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A BILL TO BE ENTITLED
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AN ACT
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relating to a franchise tax credit for certain large economic |
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development projects, including certain electric generation |
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facilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 171, Tax Code, is amended by adding |
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Subchapter N to read as follows: |
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SUBCHAPTER N. TAX CREDIT FOR CERTAIN ECONOMIC DEVELOPMENT |
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PROJECTS |
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Sec. 171.701. DEFINITION. In this subchapter, "qualifying |
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electric generation facility" means an electric generation |
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facility that does not use solar or wind resources to generate |
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electricity. |
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Sec. 171.702. APPLICABILITY. This subchapter applies only |
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to a taxable entity that, during the period beginning on January 1 |
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of a year and ending December 31 of that same year, invests at least |
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$450 million in a business facility located in this state. |
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Sec. 171.703. ENTITLEMENT TO CREDIT. A taxable entity is |
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entitled to a credit in the amount and under the conditions provided |
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by this subchapter against the tax imposed under this chapter. |
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Sec. 171.704. AMOUNT OF CREDIT; LIMITATIONS. (a) Except as |
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otherwise provided by this section, a taxable entity may claim a |
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credit on a report in an amount that is the greater of: |
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(1) the product of $5,250 and the number of new jobs |
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created by the taxable entity during the period described by |
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Section 171.702; or |
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(2) the product of $10,000 and the number of megawatts |
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a qualifying electric generation facility produces, if the business |
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facility described by Section 171.702 is a qualifying electric |
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generation facility. |
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(b) The total credit claimed under this subchapter on a |
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report, including the amount of any carryforward under Section |
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171.705, may not exceed the lesser of: |
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(1) the amount of franchise tax due for the report |
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after applying any other applicable credits; or |
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(2) $23,650,000. |
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(c) A taxable entity may not claim a credit under Subsection |
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(a) on more than five consecutive reports. |
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Sec. 171.705. CARRYFORWARD. (a) A taxable entity that is |
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eligible for a credit under this subchapter that exceeds the |
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limitation under Section 171.704(b) may carry the unused credit |
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forward for not more than 10 consecutive reports. |
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(b) A carryforward is considered the remaining portion of a |
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credit that cannot be claimed in the current year because of the |
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limitation under Section 171.704(b). |
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(c) Credits, including a carryforward, are considered to be |
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used in the following order: |
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(1) a carryforward under this subchapter; and |
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(2) a current year credit. |
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Sec. 171.706. APPLICATION FOR CREDIT. (a) A taxable entity |
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must apply for a credit under this subchapter on or with the report |
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for which the credit is claimed. |
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(b) The comptroller shall prescribe the form and method of |
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applying for a credit under this section. A taxable entity must use |
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the form and method prescribed by the comptroller to apply for the |
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credit. |
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(c) The comptroller may require a taxable entity to submit |
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with an application any information the comptroller determines is |
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necessary to determine whether the taxable entity meets the |
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requirements of Section 171.702. |
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Sec. 171.707. ASSIGNMENT PROHIBITED; EXEMPTION. A taxable |
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entity may not convey, assign, or transfer the credit allowed under |
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this subchapter to another taxable entity unless substantially all |
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of the assets of the taxable entity are conveyed, assigned, or |
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transferred in the same transaction. |
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Sec. 171.708. RULES. The comptroller shall adopt rules |
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necessary to implement and administer this subchapter. |
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SECTION 2. This Act applies only to an entity that: |
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(1) makes the investment required by Section 171.702, |
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Tax Code, as added by this Act, on or after January 1, 2024; or |
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(2) if the new business facility described by Section |
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171.702, Tax Code, as added by this Act, is a qualifying electric |
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generation facility, completes the facility or makes the investment |
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required by that section on or after January 1, 2024. |
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SECTION 3. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 4. This Act takes effect January 1, 2024. |