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A BILL TO BE ENTITLED
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AN ACT
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relating to the qualifications of certain electric generation |
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projects for programs designed to encourage the capture and |
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utilization of carbon dioxide for use in enhanced oil recovery. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 382.003(1-a), Health and Safety Code, is |
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amended to read as follows: |
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(1-a) "Advanced clean energy project" means a project |
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for which an application for a permit or for an authorization to use |
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a standard permit under this chapter is received by the commission |
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on or after January 1, 2008, and before January 1, 2020, and that: |
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(A) involves the use of coal, biomass, petroleum
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coke, solid waste, or fuel cells using hydrogen derived from such
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fuels, in the generation of electricity, or the creation of liquid |
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fuels outside of the existing fuel production infrastructure while |
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co-generating electricity, whether the project is implemented in |
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connection with the construction of a new facility or in connection |
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with the modification of an existing facility and whether the |
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project involves the entire emissions stream from the facility or |
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only a portion of the emissions stream from the facility; |
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(B) with regard to the portion of the emissions |
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stream from the facility that is associated with the project, is |
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capable of achieving: |
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(i) on an annual basis, a 99 percent or |
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greater reduction of sulfur dioxide emissions, or: |
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(a) if the project is designed for the |
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use of one or more combustion turbines, an emission rate that meets |
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best available control technology requirements as determined by the |
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commission; or |
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(b) if the project is designed for the |
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use of feedstock substantially all of which is subbituminous coal, |
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an emission rate of 0.04 pounds or less of sulfur dioxide per |
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million British thermal units as determined by a 30-day average; |
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(ii) on an annual basis a 95 percent or |
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greater reduction of mercury emissions, if applicable; |
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(iii) an annual average emission rate for |
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nitrogen oxides of: |
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(a) 0.05 pounds or less per million |
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British thermal units; or |
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(b) if the project uses gasification |
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technology, 0.034 pounds or less per million British thermal units; |
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and |
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(iv) an annual average emission rate for |
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filterable particulate matter of 0.015 pounds or less per million |
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British thermal units; and |
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(C) captures not less than 50 percent of the |
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carbon dioxide in the portion of the emissions stream from the |
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facility that is associated with the project and sequesters that |
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captured carbon dioxide by geologic storage or other means. |
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SECTION 2. Section 120.001(2), Natural Resources Code, is |
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amended to read as follows: |
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(2) "Clean energy project" means a project to |
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construct an coal-fueled or petroleum coke-fueled electric |
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generating facility, including a facility in which the fuel is |
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gasified before combustion, that will: |
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(A) have a capacity of at least 200 megawatts; |
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(B) meet the emissions profile for an advanced |
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clean energy project under Section 382.003(1-a)(B), Health and |
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Safety Code; |
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(C) capture at least 70 percent of the carbon |
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dioxide resulting from or associated with the generation of |
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electricity by the facility; |
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(D) be capable of permanently sequestering in a |
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geological formation the carbon dioxide captured; and |
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(E) be capable of supplying the carbon dioxide |
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captured for purposes of an enhanced oil recovery project. |
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SECTION 3. Subchapter H, Chapter 490, Government Code, |
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section 490.352 is amended to read as follows: |
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Sec. 490.352. FRANCHISE TAX CREDIT FOR CLEAN ENERGY |
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PROJECT. (a) The comptroller shall adopt rules for issuing to an |
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entity implementing a clean energy project in this state a |
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franchise tax credit. A clean energy project is eligible for a |
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franchise tax credit only if the project is implemented in |
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connection with the construction of a new facility. |
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(b) The comptroller shall issue a franchise tax credit to an |
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entity operating a clean energy project after: |
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(1) the Railroad Commission of Texas has issued a |
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certificate of compliance for the project to the entity as provided |
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by Section 120.004, Natural Resources Code; |
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(2) the construction of the project has been |
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completed; |
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(3) the electric generating facility associated with |
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the project is fully operational; |
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(4) the Bureau of Economic Geology of The University |
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of Texas at Austin verifies to the comptroller that the electric |
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generating facility associated with the project is sequestering at |
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least 70 percent of the carbon dioxide resulting from or associated |
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with the generation of electricity by the facility; and |
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(5) the owner or operator of the project has entered |
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into an interconnection agreement relating to the project with the |
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Electric Reliability Council of Texas. |
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(c) The total amount of the franchise tax credit that may be |
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issued to the entity designated in the certificate of compliance |
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for a clean energy project is equal to the lesser of: |
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(1) 10 percent of the total capital cost of the |
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project, including the cost of designing, engineering, permitting, |
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constructing, and commissioning the project, the cost of procuring |
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land, water, and equipment for the project, and all fees, taxes, and |
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commissions paid and other payments made in connection with the |
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project but excluding the cost of financing the capital cost of the |
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project; or |
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(2) $100 million. |
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(d) The entity designated in the certificate of compliance |
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for the project may assign the franchise tax credit to any other |
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entity that has or acquires an interest in the income generated by |
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the project in proportion to their ownership in the project. The
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amount of the franchise tax credit for each report year is
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calculated by determining the amount of franchise tax that is due
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based on the taxable margin generated by a clean energy project from
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the generation and sale of power and the sale of any products that
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are produced by the electric generation facility. The amount of the |
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franchise tax credit claimed under this section for a report year |
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may not exceed the amount of franchise tax due to the state from an |
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entity claiming the credit. attributable to the clean energy
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project for that report year. Any unused credit may be carried |
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forward for up to 20 years. |
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(e) The comptroller may not issue a franchise tax credit |
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under this section before September 1, 20183 or while a valuation |
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cap agreement under Chapter 313, Tax Code is in effect for the |
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project. This subsection expires September 2, 2013.
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SECTION 4. The Texas Commission on Environmental Quality |
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shall adopt rules as necessary to implement Section 382.003, Health |
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and Safety Code, as amended by this Act, not later than January 1, |
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2014. |
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SECTION 5. The Railroad Commission of Texas may adopt rules |
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as necessary to implement section 120.001(2), Natural Resources |
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Code, as amended by this Act. |
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SECTION 6. The comptroller shall adopt rules under Section |
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490.352, Government Code, as added by this Act, not later than |
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January 1, 2014. |
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SECTION 7. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2013. |