Legislative incentives update

Incentives Phases Bills Project Timeline Grants HB 1796 (2009) (Rep. Chisum/Sen. Watson): “New Technology Grant Program” initially proposed in SB 16 (Sen. Averitt/Rep. Cook), funded by Texas Emission Reduction Program (TERP). “Advanced Clean Energy Projects” specifically referenced as eligible for funding. HB 4586 (2009) (Rep. Pitts/Sen. Ogden): Supplemental appropriation bill authorizing Governor’s office to award emerging technology funds to ACEPs

Incentives Phases Bills Project Timeline Liability/Ownership Clarification SB 1387 (2009) (Sen. Seliger/Rep. Crownover): Anthropogenic carbon dioxide stored in a geologic storage facility is considered to be the property of the storage operator. Absent a final judgment of willful abandonment anthropogenic carbon dioxide stored in a geologic storage facility is not considered owned by the surface or mineral estate owner Clear Regulatory Framework SB 1387 (2009): Railroad Commission of Texas: Wells completed in reservoirs (1) initially or currently productive of oil, gas, or geothermal resources or (2) completed in reservoirs adjacent to same (conversion allowed) SB 1387 (2009): Texas Commission on Environmental Quality: Water Code reverts jurisdiction of all other injection wells back to TCEQ e.g., storage projects in brine/nonproductive reservoirs) Time-Certain Permitting HB 3732 (2007) (Rep. Hardcastle/Sen. Averitt): Technical Review is capped at 9 months; Hearing process is capped at 9 months; 3-month extension if TCEQ finds extraordinary burden on docket from multiple applications

Incentives Phases Bills Project Timeline Franchise Tax Credits Up to 3 projects get $100 million franchise tax credit. Credit may not exceed in any year the amount of franchise tax attributable to the CEP that year. Railroad Commission certifies eligibility to Comptroller. Bureau of Economic Geology (BEG) verifies sequestration and must be paid fee for services. Interconnection agreement with the Electric Reliability Council of Texas (ERCOT) required. Grants HB 1796 (2009) (Rep. Chisum/Sen. Watson): “ New Technology Grant Program” initially proposed in SB 16 (Sen. Averitt/Rep. Cook), funded by Texas Emission Reduction Program (TERP). “Advanced Clean Energy Projects” specifically referenced as eligible for funding. HB 4586 (2009) (Rep. Pitts/Sen. Ogden): Supplemental appropriation bill authorizing Governor’s office to award emerging technology funds to ACEPs

Incentives Phases Bills Project Timeline Sales Tax Exemptions Clarifies sales tax-exempt status of carbon capture, transportation & injection equipment. Applies only to CO2 captured from man-made “ emissions” source. Requires CO2 to be sequestered using “ permanence” standard of severance tax exemption. Implements recommendation in Governor’s Competitiveness Council/Energy Report. Property Tax Abatement Local property tax abatements – Tax Code Chapter 312 • HB 3896 (2009) (Rep. Oliveira/Sen. Seliger): Extends authority 10 years, until September 1, 2019; clarifies eligibility of property on leased land; clarifies that deferrals are available to better fit the timelines of longer, more complex projects like clean carbon facilities (similar to nuclear provisions). Local Property tax abatements – Tax Code Chapter 313 value cap agreements • HB 3732 (2007) & HB 2994 (2007) (Rep. Bonnen/Sen. Hegar): ACEPs and IGCC eligible for value cap agreements. • HB 3676 (2009) (Rep. Joe Heflin/Sen. Seliger): Extends Texas Economic Development Act until December 31, 2014; clarifies eligibility of property on leased land. HB 3676 & HB 469 (2009) (Rep. King/Sen. Seliger 2009): Adjusts time periods for ACEPs to better fit the timelines of more complex projects like clean coal facilities

Incentives Phases Bills Project Timeline Franchise Tax Credits Up to 3 projects get $100 million franchise tax credit. Credit may not exceed in any year the amount of franchise tax attributable to the CEP that year. Railroad Commission certifies eligibility to Comptroller. Bureau of Economic Geology (BEG) verifies sequestration and must be paid fee for services. Interconnection agreement with the Electric Reliability Council of Texas (ERCOT) required. Severance Tax Exemptions HB 3732 (2007): Created a 75% tax exemption for oil recovered using man-made CO 2 -EOR. HB 469 (2009) (Rep. King/Sen. Seliger): Extended the term from 7 to 30 years for all projects. Will help spur early-mover CCS projects and establish transportation infrastructure projects Gross Receipts Tax Exemptions Sales of electricity generated from ACEPs exempt from gross receipts tax. This will create a roughly 2% discount in the prices of power generated by these facilities. Texas utilities currently pay over $320 million per year in gross receipts tax.

Legislative incentives update

by Central Texas Regional Mobility Authority on Oct 05, 2010

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Legislative incentives update — Presentation Transcript