Texas 2023 - 88th Regular

Texas House Bill HB4724 Compare Versions

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1	1	By: Morrison H.B. No. 4724
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the franchise tax credit for certain clean energy
7	7	projects.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 120.001(2), Natural Resources Code, is
10	10	amended to read as follows:
11	11	(2) "Clean energy project" means a project that:
12	12	(A) uses storage technology for the primary
13	13	purpose of capturing, storing, sequestering, using, or reusing
14	14	carbon dioxide emissions to prevent carbon dioxide from entering
15	15	the atmosphere; and
16	16	(B) is constructed as part of, or is located
17	17	adjacent to, a power generation facility, including a coal-fired
18	18	generation facility, natural gas-fired power system,
19	19	hydrogen-powered facility, or ammonia-powered system [to construct
20	20	a coal-fueled, natural gas-fueled, or petroleum coke-fueled
21	21	electric generating facility, including a facility in which the
22	22	fuel is gasified before combustion, that will:
23	23	[(A) have a capacity of at least 200 megawatts;
24	24	[(B) meet the emissions profile for an advanced
25	25	clean energy project under Section 382.003(1-a)(B), Health and
26	26	Safety Code;
27	27	[(C) capture at least 70 percent of the carbon
28	28	dioxide resulting from or associated with the generation of
29	29	electricity by the facility;
30	30	[(D) be capable of permanently sequestering in a
31	31	geological formation the carbon dioxide captured; and
32	32	[(E) be capable of supplying the carbon dioxide
33	33	captured for purposes of an enhanced oil recovery project].
34	34	SECTION 2. Section 120.002(b), Natural Resources Code, is
35	35	amended to read as follows:
36	36	(b) An entity may apply to the commission for a
37	37	certification that a project operated by the entity meets the
38	38	requirements for a clean energy project. [An entity may not submit
39	39	an application under this section before September 1, 2018.] The
40	40	application must be accompanied by[:
41	41	[(1)] a certificate from a qualified independent
42	42	engineer that the project is operational and meets the standards
43	43	provided by Section 120.001(2) [Sections 120.001(2)(A), (B), and
44	44	(C); and
45	45	[(2) a fee payable to the commission].
46	46	SECTION 3. Section 120.003(b), Natural Resources Code, is
47	47	amended to read as follows:
48	48	(b) The Texas Commission on Environmental Quality [entity]
49	49	shall [contract with the bureau for the bureau to]:
50	50	(1) design initial protocols and standards for the
51	51	process described by Subsection (a);
52	52	(2) review the conduct of the process described by
53	53	Subsection (a) in order to make any necessary changes in the design
54	54	of the protocols and standards;
55	55	(3) evaluate the results of the process described by
56	56	Subsection (a);
57	57	(4) provide an evaluation of the results of the
58	58	process described by Subsection (a) to the commission; and
59	59	(5) determine whether to transmit to the comptroller
60	60	the verification described by Section 171.602(b)(4), Tax Code.
61	61	SECTION 4. Section 171.602, Tax Code, is amended by
62	62	amending Subsections (a), (b), (c), and (f) and adding Subsections
63	63	(c-1) and (c-2) to read as follows:
64	64	(a) The comptroller shall adopt rules for issuing to an
65	65	entity implementing a clean energy project in this state a credit
66	66	against the tax imposed under this chapter. [A clean energy project
67	67	is eligible for a credit only if the project is implemented in
68	68	connection with the construction of a new facility.]
69	69	(b) The comptroller shall issue a credit to an entity
70	70	operating a clean energy project after:
71	71	(1) the Railroad Commission of Texas has issued a
72	72	certificate of compliance for the project to the entity as provided
73	73	by Section 120.004, Natural Resources Code;
74	74	(2) the construction of the project has been
75	75	completed;
76	76	(3) the electric generating facility associated with
77	77	the project is fully operational;
78	78	(4) the Texas Commission on Environmental Quality
79	79	[Bureau of Economic Geology of The University of Texas at Austin]
80	80	verifies to the comptroller that the electric generating facility
81	81	associated with the project is capturing, storing, sequestering,
82	82	using, or reusing carbon dioxide in a manner that prevents at least
83	83	90 [70] percent of the carbon dioxide resulting from or associated
84	84	with the generation of electricity by the facility from entering
85	85	the atmosphere; and
86	86	(5) the owner or operator of the project has entered
87	87	into an interconnection agreement relating to the project with the
88	88	Electric Reliability Council of Texas.
89	89	(c) Subject to Subsections (c-1) and (c-2), the [The] total
90	90	amount of the credit that may be issued to the entity designated in
91	91	the certificate of compliance for a clean energy project is equal to
92	92	the lesser of:
93	93	(1) 25 [10] percent of the total capital cost of the
94	94	project, including the cost of designing, engineering, permitting,
95	95	constructing, and commissioning the project, the cost of procuring
96	96	land, water, and equipment for the project, and all fees, taxes, and
97	97	commissions paid and other payments made in connection with the
98	98	project but excluding the cost of financing the capital cost of the
99	99	project; or
100	100	(2) $100 million.
101	101	(c-1) The total amount of credits that may be issued under
102	102	this subchapter during a state fiscal biennium may not exceed $500
103	103	million.
104	104	(c-2) The comptroller by rule shall prescribe procedures by
105	105	which the comptroller will allocate credits under this subchapter
106	106	if the amount of credits to be issued in a state fiscal biennium
107	107	exceeds the limit under Subsection (c-1). The procedures must
108	108	provide that credits are allocated and issued to taxable entities
109	109	on a first-come, first-served basis according to the date the
110	110	requirements of Subsection (b) are satisfied.
111	111	(f) The comptroller may not issue a credit under this
112	112	section after December 31, 2033 [before the later of:
113	113	[(1) September 1, 2018; or
114	114	[(2) the expiration of an agreement under Chapter 313
115	115	regarding the clean energy project for which the credit is issued].
116	116	SECTION 5. Sections 120.001(1), 120.002(c), 120.003(c),
117	117	120.003(d), and 120.004(b), Natural Resources Code, are repealed.
118	118	SECTION 6. A taxable entity may apply for a credit under
119	119	Subchapter L, Chapter 171, Tax Code, as amended by this Act, only
120	120	for capital costs incurred on or after the effective date of this
121	121	Act.
122	122	SECTION 7. (a) Except as provided by Subsection (b) of this
123	123	section, this Act applies only to a report originally due on or
124	124	after the effective date of this Act.
125	125	(b) The changes in law made by this Act do not affect a
126	126	franchise tax credit issued before the effective date of this Act,
127	127	including carryforward of the credit. The credit is governed by the
128	128	law in effect when the credit was issued, the former law is
129	129	continued in effect for that purpose, and a taxable entity may claim
130	130	the credit on a report originally due on or after the effective date
131	131	of this Act.
132	132	SECTION 8. This Act takes effect January 1, 2024.