88R7261 SRA-D
By: Creighton S.B. No. 1845
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for certain large economic
development projects, including certain electric generation
facilities.
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 CERTAIN ECONOMIC DEVELOPMENT
PROJECTS
Sec. 171.701. DEFINITION. In this subchapter, "qualifying
electric generation facility" means an electric generation
facility that does not use solar or wind resources to generate
electricity.
Sec. 171.702. APPLICABILITY. This subchapter applies only
to a taxable entity that, during the period beginning on January 1
of a year and ending December 31 of that same year, invests at least
$450 million in a business facility located in this state.
Sec. 171.703. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions provided
by this subchapter against the tax imposed under this chapter.
Sec. 171.704. AMOUNT OF CREDIT; LIMITATIONS. (a) Except as
otherwise provided by this section, a taxable entity may claim a
credit on a report in an amount that is the greater of:
(1) the product of $5,250 and the number of new jobs
created by the taxable entity during the period described by
Section 171.702; or
(2) the product of $10,000 and the number of megawatts
a qualifying electric generation facility produces, if the business
facility described by Section 171.702 is a qualifying electric
generation facility.
(b) The total credit claimed under this subchapter on a
report, including the amount of any carryforward under Section
171.705, may not exceed the lesser of:
(1) the amount of franchise tax due for the report
after applying any other applicable credits; or
(2) $23,650,000.
(c) A taxable entity may not claim a credit under Subsection
(a) on more than five consecutive reports.
Sec. 171.705. CARRYFORWARD. (a) A taxable entity that is
eligible for a credit under this subchapter that exceeds the
limitation under Section 171.704(b) may carry the unused credit
forward for not more than 10 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).
(c) Credits, including a carryforward, are considered to be
used in the following order:
(1) a carryforward under this subchapter; and
(2) a current year credit.
Sec. 171.706. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the report
for which the credit is claimed.
(b) The comptroller shall prescribe the form and method of
applying for a credit under this section. A taxable entity must use
the form and method prescribed by the comptroller to apply for the
credit.
(c) The comptroller may require a taxable entity to submit
with an application any information the comptroller determines is
necessary to determine whether the taxable entity meets the
requirements of Section 171.702.
Sec. 171.707. ASSIGNMENT PROHIBITED; EXEMPTION. A taxable
entity may not convey, assign, or transfer the credit allowed under
this subchapter to another taxable entity unless substantially all
of the assets of the taxable entity are conveyed, assigned, or
transferred in the same transaction.
Sec. 171.708. RULES. The comptroller shall adopt rules
necessary to implement and administer this subchapter.
SECTION 2. This Act applies only to an entity that:
(1) makes the investment required by Section 171.702,
Tax Code, as added by this Act, on or after January 1, 2024; or
(2) if the new business facility described by Section
171.702, Tax Code, as added by this Act, is a qualifying electric
generation facility, completes the facility or makes the investment
required by that section on or after January 1, 2024.
SECTION 3. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 4. This Act takes effect January 1, 2024.