2005S0526-1 03/09/05
By: Hughes H.B. No. 3337
A BILL TO BE ENTITLED
AN ACT
relating to implementing clean coal projects in the state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. (a) The legislature finds that Texas is the
largest producer and consumer of energy and the largest consumer of
coal in the country. Currently the Public Utility Commission of
Texas estimates that 37 percent of the electricity generated in
Texas is produced with coal. Low-cost coal-fueled generation is
the foundation of affordable electricity in Texas. Texas must
continue to have a significant component of its electricity
provided through coal-fueled generation in order to maintain
reliable and affordable energy into the future.
(b) The legislature also finds that coal-fueled generation
will play a significant role in ensuring that Texas provides
permanent, well-paid jobs for the growing state population and will
provide income and revenue to ensure that Texas continues to
provide a high standard of services to its residents and
businesses.
(c) The legislature also finds that federal government has
developed several grant programs designed to facilitate the
installation of innovative clean coal technologies to ensure that
coal can continue to be utilized in a manner that is economically
sound and that protects the environment. Clean coal technologies
provide the opportunity for meeting Texas' energy demands while
further lowering emissions, and these technologies should be
encouraged for use in existing and future power generation.
(d) The legislature also finds that facilitating the
construction of clean coal projects at a new or existing electric
generating, steam production, or industrial products facility is in
the best interest of all of the citizens of Texas. Financial and
regulatory incentives for the installation of clean coal technology
will better position the state to receive federal funding for such
projects.
(e) The legislature also finds that agencies of the state
should facilitate the construction and operation of clean coal
projects by streamlining regulatory processes associated with such
projects to ensure predictability and to improve the state's
position for federal funding while preserving the environmental
protection provided by current standards.
SECTION 2. Section 5.001, Water Code, is amended by adding
Subdivision (1-a) to read as follows:
(1-a) "Clean coal project" means the construction of
electric generating, steam production, or industrial production
facilities, the modification of existing facilities, or other
projects that install technology, including gasification, designed
to utilize coal while reducing emissions of air contaminants.
SECTION 3. Subchapter M, Chapter 5, Water Code, is amended
by adding Section 5.558 to read as follows:
Sec. 5.558. CLEAN COAL PROJECT PERMITTING. As authorized
by federal law, the commission shall implement permit processes
that facilitate the construction of clean coal projects in the
state.
SECTION 4. Section 134.004, Natural Resources Code, is
amended by adding Subdivision (4-a) to read as follows:
(4-a) "Clean coal project" means the construction of
electric generating, steam production, or industrial production
facilities, the modification of existing facilities, or other
projects that install technology, including gasification, designed
to utilize coal while reducing emissions of air contaminants.
SECTION 5. Section 134.013, Natural Resources Code, is
amended by adding Subsection (d) to read as follows:
(d) As authorized by federal law, the commission shall
implement permit processes that facilitate the construction of
clean coal projects in the state.
SECTION 6. Section 2305.002, Government Code, is amended by
adding Subdivision (2-a) to read as follows:
(2-a) "Clean coal project" means the construction of
electric generating, steam production, or industrial production
facilities, the modification of existing facilities, or other
projects that install technology, including gasification, designed
to utilize existing solid fossil fuel coal resources while reducing
emissions of air contaminants associated with the use of such
resources.
SECTION 7. Section 2305.037, Government Code, is amended to
read as follows:
Sec. 2305.037. CLEAN [RENEWABLE] ENERGY DEMONSTRATION
PROGRAM. (a) The energy office is the supervising state agency of
the clean [renewable] energy demonstration program and shall
distribute grant money under the program for demonstration projects
that develop clean [sustainable and renewable] energy resources,
including sustainable, renewable, and low-emission energy
resources including:
(1) photovoltaic, biomass, wind, and solar
applications; [and]
(2) gasification; and
(3) other appropriate low-emission, renewable, and
sustainable energy applications.
(b) The energy office shall distribute 50 cents of grant
money out of the Innovative Technology Fund for every dollar
invested by individuals or companies for the promotion and
development in Texas of clean coal projects. The energy office
shall not distribute grant funds under this subsection in excess of
$20 million.
(c) The energy office may require a grant recipient to match
a grant in a ratio determined by the energy office.
SECTION 8. Subsections (b) and (e), Section 313.024, Tax
Code, are amended to read as follows:
(b) To be eligible for a limitation on appraised value under
this subchapter, the corporation or limited liability company must
use the property in connection with:
(1) manufacturing;
(2) research and development; [or]
(3) renewable energy electric generation; or
(4) clean coal projects.
(e) In this section:
(1) "Clean coal project" means the construction of
electric generating, steam production, or industrial production
facilities, the modification of existing facilities, or other
projects that install technology, including gasification, designed
to utilize coal while reducing emissions of air contaminants.
(2) "Manufacturing" and "research and development"
have the meanings assigned by Section 171.751.
(3) [(2)] "Renewable energy electric generation"
means an establishment primarily engaged in activities described in
category 221119 of the 1997 North American Industry Classification
System.
SECTION 9. Subchapter C, Chapter 171, Tax Code, is amended
by adding Section 171.108 to read as follows:
Sec. 171.108. DEDUCTION OF COST OF A CLEAN COAL PROJECT FROM
TAXABLE CAPITAL OR TAXABLE EARNED SURPLUS APPORTIONED TO THIS
STATE. (a) In this section, "clean coal project" means the
construction of electric generating, steam production, or
industrial production facilities, the modification of existing
facilities, or other projects that install technology, including
gasification, designed to utilize coal while reducing emissions of
air contaminants.
(b) A corporation may deduct from its apportioned taxable
capital the amortized cost of equipment used in a clean coal project
or from its apportioned taxable earned surplus 10 percent of the
amortized cost of the equipment if:
(1) the equipment is acquired by the corporation for
use in the generation of electricity, the production of process
steam, or industrial production;
(2) the equipment is used in this state by the
corporation; and
(3) the cost of the equipment is amortized in
accordance with Subsection (c).
(c) The amortization of the cost of the equipment used in a
clean coal project 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 equipment is placed
in service in this state; and
(4) cover only a period in which the equipment 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 equipment used in a clean coal project or proof of
the equipment'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.
SECTION 10. The Texas Commission on Environmental Quality
shall adopt rules as necessary to implement Section 5.558, Water
Code, as added by this Act, not later than September 1, 2006.
SECTION 11. The Railroad Commission of Texas shall adopt
rules as necessary to implement Subsection (d), Section 134.013,
Natural Resources Code, as added by this Act, not later than
September 1, 2006.
SECTION 12. The comptroller of public accounts shall adopt
rules as necessary to implement Section 2305.037, Government Code,
as amended by this Act, not later than September 1, 2006.
SECTION 13. Section 171.108, Tax Code, as added by this Act,
applies only to a franchise tax report originally due on or after
January 1, 2006. A franchise tax report originally due before
January 1, 2006, is governed by the law in effect on the date the
report was originally due, and that law is continued in effect for
the purposes of the liability for and collection of those taxes.
SECTION 14. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2005.