Bill Text: TX HB3566 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to a franchise credit for entities that make certain railroad reconstruction or replacement expenditures.
Spectrum: Partisan Bill (Republican 8-0)
Status: (Introduced - Dead) 2017-03-30 - Referred to Ways & Means [HB3566 Detail]
Download: Texas-2017-HB3566-Introduced.html
85R13318 GRM-D | ||
By: Ashby | H.B. No. 3566 |
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relating to a franchise credit for entities that make certain | ||
railroad reconstruction or replacement expenditures. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 171, Tax Code, is amended by adding | ||
Subchapter U-1 to read as follows: | ||
SUBCHAPTER U-1. TAX CREDIT FOR QUALIFIED RAILROAD RECONSTRUCTION OR | ||
REPLACEMENT EXPENDITURES | ||
Sec. 171.9231. DEFINITIONS. In this subchapter: | ||
(1) "Class II railroad" and "class III railroad" have | ||
the meanings assigned by the United States Surface Transportation | ||
Board. | ||
(2) "Qualified railroad expenditure" means an amount | ||
spent by a taxable entity that is a class II railroad or class III | ||
railroad: | ||
(A) to reconstruct or replace railroad | ||
infrastructure that was owned or leased by the taxable entity on | ||
January 1, 2017, including a track, a roadbed, a bridge, an | ||
industrial lead, or another track-related structure; or | ||
(B) for new construction of an industrial lead, | ||
switch, spur, or siding or extension of existing siding. | ||
Sec. 171.9232. 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. 171.9233. QUALIFICATION. A taxable entity qualifies | ||
for a credit under this subchapter if the taxable entity makes a | ||
qualified railroad expenditure. | ||
Sec. 171.9234. AMOUNT; LIMITATIONS. (a) Subject to | ||
Subsection (b), the amount of the credit for a report is equal to | ||
the lesser of: | ||
(1) 50 percent of the taxable entity's qualified | ||
railroad expenditures during the accounting period on which the | ||
report is based; or | ||
(2) the product of $3,500 and the number of miles of | ||
railroad track owned or leased in this state by the entity on the | ||
last day of the accounting period on which the report is based. | ||
(b) The total credit claimed for a report, including the | ||
amount of any carryforward under Section 171.9235, may not exceed | ||
the amount of franchise tax due for the report after any other | ||
applicable tax credits. | ||
Sec. 171.9235. CARRYFORWARD. (a) If a taxable entity is | ||
eligible for a credit that exceeds the limitation under Section | ||
171.9234(b), the taxable entity may carry the unused credit forward | ||
for not more than five consecutive reports. | ||
(b) A carryforward is considered the remaining portion of a | ||
credit that cannot be claimed in the current year because of the | ||
limitation under Section 171.9234(b). A carryforward is added to | ||
the next year's credit in determining whether the limitation is met | ||
for that year. A credit carryforward from a previous report is | ||
considered to be used before the current year credit. | ||
Sec. 171.9236. 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. | ||
Sec. 171.9237. SALE OR ASSIGNMENT OF CREDIT. (a) A taxable | ||
entity that makes qualified railroad expenditures may sell or | ||
assign all or part of the credit that may be claimed for those | ||
expenditures to one or more taxable entities, and any taxable | ||
entity to which all or part of the credit is sold or assigned may | ||
sell or assign all or part of the credit to another taxable entity. | ||
There is no limit on the total number of transactions for the sale | ||
or assignment of all or part of the total credit authorized under | ||
this subchapter. | ||
(b) A taxable entity that sells or assigns a credit under | ||
this section and the taxable entity to which the credit is sold or | ||
assigned shall jointly submit written notice of the sale or | ||
assignment to the comptroller not later than the 30th day after the | ||
date of the sale or assignment. The notice must include: | ||
(1) the date on which the credit was originally | ||
established; | ||
(2) the date of the sale or assignment; | ||
(3) the amount of the credit sold or assigned and the | ||
remaining period during which it may be used; | ||
(4) the names, addresses, and federal tax | ||
identification numbers of the taxable entity that sold or assigned | ||
the credit or part of the credit and the taxable entity to which the | ||
credit or part of the credit was sold or assigned; and | ||
(5) the amount of the credit owned by the selling or | ||
assigning taxable entity before the sale or assignment, and the | ||
amount the selling or assigning taxable entity retained, if any, | ||
after the sale or assignment. | ||
(c) The sale or assignment of a credit in accordance with | ||
this section does not extend the period for which a credit may be | ||
carried forward. | ||
Sec. 171.9238. RULES. (a) Except as provided by Subsection | ||
(b), the comptroller shall adopt rules necessary to implement this | ||
subchapter. | ||
(b) The Texas Department of Transportation shall adopt | ||
rules to verify qualified railroad expenditures and allow taxable | ||
entities to obtain preapproval that a proposed expenditure will | ||
qualify as a qualified railroad expenditure. | ||
SECTION 2. This Act applies only to a report originally due | ||
under Chapter 171, Tax Code, on or after the effective date of this | ||
Act. | ||
SECTION 3. This Act takes effect January 1, 2018. |