HB5120 - Relating to a franchise tax credit for taxable entities that construct a nuclear project.

  89R15900 BEF-D     By: Harris H.B. No. 5120       A BILL TO BE ENTITLED   AN ACT   relating to a franchise tax credit for taxable entities that   construct a nuclear project.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 171, Tax Code, is amended by adding   Subchapter N to read as follows:   SUBCHAPTER N. TAX CREDIT FOR CONSTRUCTION OF NUCLEAR PROJECT           Sec.   171.701.     DEFINITION. In this subchapter, "nuclear   project" includes a:                 (1)  nuclear power generation site or facility;                 (2)  nuclear reactor;                 (3)  nuclear reactor manufacturing facility;                 (4)     facility for reprocessing or recycling nuclear   fuel; and                 (5)  facility for enriching uranium.           Sec.   171.702.     ENTITLEMENT TO CREDIT. A taxable entity is   entitled to a credit in the amount and under the conditions provided   by this subchapter against the tax imposed under this chapter.           Sec.   171.703.     QUALIFICATION. A taxable entity qualifies   for a credit under this subchapter if the taxable entity owns a   nuclear project that is first placed in service during the period on   which the report is based.           Sec.   171.704.     AMOUNT OF CREDIT; LIMITATION. (a) Subject to   Subsection (b), the amount of the credit a taxable entity may claim   on a report is equal to the lesser of:                 (1)     10 percent of the taxable entity's costs to   construct and place in service the nuclear project; or                 (2)  $250 million.           (b)     The total credit claimed on a report, including the   amount of any carryforward under Section 171.705, may not exceed   the amount of franchise tax due for the report after applying all   other applicable credits.           Sec.   171.705.     CARRYFORWARD. (a) If a taxable entity is   eligible for a credit that exceeds the limitation under Section   171.704(b), the entity may carry the unused credit forward for not   more than 25 consecutive reports.           (b)     A carryforward is considered the remaining portion of a   credit that cannot be claimed on a report because of the limitation   under Section 171.704(b).           (c)     Credits, including a carryforward, are considered to be   used in the following order:                 (1)  a carryforward under this section; and                 (2)     a credit for the period on which the report is   based.           Sec.   171.706.     APPLICATION FOR CREDIT. (a) A taxable entity   must apply for a credit under this subchapter on or with the report   for the period for which the credit is claimed.           (b)     A taxable entity must apply for the credit in the manner   prescribed by the comptroller and include with the application any   information requested by the comptroller to determine whether the   entity is eligible for the credit under this subchapter.           Sec.   171.707.     ASSIGNMENT PROHIBITED; EXCEPTION. A taxable   entity may not convey, assign, or transfer the credit allowed under   this subchapter to another taxable entity unless substantially all   of the assets of the taxable entity are conveyed, assigned, or   transferred in the same transaction.           Sec.   171.708.     RULES. The comptroller shall adopt rules   necessary to implement and administer this subchapter.          SECTION 2.  Subchapter N, Chapter 171, Tax Code, as added by   this Act, applies only to a report originally due on or after   January 1, 2026.          SECTION 3.  This Act takes effect January 1, 2026.