Relating to a franchise tax credit for certain watershed protection activities.

89(R) HB 3830 - House Committee Report version - Bill Text

89R14895 CJD-F

By: Curry

H.B. No. 3830

A BILL TO BE ENTITLED

AN ACT

relating to a franchise tax credit for certain watershed protection

activities.

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 CERTAIN WATERSHED PROTECTION

ACTIVITIES

Sec. 171.701. DEFINITIONS. In this subchapter:

(1)

"Agricultural waste" has the meaning assigned by

Section 26.001, Water Code.

(2)

"Concentrated animal feeding operation" has the

meaning assigned by 30 T.A.C. Section 321.32 on the effective date

of this subchapter.

(3)

"Major sole source impairment zone" has the

meaning assigned by Section 26.502, Water Code.

Sec.

171.702.

ELIGIBILITY FOR CREDIT. A taxable entity is

eligible for a credit against the tax imposed under this chapter in

the amount and under the conditions provided by this subchapter.

Sec.

171.703.

QUALIFICATION. A taxable entity qualifies

for a credit under this subchapter if during the period covered by a

report the taxable entity:

(1) operates a concentrated animal feeding operation:

(A)

under a permit issued under Subchapter L,

Chapter 26, Water Code; and

(B)

that is located in a major sole source

impairment zone; and

(2)

transports agricultural waste outside of the major

sole source impairment zone for disposal, use, or application to a

waste management unit or waste application field located outside of

the zone.

Sec.

171.704.

AMOUNT OF CREDIT; LIMITATION. (a) Subject to

Subsection (b), the amount of credit for a report is equal to the

total costs of fuel, labor, and equipment used to transport waste as

described by Section 171.703(2) during the period covered by the

report.

(b)

The total credit for a report, including the amount of

any carryforward under Section 171.705, may not exceed 50 percent

of the franchise tax due for the report after all other applicable

tax credits.

Sec.

171.705.

CARRYFORWARD. (a) A taxable entity that is

eligible for a credit that exceeds the limitation under Section

171.704(b) may carry the unused credit forward for not more than 10

consecutive reports.

(b)

Credits, including credit carryforwards, are considered

to be used in the following order:

(1) a credit carryforward under this subchapter; and

(2)

a credit for the period on which the report is

based.

Sec.

171.706.

ASSIGNMENT PROHIBITED; EXCEPTION. A taxable

entity may not convey, assign, or transfer the credit allowed under

this subchapter to another entity unless substantially all of the

assets of the taxable entity are conveyed, assigned, or transferred

in the same transaction.

Sec.

171.707.

APPLICATION FOR CREDIT. 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 and submit any

information requested by the comptroller to determine the entity's

eligibility for the credit or the amount of the credit.

Sec.

171.708.

RULES. The comptroller shall adopt rules and

forms necessary to implement this subchapter.

Sec.

171.709.

REPORTING OF ESTIMATES AND COLLECTION OF

INFORMATION. (a) Before the beginning of each regular session of

the legislature, the comptroller shall submit to the legislature

and the governor an estimate for the preceding fiscal biennium of:

(1)

the total number of taxable entities that applied

for a credit under this subchapter;

(2)

the total amount of credits received under this

subchapter; and

(3)

the total amount of credits carried forward under

Section 171.705.

(b)

The comptroller shall provide the estimate required by

this section as part of the report required by Section 403.014,

Government Code.

Sec.

171.710.

EXPIRATION; EXCEPTION. (a) This subchapter

expires December 31, 2035.

(b)

The expiration of this subchapter does not affect the

carryforward of a credit under Section 171.705 or a credit for which

an entity applies after the date this subchapter expires based on a

cost for which a taxable entity became eligible for a credit before

that date.

SECTION 2. Subchapter N, Chapter 171, Tax Code, as added by

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, 2026.