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INTRODUCED
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HOUSE COMMITTEE
SUBSTITUTE
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SECTION 1. Section
382.003(1-a), Health and Safety Code, is amended to read as follows:
(1-a) "Advanced clean
energy project" means a project for which an application for a permit
or for an authorization to use a standard permit under this chapter is
received by the commission on or after January 1, 2008, and before January
1, 2020, and that:
(A) involves the use of coal, biomass, petroleum coke, solid
waste, or fuel cells using hydrogen derived from such fuels, in
the generation of electricity, or the creation of liquid fuels outside of
the existing fuel production infrastructure while co-generating
electricity, whether the project is implemented in connection with the
construction of a new facility or in connection with the modification of an
existing facility and whether the project involves the entire emissions
stream from the facility or only a portion of the emissions stream from the
facility;
(B) with regard to the
portion of the emissions stream from the facility that is associated with
the project, is capable of achieving:
(i) on an annual basis,
a 99 percent or greater reduction of sulfur dioxide emissions, or:
(a) if the project is
designed for the use of one or more combustion turbines, an emission rate
that meets best available control technology requirements as determined by
the commission; or
(b) if the project is
designed for the use of feedstock substantially all of which is
subbituminous coal, an emission rate of 0.04 pounds or less of sulfur
dioxide per million British thermal units as determined by a 30-day
average;
(ii) on an annual basis a 95
percent or greater reduction of mercury emissions, if applicable;
(iii) an annual average
emission rate for nitrogen oxides of:
(a) 0.05 pounds or less per
million British thermal units; or
(b) if the project uses
gasification technology, 0.034 pounds or less per million British thermal
units; and
(iv) an annual average
emission rate for filterable particulate matter of 0.015 pounds or less per
million British thermal units; and
(C) captures not less than
50 percent of the carbon dioxide in the portion of the emissions stream
from the facility that is associated with the project and sequesters that
captured carbon dioxide by geologic storage or other means.
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SECTION 2. Section
382.003(1-a), Health and Safety Code, is amended to read as follows:
(1-a) "Advanced clean
energy project" means a project for which an application for a permit
or for an authorization to use a standard permit under this chapter is
received by the commission on or after January 1, 2008, and before January
1, 2020, and that:
(A) involves the use of coal, biomass, petroleum coke, solid
waste, natural gas, or fuel cells using hydrogen derived from such
fuels, in the generation of electricity, or the creation of liquid
fuels outside of the existing fuel production infrastructure while
co-generating electricity, whether the project is implemented in connection
with the construction of a new facility or in connection with the
modification of an existing facility and whether the project involves the
entire emissions stream from the facility or only a portion of the
emissions stream from the facility;
(B) with regard to the
portion of the emissions stream from the facility that is associated with
the project, is capable of achieving:
(i) on an annual basis:
(a) a 99 percent or
greater reduction of sulfur dioxide emissions;
(c) if the project is
designed for the use of one or more combustion turbines that burn natural gas, a sulfur dioxide
emission rate that meets best available control technology requirements as
determined by the commission;
(b) [or,] if
the project is designed for the use of feedstock, substantially all
of which is subbituminous coal, an emission rate of 0.04 pounds or less of
sulfur dioxide per million British thermal units as determined by a 30-day
average; or
(ii) on an annual basis a
95 percent or greater reduction of mercury emissions, if applicable;
(iii) an annual average
emission rate for nitrogen oxides of:
(a) 0.05 pounds or less per
million British thermal units; or
(b) if the project uses
gasification technology, 0.034 pounds or less per million British thermal
units; and
(iv) an annual average
emission rate for filterable particulate matter of 0.015 pounds or less per
million British thermal units; and
(C) captures not less than
50 percent of the carbon dioxide in the portion of the emissions stream
from the facility that is associated with the project and sequesters that
captured carbon dioxide by geologic storage or other means.
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SECTION 2. Section
120.001(2), Natural Resources Code, is amended to read as follows:
(2) "Clean energy
project" means a project to construct ancoal-fueled
or petroleum coke-fueled electric generating facility, including
a facility in which the fuel is gasified before combustion, that will:
(A) have a capacity of at
least 200 megawatts;
(B) meet the emissions
profile for an advanced clean energy project under Section 382.003(1-a)(B),
Health and Safety Code;
(C) capture at least 70
percent of the carbon dioxide resulting from or associated with the
generation of electricity by the facility;
(D) be capable of
permanently sequestering in a geological formation the carbon dioxide
captured; and
(E) be capable of supplying
the carbon dioxide captured for purposes of an enhanced oil recovery
project.
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SECTION 3. Section
120.001(2), Natural Resources Code, is amended to read as follows:
(2) "Clean energy
project" means a project to construct a
coal-fueled, natural gas-fueled, or petroleum coke-fueled
electric generating facility, including a facility in which the fuel is
gasified before combustion, that will:
(A) have a capacity of at
least 200 megawatts;
(B) meet the emissions
profile for an advanced clean energy project under Section 382.003(1-a)(B),
Health and Safety Code;
(C) capture at least 70
percent of the carbon dioxide resulting from or associated with the
generation of electricity by the facility;
(D) be capable of
permanently sequestering in a geological formation the carbon dioxide
captured; and
(E) be capable of supplying
the carbon dioxide captured for purposes of an enhanced oil recovery
project.
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SECTION 3. Subchapter H,
Chapter 490, Government Code, section 490.352 is amended to read as
follows:
Sec. 490.352. FRANCHISE TAX
CREDIT FOR CLEAN ENERGY PROJECT. (a) The comptroller shall adopt rules
for issuing to an entity implementing a clean energy project in this state
a franchise tax credit. A clean energy project is eligible for a franchise
tax credit only if the project is implemented in connection with the
construction of a new facility.
(b) The comptroller shall
issue a franchise tax credit to an entity operating a clean energy project
after:
(1) the Railroad Commission
of Texas has issued a certificate of compliance for the project to the
entity as provided by Section 120.004, Natural Resources Code;
(2) the construction of the
project has been completed;
(3) the electric generating
facility associated with the project is fully operational;
(4) the Bureau of Economic
Geology of The University of Texas at Austin verifies to the comptroller
that the electric generating facility associated with the project is
sequestering at least 70 percent of the carbon dioxide resulting from or
associated with the generation of electricity by the facility; and
(5) the owner or operator of
the project has entered into an interconnection agreement relating to the project
with the Electric Reliability Council of Texas.
(c) The total amount of the franchise
tax credit that may be issued to the entity designated in the certificate
of compliance for a clean energy project is equal to the lesser of:
(1) 10 percent of the total
capital cost of the project, including the cost of designing, engineering,
permitting, constructing, and commissioning the project, the cost of
procuring land, water, and equipment for the project, and all fees, taxes,
and commissions paid and other payments made in connection with the project
but excluding the cost of financing the capital cost of the project; or
(2) $100 million.
(d) The entity designated
in the certificate of compliance for the project may assign the franchise
tax credit to any other entity that has or
acquires an interest in the income generated by the project in proportion
to their ownership in the project.
The amount of the
franchise tax credit for each report year is calculated by determining the
amount of franchise tax that is due based on the taxable margin generated
by a clean energy project from the generation and sale of power and the
sale of any products that are produced by the electric generation facility.
The amount of the franchise tax credit
claimed under this section for a report year may not exceed the amount of
franchise tax due to the state from an entity claiming the credit.attributable
to the clean energy project for that report year.Any unused credit may be carried forward for up to
20 years.
(e) The comptroller may not
issue a franchise tax credit under this section before September 1, 20183
or while a valuation cap agreement under Chapter 313, Tax Code is in
effect for the project.This subsection expires September 2,
2013.
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SECTION 1. Subchapter H,
Chapter 490, Government Code, is transferred to Chapter 171, Tax Code,
redesignated as Subchapter L, Chapter 171, Tax Code, and amended to read as
follows:
SUBCHAPTER L. [H.
FRANCHISE] TAX CREDIT FOR CLEAN ENERGY PROJECT
Sec.
171.651 [490.351]. DEFINITION. In this subchapter,
"clean energy project" has the meaning assigned by Section
120.001, Natural Resources Code.
Sec. 171.652. [490.352.
FRANCHISE] TAX CREDIT FOR CLEAN ENERGY PROJECT. (a) The comptroller
shall adopt rules for issuing to an entity implementing a clean energy
project in this state a [franchise tax] credit against the tax
imposed under this chapter. A clean energy project is eligible for a [franchise
tax] credit only if the project is implemented in connection with the
construction of a new facility.
(b) The comptroller shall
issue a [franchise tax] credit to an entity operating a clean energy
project after:
(1) the Railroad Commission
of Texas has issued a certificate of compliance for the project to the
entity as provided by Section 120.004, Natural Resources Code;
(2) the construction of the
project has been completed;
(3) the electric generating
facility associated with the project is fully operational;
(4) the Bureau of Economic
Geology of The University of Texas at Austin verifies to the comptroller
that the electric generating facility associated with the project is
sequestering at least 70 percent of the carbon dioxide resulting from or
associated with the generation of electricity by the facility; and
(5) the owner or operator of
the project has entered into an interconnection agreement relating to the
project with the Electric Reliability Council of Texas.
(c) The total amount of the [franchise tax] credit that may be
issued to the entity designated in the certificate of compliance for a
clean energy project is equal to the lesser of:
(1) 10 percent of the total
capital cost of the project, including the cost of designing, engineering,
permitting, constructing, and commissioning the project, the cost of
procuring land, water, and equipment for the project, and all fees, taxes,
and commissions paid and other payments made in connection with the project
but excluding the cost of financing the capital cost of the project; or
(2) $100 million.
(e) The entity designated
in the certificate of compliance for a clean energy project may assign the
credit to one or more taxable entities.
A taxable entity to which the credit is assigned may claim the credit
against the tax imposed under this chapter subject to the conditions and
limitations of this subchapter.
(d) [The amount of the
franchise tax credit for each report year is calculated by determining the
amount of franchise tax that is due based on the taxable margin generated
by a clean energy project from the generation and sale of power and the
sale of any products that are produced by the electric generation facility.]
The total [amount of the franchise
tax] credit that a taxable entity may claim [claimed]
under this section for a report, including the amount of any
carryforward credit, [year] may not exceed the amount of
franchise tax due by the taxable entity for the report after any
applicable tax credits [attributable to the clean energy
project for that report year]. If a
taxable entity is eligible to claim a credit that exceeds the limitation of
this subsection, the taxable entity may carry the unused credit forward for
not more than 20 consecutive reports. A carryforward is considered the
remaining portion of the credit that the taxable entity does not claim in
the current year because of the limitation.
(f) The comptroller
may not issue a [franchise tax]
credit under this section before the later of:
(1) September 1, 2018;
or
(2) the expiration of an agreement under Chapter 313
regarding the clean energy project for which the credit is issued
[2013. This subsection expires September 2, 2013].
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SECTION 4. The Texas
Commission on Environmental Quality shall adopt rules as necessary to
implement Section 382.003, Health and Safety Code, as amended by this Act,
not later than January 1, 2014.
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SECTION 8. Not later than
January 1, 2014, the Texas Commission on Environmental Quality shall adopt
rules as necessary to implement the change in law made by this Act to
Section 382.003, Health and Safety Code.
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SECTION 5. The Railroad
Commission of Texas may adopt rules as necessary to implement section
120.001(2), Natural Resources Code, as amended by this Act.
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SECTION 9. The Railroad
Commission of Texas may adopt rules as necessary to implement the change in
law made by this Act to Section 120.001, Natural Resources Code.
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SECTION 6. The comptroller
shall adopt rules under Section 490.352, Government Code, as added by this
Act, not later than January 1, 2014.
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SECTION 7. Not later than
January 1, 2014, the comptroller of public accounts shall adopt rules
necessary to implement Subchapter L, Chapter 171, Tax Code, as redesignated
and amended by this Act
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No
equivalent provision.
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SECTION 4. Section
120.002(b), Natural Resources Code, is amended to read as follows:
(b) On or after September
1, 2018, an [An] entity may apply to the commission for a
certification that a project operated by the entity meets the requirements
for a clean energy project. The application must be accompanied by:
(1) a certificate from a
qualified independent engineer that the project is operational and meets
the standards provided by Sections 120.001(2)(A), (B), and (C); and
(2) a fee payable to the
commission.
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No
equivalent provision.
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SECTION 5. Section
120.003(a), Natural Resources Code, is amended to read as follows:
(a) An entity that applies
to the commission under Section 120.002 for a certification that a project
operated by the entity meets the requirements for a clean energy project is
responsible for conducting a monitoring, measuring, and verification
process that demonstrates that the project complies with the requirements
of Section 171.652(b)(4), Tax [490.352(b)(4), Government]
Code.
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No
equivalent provision.
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SECTION 6. Section
120.004(b), Natural Resources Code, is amended to read as follows:
(b) The commission may not
issue a certificate of compliance for more than three clean energy
projects. Not more than one of the three clean energy projects may be a
natural gas project.
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No
equivalent provision.
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SECTION 10. The changes in
law made by this Act do not apply to a clean energy project that includes a
precombustion integrated gasification combined cycle technology with carbon
capture and was selected by the United States Department of Energy for a Clean
Coal Power Initiative award before February 1, 2010. A clean energy
project that includes a precombustion integrated gasification combined
cycle technology with carbon capture and was selected by the United States
Department of Energy for a Clean Coal Power Initiative award before
February 1, 2010, is governed by the law in effect immediately before the
effective date of this Act, and the former law is continued in effect for
that purpose.
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SECTION 7. 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, 2013.
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SECTION 11. Same as introduced
version.
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