Texas 2023 - 88th Regular

Texas Senate Bill SB2203 Compare Versions

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1	1	By: Hancock, West S.B. No. 2203
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 purpose of
13	13	capturing, storing, sequestering, using, or reusing carbon dioxide
14	14	emissions to prevent carbon dioxide from entering the atmosphere;
15	15	and
16	16	(B) is constructed as part of, or is located adjacent
17	17	to, a power generation facility, including a coal-fired generation
18	18	facility, natural gas-fired power system, hydrogen-powered
19	19	facility, or ammonia-powered system[to construct a coal-fueled,
20	20	natural gas-fueled, or petroleum coke-fueled electric generating
21	21	facility, including a facility in which the fuel is gasified before
22	22	combustion, that will:
23	23	[(A) have a capacity of at least 200 megawatts;
24	24	[(B) meet the emissions profile for an advanced clean
25	25	energy project under Section 382.003(1-a)(B), Health and Safety
26	26	Code;
27	27	[(C) capture at least 70 percent of the carbon dioxide
28	28	resulting from or associated with the generation of electricity by
29	29	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 certification
37	37	that a project operated by the entity meets the requirements for a
38	38	clean energy project. [An entity may not submit an application
39	39	under this section before September 1, 2018.] The application must
40	40	be accompanied by [÷
41	41	[(1)] a certificate from a qualified independent engineer
42	42	that the project is operational and meets the standards provided by
43	43	Section 120.001(2) [Sections 120.001(2)(A), (B), and (C); and
44	44	[(2) a fee payable to the commission].
45	45	SECTION 3. Section 120.003(b), Natural Resources Code, is
46	46	amended to read as follows:
47	47	(b) The Texas Commission on Environmental Quality [entity]
48	48	shall [contract with the bureau for the bureau to]:
49	49	(1) design initial protocols and standards for the
50	50	process described by Subsection (a);
51	51	(2) review the conduct of the process described by
52	52	Subsection (a) in order to make any necessary changes in the design
53	53	of the protocols and standards;
54	54	(3) evaluate the results of the process described by
55	55	Subsection (a);
56	56	(4) provide an evaluation of the results of the process
57	57	described by Subsection (a) to the commission; and
58	58	(5) determine whether to transmit to the comptroller
59	59	the verification described by Section 171.602(b)(4), Tax Code.
60	60	SECTION 4. Section 171.602, Tax Code, is amended by amending
61	61	Subsections (a), (b), (c), and (f) and adding Subsections (c-1) and
62	62	(c-2) to read as follows:
63	63	(a) The comptroller shall adopt rules for issuing to an
64	64	entity implementing a clean energy project in this state a credit
65	65	against the tax imposed under this chapter. [A clean energy project
66	66	is eligible for a credit only if the project is implemented in
67	67	connection with the construction of a new facility.]
68	68	(b) The comptroller shall issue a credit to an entity
69	69	operating a clean energy project after:
70	70	(1) the Railroad Commission of Texas has issued a
71	71	certificate of compliance for the project to the entity as provided
72	72	by Section 120.004, Natural Resources Code;
73	73	(2) the construction of the project has been completed;
74	74	(3) the electric generating facility associated with
75	75	the project is fully operational;
76	76	(4) the Texas Commission on Environmental Quality
77	77	[Bureau of Economic Geology of The University of Texas at Austin]
78	78	verifies to the comptroller that the electric generating facility
79	79	associated with the project is capturing, storing, sequestering,
80	80	using, or reusing carbon dioxide in a manner that prevents at least
81	81	90 [70] percent of the carbon dioxide resulting from or associated
82	82	with the generation of electricity by the facility from entering
83	83	the atmosphere; and
84	84	(5) the owner or operator of the project has entered
85	85	into an interconnection agreement relating to the project with the
86	86	Electric Reliability Council of Texas.
87	87	(c) Subject to Subsections (c-1), the [The] total amount of
88	88	the credit that may be issued to the entity designated in the
89	89	certificate of compliance for a clean energy project is equal to the
90	90	lesser of:
91	91	(1) 25 [10] percent of the total capital cost of the
92	92	project, including the cost of designing, engineering, permitting,
93	93	constructing, and commissioning the project, the cost of procuring
94	94	land, water, and equipment for the project, and all fees, taxes, and
95	95	commissions paid and other payments made in connection with the
96	96	project but excluding the cost of financing the capital cost of the
97	97	project; or
98	98	(2) $100 million.
99	99	(c-1) The comptroller by rule shall prescribe procedures that
100	100	provide that credits are allocated and issued to taxable entities
101	101	on a first-come, first-served basis according to the date the
102	102	requirements of Subsection (b) are satisfied.
103	103	(d) The comptroller may not issue a credit under this section
104	104	after December 31, 2033 [before the later of:
105	105	[(1) September 1, 2018; or
106	106	[(2) the expiration of an agreement under Chapter 313
107	107	regarding the clean energy project for which the credit is issued].
108	108	SECTION 5. Sections 120.001(1), 120.002(c), 120.003(c),
109	109	120.003(d), and 120.004(b), Natural Resources Code, are repealed.
110	110	SECTION 6. A taxable entity may apply for a credit under
111	111	Subchapter L, Chapter 171, Tax Code, as amended by this Act, only
112	112	for capital costs incurred on or after the effective date of this
113	113	Act.
114	114	SECTION 7. (a) Except as provided by Subsection (b) of this
115	115	section, this Act applies only to a report originally due on or
116	116	after the effective date of this Act.
117	117	(b) The changes in law made by this Act do not affect a
118	118	franchise tax credit issued before the effective date of this Act,
119	119	including carryforward of the credit. The credit is governed by the
120	120	law in effect when the credit was issued, the former law is
121	121	continued in effect for that purpose, and a taxable entity may claim
122	122	the credit on a report originally due on or after the effective date
123	123	of this Act.
124	124	SECTION 8. This Act takes effect January 1, 2024.