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A BILL TO BE ENTITLED
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AN ACT
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relating to a franchise tax credit for the production of |
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carbon-free hydrogen. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 171, Tax Code, is amended by adding |
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Subchapter K to read as follows: |
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SUBCHAPTER K. TAX CREDIT FOR PRODUCTION OF CARBON-FREE HYDROGEN |
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Sec. 171.601. DEFINITION OF CARBON-FREE HYDROGEN. (a) For |
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purposes of this subchapter, hydrogen is considered to be |
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carbon-free if: |
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(1) any carbon resulting from the production of the |
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hydrogen is captured during production and: |
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(A) permanently geologically sequestered; or |
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(B) used in the production of other carbon-based |
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products at a rate that exceeds 90 percent of the input; and |
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(2) any carbon resulting from the generation of any |
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electricity used in the production of the hydrogen is captured and: |
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(A) permanently geologically sequestered; or |
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(B) used in the production of other carbon-based |
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products at a rate that exceeds 90 percent of the input. |
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(b) For purposes of Subsection (a), the generation of wind |
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power, solar power, hydroelectricity, geothermal electricity, |
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tidal electricity, or nuclear power is considered to result in no |
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carbon. |
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Sec. 171.602. ELIGIBILITY. A taxable entity is eligible |
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for a credit against the tax imposed under this chapter for a period |
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in the amount and under the conditions provided by this subchapter |
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if, during that period: |
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(1) the taxable entity is primarily engaged in the |
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business of producing energy sources; and |
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(2) at least 60 percent of the total amount of the |
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energy sources the taxable entity produces is carbon-free hydrogen. |
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Sec. 171.603. CALCULATION OF CREDIT. The amount of the |
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credit under this subchapter for a period is equal to 25 percent of |
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the amount of the tax that would otherwise be imposed under this |
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chapter for the period in the absence of the credit. |
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Sec. 171.604. CERTIFICATION OF ELIGIBILITY. (a) For the |
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initial and each succeeding report on which a credit is claimed |
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under this subchapter, the taxable entity claiming the credit shall |
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file with the entity's report, on a form provided by the |
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comptroller, information that sufficiently demonstrates that the |
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entity is eligible for the credit. |
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(b) The burden of establishing entitlement to the credit is |
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on the taxable entity. |
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Sec. 171.605. RULES. The comptroller shall adopt rules and |
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forms necessary to implement this subchapter. |
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SECTION 2. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2008. |