By: McLaughlin H.B. No. 5600
A BILL TO BE ENTITLED
AN ACT
relating to the development and expansion of clean hydrogen
production, distribution, and utilization in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 490J, Government Code, is added to read
as follows:
Sec. 490J.001. CLEAN HYDROGEN DEVELOPMENT FUND. (a) The
Clean Hydrogen Development Fund is established as a special fund in
the state treasury to finance clean hydrogen projects.
(b) The fund shall be administered by the comptroller in
consultation with the Texas Commission on Environmental Quality and
the Texas Railroad Commission.
(c) Money in the fund may be used to provide:
(1) low interest loans for hydrogen infrastructure and
production facilities;
(2) state-backed bonds for the financing of hydrogen
projects; or
(3) state grants for hydrogen electrolyzer
manufacturing in this state.
(d) The fund may accept federal grants, private donations,
and legislative appropriations.
SECTION 2. Subchapter L, Chapter 171, Tax Code, is amended
by adding Section 171.603 to read as follows:
Sec. 171.603. CLEAN HYDROGEN TAX INCENTIVES. (a) A person
or business entity that constructs or operates a clean hydrogen
production facility in this state may be eligible for a state tax
credit.
(b) The credit shall be equivalent to 20 percent of
qualified capital expenditures related to hydrogen production,
transport, or storage.
(c) A manufacturer of hydrogen electrolyzers relocating to
Texas from out of state shall receive:
(1) a 10-year franchise tax exemption; and
(2) a sales tax exemption on equipment purchases used
in manufacturing.
(d) The comptroller shall adopt rules necessary for
implementation, including reporting requirements to track economic
impact.
SECTION 3. Chapter 502, Transportation Code, is amended by
adding Section 502.257 to read as follows:
Sec. 502.257. TEMPORARY HIGHWAY TAX RELIEF FOR HYDROGEN
VEHICLES. (a) Hydrogen-powered vehicles, including hydrogen
internal combustion engine and fuel cell vehicles, shall be exempt
from state highway use taxes for ten years or until cost parity with
conventional energy sources is reached, as determined by the Texas
Commission on Environmental Quality.
(b) The exemption applies to commercial trucking, rail,
shipping, and aviation operators.
SECTION 4. Chapter 136, Education Code, is amended by
adding Section 136.008 to read as follows:
Sec. 136.008. WORKFORCE DEVELOPMENT INITIATIVES. (a) The
Texas Workforce Development Commission shall establish
partnerships with universities, technical schools, or community
colleges to provide specialized training for hydrogen sector jobs.
(b) The Workforce Commission may provide grants to
educational institutions to develop curriculum and certification
programs for hydrogen technology.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.