By Keffer H.B. No. 661
77R1173 SMJ-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a franchise tax credit for certain expenditures
1-3 relating to reducing hazardous substances.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 171, Tax Code, is amended by adding
1-6 Subchapter S to read as follows:
1-7 SUBCHAPTER S. TAX CREDIT FOR CERTAIN EXPENDITURES RELATING TO
1-8 REDUCING HAZARDOUS SUBSTANCES
1-9 Sec. 171.851. DEFINITION. In this subchapter, "hazardous
1-10 substance" has the meaning assigned by Section 361.003, Health and
1-11 Safety Code.
1-12 Sec. 171.852. CREDIT. A corporation that meets the
1-13 eligibility requirements under this subchapter is entitled to a
1-14 credit in the amount allowed by this subchapter against the tax
1-15 imposed under this chapter.
1-16 Sec. 171.853. EXPENDITURES ELIGIBLE FOR CREDIT. (a) A
1-17 corporation may claim a credit under this subchapter only for a
1-18 qualifying expenditure relating to the cost of equipment or the
1-19 implementation of a process, such as recycling, reuse,
1-20 detoxification, or neutralization, the primary purpose of which is
1-21 reducing an environmental or health hazard associated with a
1-22 hazardous substance.
1-23 (b) To claim a credit under this subchapter, a corporation
1-24 must use the equipment or process described by Subsection (a).
2-1 (c) The credit may not include an operating expense of the
2-2 corporation.
2-3 Sec. 171.854. AMOUNT; LIMITATIONS. (a) The amount of the
2-4 credit is equal to the lesser of:
2-5 (1) $50,000;
2-6 (2) 20 percent of a corporation's qualifying
2-7 expenditures; or
2-8 (3) the amount of net franchise tax due, after
2-9 applying any other credits, for the reporting period.
2-10 (b) A corporation may claim a credit under this subchapter
2-11 for a qualifying expenditure during an accounting period only
2-12 against the tax owed for the corresponding reporting period.
2-13 Sec. 171.855. APPLICATION FOR CREDIT. (a) A corporation
2-14 must apply for a credit under this subchapter on or with the tax
2-15 report for the period for which the credit is claimed.
2-16 (b) The comptroller shall adopt a form that a corporation
2-17 must use in applying for the credit.
2-18 Sec. 171.856. ASSIGNMENT PROHIBITED. A corporation may not
2-19 convey, assign, or transfer a credit allowed under this subchapter
2-20 to another entity unless all of the assets of the corporation are
2-21 conveyed, assigned, or transferred in the same transaction.
2-22 Sec. 171.857. BIENNIAL REPORT BY COMPTROLLER. (a) Before
2-23 the beginning of each regular session of the legislature, the
2-24 comptroller shall submit to the governor, the lieutenant governor,
2-25 and the speaker of the house of representatives a report that
2-26 states:
2-27 (1) the total amount of qualified expenditures
3-1 incurred by corporations that claim a credit under this subchapter;
3-2 (2) the total amount of credits applied against the
3-3 tax under this chapter and the amount of unused credits, including:
3-4 (A) the total amount of franchise tax due by
3-5 corporations claiming a credit under this subchapter before and
3-6 after the application of the credit;
3-7 (B) the average percentage reduction in
3-8 franchise tax due by corporations claiming a credit under this
3-9 subchapter;
3-10 (C) the percentage of tax credits that were
3-11 awarded to corporations with fewer than 100 employees; and
3-12 (D) the standard industrial classification of
3-13 corporations claiming a credit under this subchapter;
3-14 (3) the geographical distribution of the equipment or
3-15 processes described by Section 171.853 for which tax credit claims
3-16 are made under this subchapter; and
3-17 (4) the impact of the credit provided under this
3-18 subchapter on:
3-19 (A) reducing an environmental or health hazard
3-20 associated with a hazardous substance; and
3-21 (B) state tax revenues.
3-22 (b) The comptroller may not include in the report
3-23 information that is confidential by law.
3-24 (c) For purposes of this section, the comptroller may
3-25 require a corporation that claims a credit under this subchapter to
3-26 submit information, on a form provided by the comptroller, on the
3-27 location of the corporation's capital investment in this state
4-1 relating to abatement of hazardous substances and any other
4-2 information necessary to complete the report required under this
4-3 section.
4-4 Sec. 171.858. COMPTROLLER POWERS AND DUTIES. The
4-5 comptroller, in cooperation with the Texas Natural Resource
4-6 Conservation Commission, shall adopt rules and forms necessary to
4-7 implement this subchapter.
4-8 SECTION 2. A corporation may claim the credit under
4-9 Subchapter S, Chapter 171, Tax Code, as added by this Act, only:
4-10 (1) for a qualifying expenditure made on or after the
4-11 effective date of this Act; and
4-12 (2) on a franchise tax report due under Chapter 171,
4-13 Tax Code, on or after January 1, 2002.
4-14 SECTION 3. (a) This Act takes effect July 1, 2001, if it
4-15 receives a vote of two-thirds of all members elected to each house,
4-16 as provided by Section 39, Article III, Texas Constitution. If this
4-17 Act does not receive the vote necessary for effect on that date,
4-18 this Act takes effect October 1, 2001.
4-19 (b) The changes in law made by this Act do not affect taxes
4-20 imposed before the effective date of this Act, and the law in
4-21 effect before the effective date of this Act remains in effect for
4-22 purposes of the liability for and collection of those taxes.