89R15900 BEF-D
By: Harris H.B. No. 5120
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for taxable entities that
construct a nuclear project.
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 CONSTRUCTION OF NUCLEAR PROJECT
Sec. 171.701. DEFINITION. In this subchapter, "nuclear
project" includes a:
(1) nuclear power generation site or facility;
(2) nuclear reactor;
(3) nuclear reactor manufacturing facility;
(4) facility for reprocessing or recycling nuclear
fuel; and
(5) facility for enriching uranium.
Sec. 171.702. 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. 171.703. QUALIFICATION. A taxable entity qualifies
for a credit under this subchapter if the taxable entity owns a
nuclear project that is first placed in service during the period on
which the report is based.
Sec. 171.704. AMOUNT OF CREDIT; LIMITATION. (a) Subject to
Subsection (b), the amount of the credit a taxable entity may claim
on a report is equal to the lesser of:
(1) 10 percent of the taxable entity's costs to
construct and place in service the nuclear project; or
(2) $250 million.
(b) The total credit claimed on a report, including the
amount of any carryforward under Section 171.705, may not exceed
the amount of franchise tax due for the report after applying all
other applicable credits.
Sec. 171.705. CARRYFORWARD. (a) If a taxable entity is
eligible for a credit that exceeds the limitation under Section
171.704(b), the entity may carry the unused credit forward for not
more than 25 consecutive reports.
(b) A carryforward is considered the remaining portion of a
credit that cannot be claimed on a report 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 section; and
(2) a credit for the period on which the report is
based.
Sec. 171.706. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the report
for the period for which the credit is claimed.
(b) A taxable entity must apply for the credit in the manner
prescribed by the comptroller and include with the application any
information requested by the comptroller to determine whether the
entity is eligible for the credit under this subchapter.
Sec. 171.707. ASSIGNMENT PROHIBITED; EXCEPTION. 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. Subchapter N, Chapter 171, Tax Code, as added by
this Act, applies only to a report originally due on or after
January 1, 2026.
SECTION 3. This Act takes effect January 1, 2026.