Amend CSHB 2845 by inserting the following appropriately
numbered sections:
      SECTION __. The Tax Code is amended to include Section
171.090 to read as follows:
      Sec. 171.090.  EXEMPTION - CORPORATION WITH BUSINESS INTEREST
IN FUEL CELL DEVICES. (a)  In this section, "fuel cell device"
means an electrochemical cell in which the energy of a reaction
between a fuel, such as liquid hydrogen, and an oxidant, such as
liquid oxygen, is converted directly and continuously into
electrical energy. The term includes a mechanical or chemical
device that has the ability to store fuel cell-generated energy for
use in heating or cooling or in the production of power.
      (b)  A corporation engaged soley in the business of
manufacturing, selling, or installing fuel cell devices is exempted
from the franchise tax.
      SECTION __. The Tax Code is amended to include Section
171.902 to read as follows:
      Sec. 171.902.  DEDUCTION OF COST OF FUEL CELL DEVICE FROM
TAXABLE CAPITAL OR TAXABLE EARNED SURPLUS APPORTIONED TO THIS
STATE. (a)  In this section, "fuel cell device" has the meaning
assigned to it in section 171.090 of this code.
      (b)  A corporation may deduct from its apportioned taxable
capital the amortized cost of a fuel cell device or from its
apportioned taxable earned surplus 10 percent of the amortized cost
of a fuel cell device if:
            (1)  the device is acquired by the corporation for
heating or cooling or for the production of power;
            (2)  the device is used in this state by the
corporation; and
            (3)  the cost of the device is amortized in accordance
with Subsection (c) of this section.
      (c)  The amortization of the cost of a fuel cell device must:
            (1)  be for a period of at least 60 months;
            (2)  provide for equal monthly amounts;
            (3)  begin on the month in which the device is placed
in service in this state; and
            (4)  cover only a period in which the device is in use
in this state.
      (d)  A corporation that makes a deduction under this section
shall file with the comptroller an amortization schedule showing
the period in which a deduction is to be made.  On the request of
the comptroller, the corporation shall file with the comptroller
proof of the cost of the fuel cell device or proof of the device's
operation in this state.
      (e)  A corporation may elect to make the deduction authorized
by this section either from apportioned taxable capital or
apportioned taxable earned surplus for each separate regular annual
period.  An election for an initial period applies to the second
tax period and to the first regular annual period.