By Danburg H.B. No. 2845
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of an initiative to promote the
1-3 commercialization of fuel cell technologies, including tax
1-4 exemptions and reductions for certain corporations.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. DEFINITION. In this Act, "energy office" means
1-7 the State Energy Conservation Office.
1-8 SECTION 2. FUEL CELL COMMERCIALIZATION INITIATIVE. (a) The
1-9 energy office shall develop a statewide plan for the coordinated
1-10 acceleration of the commercialization of fuel cell generation in
1-11 this state. The plan must explore and draw conclusions about the
1-12 availability and efficacy of alternative mechanisms that might be
1-13 created in cooperation with the private sector, utilities, and
1-14 other agencies to accelerate the commercial availability and
1-15 economic viability of fuel cells for use in this state. The plan
1-16 must consider, at a minimum, the use of:
1-17 (1) funds available to the energy office or additional
1-18 funding from other state, federal, or private sources for programs
1-19 of research and development, particularly incentives for commercial
1-20 installation of cells by residential, commercial, or industrial
1-21 utility customers;
1-22 (2) utility-administered incentive funds, consistent
1-23 with programs established under Chapter 39, Utilities Code;
1-24 (3) market mechanisms that might be created to assure
2-1 that clean emerging technologies may be compensated for their
2-2 contribution to the reduction of harmful emissions; and
2-3 (4) tax or other economic incentives.
2-4 (b) In developing the plan and proposed rules, guidelines,
2-5 and operating procedures, the energy office shall seek the
2-6 assistance and support of, as appropriate, the Texas Natural
2-7 Resource Conservation Commission, the Public Utility Commission of
2-8 Texas, and other state or local agencies. The plan must consider
2-9 the impact of the use of fuel cell technologies in areas of the
2-10 state that the energy office determines:
2-11 (1) are designated as nonattainment areas under
2-12 Section 107(d) of the federal Clean Air Act (42 U.S.C. Section
2-13 7407); or
2-14 (2) have a high probability of being so designated in
2-15 the near future.
2-16 (c) Not later than September 15, 2002, the energy office
2-17 shall issue to the House Energy Resources Committee and the Senate
2-18 Business and Commerce Committee a report of its findings and
2-19 recommendations for development of the fuel cell commercialization
2-20 initiative, including:
2-21 (1) the state of the industry or of specific
2-22 components of the industry;
2-23 (2) alternative programs to accelerate the commercial
2-24 availability of fuel cells, including similar efforts by other
2-25 states;
2-26 (3) programs considered to encourage the industry to
2-27 locate manufacturing, system integration, or related component
3-1 parts or services in this state; and
3-2 (4) program recommendations, including how proposed
3-3 programs would work, the impact anticipated on industry
3-4 development, program costs and sources of funding, and proposed
3-5 measures of performance.
3-6 (d) The energy office shall appoint a fuel cell initiative
3-7 advisory committee to advise the energy office regarding
3-8 development of the plan and to assist the energy office in meeting
3-9 the goals of this Act. The energy office shall appoint to the
3-10 advisory committee representatives of:
3-11 (1) the fuel cell industry;
3-12 (2) energy services providers;
3-13 (3) electric transmission and distribution utilities;
3-14 (4) retail providers of electric energy; and
3-15 (5) small electric energy consumers.
3-16 SECTION 3. Subchapter B, Chapter 171, Tax Code, is amended by
3-17 adding Section 171.090 to read as follows:
3-18 Sec. 171.090. EXEMPTION--CORPORATION WITH BUSINESS INTEREST
3-19 IN FUEL CELL DEVICES. (a) In this section, "fuel cell device"
3-20 means an electrochemical cell in which the energy of a reaction
3-21 between a fuel, such as liquid hydrogen, and an oxidant, such as
3-22 liquid oxygen, is converted directly and continuously into
3-23 electrical energy. The term includes a mechanical or chemical
3-24 device that has the ability to store fuel cell-generated energy for
3-25 use in heating or cooling or in the production of power.
3-26 (b) A corporation engaged solely in the business of
3-27 manufacturing, selling, or installing fuel cell devices is exempted
4-1 from the franchise tax.
4-2 SECTION 4. Subchapter C, Chapter 171, Tax Code, is amended by
4-3 adding Section 171.1071 to read as follows:
4-4 Sec. 171.1071. DEDUCTION OF COST OF FUEL CELL DEVICE FROM
4-5 TAXABLE CAPITAL OR TAXABLE EARNED SURPLUS APPORTIONED TO THIS
4-6 STATE. (a) In this section, "fuel cell device" has the meaning
4-7 assigned to it in Section 171.090 of this code.
4-8 (b) A corporation may deduct from its apportioned taxable
4-9 capital the amortized cost of a fuel cell device or from its
4-10 apportioned taxable earned surplus 10 percent of the amortized cost
4-11 of a fuel cell device if:
4-12 (1) the device is acquired by the corporation for
4-13 heating or cooling or for the production of power;
4-14 (2) the device is used in this state by the
4-15 corporation; and
4-16 (3) the cost of the device is amortized in accordance
4-17 with Subsection (c) of this section.
4-18 (c) The amortization of the cost of a fuel cell device must:
4-19 (1) be for a period of at least 60 months;
4-20 (2) provide for equal monthly amounts;
4-21 (3) begin on the month in which the device is placed
4-22 in service in this state; and
4-23 (4) cover only a period in which the device is in use
4-24 in this state.
4-25 (d) A corporation that makes a deduction under this section
4-26 shall file with the comptroller an amortization schedule showing
4-27 the period in which a deduction is to be made. On the request of
5-1 the comptroller, the corporation shall file with the comptroller
5-2 proof of the cost of the fuel cell device or proof of the device's
5-3 operation in this state.
5-4 (e) A corporation may elect to make the deduction authorized
5-5 by this section either from apportioned taxable capital or
5-6 apportioned taxable earned surplus for each separate regular annual
5-7 period. An election for an initial period applies to the second
5-8 tax period and to the first regular annual period.
5-9 SECTION 5. EFFECTIVE DATE. This Act takes effect September
5-10 1, 2001.