| 1 | 1 | | 88R7261 SRA-D |
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| 2 | 2 | | By: Creighton S.B. No. 1845 |
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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 credit for certain large economic |
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| 8 | 8 | | development projects, including certain electric generation |
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| 9 | 9 | | facilities. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Chapter 171, Tax Code, is amended by adding |
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| 12 | 12 | | Subchapter N to read as follows: |
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| 13 | 13 | | SUBCHAPTER N. TAX CREDIT FOR CERTAIN ECONOMIC DEVELOPMENT |
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| 14 | 14 | | PROJECTS |
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| 15 | 15 | | Sec. 171.701. DEFINITION. In this subchapter, "qualifying |
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| 16 | 16 | | electric generation facility" means an electric generation |
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| 17 | 17 | | facility that does not use solar or wind resources to generate |
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| 18 | 18 | | electricity. |
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| 19 | 19 | | Sec. 171.702. APPLICABILITY. This subchapter applies only |
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| 20 | 20 | | to a taxable entity that, during the period beginning on January 1 |
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| 21 | 21 | | of a year and ending December 31 of that same year, invests at least |
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| 22 | 22 | | $450 million in a business facility located in this state. |
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| 23 | 23 | | Sec. 171.703. ENTITLEMENT TO CREDIT. A taxable entity is |
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| 24 | 24 | | entitled to a credit in the amount and under the conditions provided |
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| 25 | 25 | | by this subchapter against the tax imposed under this chapter. |
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| 26 | 26 | | Sec. 171.704. AMOUNT OF CREDIT; LIMITATIONS. (a) Except as |
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| 27 | 27 | | otherwise provided by this section, a taxable entity may claim a |
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| 28 | 28 | | credit on a report in an amount that is the greater of: |
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| 29 | 29 | | (1) the product of $5,250 and the number of new jobs |
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| 30 | 30 | | created by the taxable entity during the period described by |
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| 31 | 31 | | Section 171.702; or |
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| 32 | 32 | | (2) the product of $10,000 and the number of megawatts |
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| 33 | 33 | | a qualifying electric generation facility produces, if the business |
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| 34 | 34 | | facility described by Section 171.702 is a qualifying electric |
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| 35 | 35 | | generation facility. |
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| 36 | 36 | | (b) The total credit claimed under this subchapter on a |
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| 37 | 37 | | report, including the amount of any carryforward under Section |
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| 38 | 38 | | 171.705, may not exceed the lesser of: |
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| 39 | 39 | | (1) the amount of franchise tax due for the report |
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| 40 | 40 | | after applying any other applicable credits; or |
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| 41 | 41 | | (2) $23,650,000. |
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| 42 | 42 | | (c) A taxable entity may not claim a credit under Subsection |
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| 43 | 43 | | (a) on more than five consecutive reports. |
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| 44 | 44 | | Sec. 171.705. CARRYFORWARD. (a) A taxable entity that is |
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| 45 | 45 | | eligible for a credit under this subchapter that exceeds the |
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| 46 | 46 | | limitation under Section 171.704(b) may carry the unused credit |
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| 47 | 47 | | forward for not more than 10 consecutive reports. |
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| 48 | 48 | | (b) A carryforward is considered the remaining portion of a |
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| 49 | 49 | | credit that cannot be claimed in the current year because of the |
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| 50 | 50 | | limitation under Section 171.704(b). |
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| 51 | 51 | | (c) Credits, including a carryforward, are considered to be |
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| 52 | 52 | | used in the following order: |
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| 53 | 53 | | (1) a carryforward under this subchapter; and |
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| 54 | 54 | | (2) a current year credit. |
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| 55 | 55 | | Sec. 171.706. APPLICATION FOR CREDIT. (a) A taxable entity |
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| 56 | 56 | | must apply for a credit under this subchapter on or with the report |
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| 57 | 57 | | for which the credit is claimed. |
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| 58 | 58 | | (b) The comptroller shall prescribe the form and method of |
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| 59 | 59 | | applying for a credit under this section. A taxable entity must use |
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| 60 | 60 | | the form and method prescribed by the comptroller to apply for the |
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| 61 | 61 | | credit. |
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| 62 | 62 | | (c) The comptroller may require a taxable entity to submit |
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| 63 | 63 | | with an application any information the comptroller determines is |
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| 64 | 64 | | necessary to determine whether the taxable entity meets the |
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| 65 | 65 | | requirements of Section 171.702. |
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| 66 | 66 | | Sec. 171.707. ASSIGNMENT PROHIBITED; EXEMPTION. A taxable |
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| 67 | 67 | | entity may not convey, assign, or transfer the credit allowed under |
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| 68 | 68 | | this subchapter to another taxable entity unless substantially all |
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| 69 | 69 | | of the assets of the taxable entity are conveyed, assigned, or |
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| 70 | 70 | | transferred in the same transaction. |
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| 71 | 71 | | Sec. 171.708. RULES. The comptroller shall adopt rules |
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| 72 | 72 | | necessary to implement and administer this subchapter. |
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| 73 | 73 | | SECTION 2. This Act applies only to an entity that: |
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| 74 | 74 | | (1) makes the investment required by Section 171.702, |
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| 75 | 75 | | Tax Code, as added by this Act, on or after January 1, 2024; or |
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| 76 | 76 | | (2) if the new business facility described by Section |
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| 77 | 77 | | 171.702, Tax Code, as added by this Act, is a qualifying electric |
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| 78 | 78 | | generation facility, completes the facility or makes the investment |
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| 79 | 79 | | required by that section on or after January 1, 2024. |
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| 80 | 80 | | SECTION 3. This Act applies only to a report originally due |
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| 81 | 81 | | on or after the effective date of this Act. |
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| 82 | 82 | | SECTION 4. This Act takes effect January 1, 2024. |
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