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