77R11071 SMJ-D By Delisi, Hupp H.B. No. 2234 Substitute the following for H.B. No. 2234: By McCall C.S.H.B. No. 2234 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to franchise tax deductions and exemptions for certain 1-3 business activities involving wind energy devices. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter B, Chapter 171, Tax Code, is amended by 1-6 adding Section 171.088 to read as follows: 1-7 Sec. 171.088. EXEMPTION--CORPORATION ENGAGED IN BUSINESS 1-8 INVOLVING WIND ENERGY DEVICES. (a) In this section, "wind energy 1-9 device" means a system or a series of mechanisms designed primarily 1-10 to provide heating or cooling or to produce electrical or 1-11 mechanical power by collecting and transferring wind-generated 1-12 energy. 1-13 (b) A corporation engaged solely in the business of 1-14 manufacturing, selling, or installing wind energy devices is 1-15 exempted from the franchise tax. 1-16 SECTION 2. Subchapter C, Chapter 171, Tax Code, is amended by 1-17 adding Section 171.108 to read as follows: 1-18 Sec. 171.108. DEDUCTION OF COST OF WIND ENERGY DEVICE. (a) 1-19 In this section, "wind energy device" has the meaning assigned by 1-20 Section 171.088. 1-21 (b) A corporation may deduct from its apportioned taxable 1-22 capital the amortized cost of a wind energy device or from its 1-23 apportioned taxable earned surplus 10 percent of the amortized cost 1-24 of a wind energy device if: 2-1 (1) the device is acquired by the corporation for 2-2 heating or cooling or for the production of power; 2-3 (2) the device is used in this state by the 2-4 corporation; and 2-5 (3) the cost of the device is amortized: 2-6 (A) beginning in the month in which the device 2-7 is placed in service in this state; 2-8 (B) in equal monthly amounts for a period of at 2-9 least 60 months; and 2-10 (C) only for a period in which the device is 2-11 used in this state. 2-12 (c) A corporation that makes a deduction under this section 2-13 shall file with the comptroller an amortization schedule showing 2-14 the period in which a deduction will be made. On the request of 2-15 the comptroller, the corporation shall file with the comptroller 2-16 proof of the cost of the wind energy device or of the device's 2-17 operation in this state. 2-18 (d) A corporation may elect to make the deduction under this 2-19 section either from apportioned taxable capital or apportioned 2-20 taxable earned surplus for each regular annual period. An election 2-21 for an initial tax period applies to the second tax period and to 2-22 the first regular annual period. 2-23 SECTION 3. This Act takes effect January 1, 2002, and applies 2-24 to a report originally due on or after that date.