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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 recycling of oil and gas |
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drill cuttings. |
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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 N to read as follows: |
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SUBCHAPTER N. TAX CREDIT FOR RECYCLING OIL AND GAS DRILL CUTTINGS |
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Sec. 171.701. DEFINITION. In this subchapter, "oil and gas |
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drill cuttings" means the soil, rock fragments, and pulverized |
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material that are removed from a borehole as a result of a drilling |
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process. |
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Sec. 171.702. ENTITLEMENT TO CREDIT. A taxable entity is |
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entitled to a credit in the amount and under the conditions and |
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limitations provided by this subchapter against the taxes imposed |
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by this chapter. |
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Sec. 171.703. QUALIFICATION. A taxable entity is entitled |
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to a credit under this subchapter if the taxable entity recycles oil |
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and gas drill cuttings. |
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Sec. 171.704. AMOUNT; LIMITATIONS. (a) The amount of the |
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credit is equal to 50 percent of the amount paid by the taxable |
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entity for energy consumed in connection with the recycling of oil |
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and gas drill cuttings. |
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(b) The credit claimed for each reporting period may not |
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exceed the amount of franchise tax due, after any other applicable |
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tax credits, for the period. |
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Sec. 171.705. CARRYFORWARD. (a) If a taxable entity is |
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eligible for a credit that exceeds the limitation under Section |
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171.704(b), the taxable entity may carry the unused credit forward |
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for not more than five consecutive reports. |
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(b) A carryforward is considered the remaining portion of a |
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credit that cannot be claimed in the current year because of the |
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limitation under Section 171.704(b). |
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Sec. 171.706. SALE OR ASSIGNMENT OF CREDIT. (a) A taxable |
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entity that has an unused, unexpired credit may sell or assign all |
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or part of the credit to one or more taxable entities, and any |
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taxable entity to which all or part of the credit is sold or |
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assigned may sell or assign all or part of the credit to another |
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taxable entity. There is no limit on the total number of |
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transactions for the sale or assignment of all or part of the |
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credit, however, collectively the claiming of a credit for a |
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period, including any transferred portion, is subject to the |
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limitation provided by Section 171.704(b). |
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(b) A taxable entity that sells or assigns a credit under |
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this section and the taxable entity to which the credit is sold or |
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assigned shall jointly submit written notice of the sale or |
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assignment to the comptroller on a form promulgated by the |
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comptroller not later than the 30th day after the date of the sale |
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or assignment. The notice must include: |
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(1) the date of the sale or assignment; |
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(2) the amount of the credit sold or assigned; |
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(3) the names and federal tax identification numbers |
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of the taxable entity that sold or assigned the credit or part of |
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the credit and the taxable entity to which the credit or part of the |
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credit was sold or assigned; and |
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(4) the amount of the credit owned by the selling or |
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assigning taxable entity before the sale or assignment, and the |
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amount the selling or assigning taxable entity retained, if any, |
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after the sale or assignment. |
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(c) The sale or assignment of a credit in accordance with |
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this section does not extend the period for which a credit may be |
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carried forward and does not increase the total amount of the credit |
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that may be claimed. |
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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, 2016. |