all the members elected to each house, as
135	135	provided by Section 39, Article III, Texas Constitution. If this
136	136	Act does not receive the vote necessary for immediate effect, this
137	137	Act takes effect September 1, 2017.