Texas House Bill HB5120

Texas 2025 - 89th Regular

• Filed: 3/13/25

Caption

Relating to a franchise tax credit for taxable entities that construct a nuclear project.

Impact

The bill amends Chapter 171 of the Tax Code by adding Subchapter N, which details the mechanics of the tax credit. Eligible entities can claim a credit amounting to either 10% of their construction costs or up to $250 million, whichever is lesser. Additionally, if a taxable entity's credit exceeds its due franchise tax for the reporting period, it has the option to carry forward the unused credit for up to 25 consecutive reports, ensuring continued support for large-scale investments in the sector.

Summary

House Bill 5120 proposes the introduction of a franchise tax credit specifically designed for taxable entities that engage in the construction of nuclear projects. The legislation outlines the qualifications for receiving this credit, which includes ownership of a nuclear power generation site, reactor, or related facilities. This initiative aims to stimulate investment in nuclear energy infrastructure within the state of Texas by providing financial incentives to companies that undertake such projects.

Contention

While the bill positions itself as an economic boost for Texas through enhanced nuclear capabilities, it may face scrutiny regarding its long-term implications on the state’s energy strategy and environmental policies. Critics may argue that emphasizing nuclear power, while providing substantial tax breaks, could divert necessary funding and focus from renewable energy sources. The timing of the implementation, set for reports originally due on or after January 1, 2026, also raises questions about the foresight in aligning this initiative with state and national energy goals.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 171. Franchise Tax
  • Section: New Section