85R3033 CBH-F     By: Bohac H.B. No. 1621       A BILL TO BE ENTITLED   AN ACT   relating to the transfer of certain unused franchise tax credits.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 18, Chapter 1 (H.B. 3), Acts of the 79th   Legislature, 3rd Called Session, 2006, is amended by adding   Subsections (h), (i), (j), (j-1), and (k) to read as follows:          (h)  In this subsection and Subsection (i) of this section,   "transfer" includes a sale. Notwithstanding Subsections (e) and (f)   of this section, a corporation that had unused credits before   January 1, 2008, under former Subchapter P or Q, Chapter 171, Tax   Code, that expired under the terms of one of those former   subchapters or under Subsection (e) or (f) of this section, may   transfer the right to all or part of the expired credits to another   taxpayer of this state. The taxpayer to whom a credit is transferred   may apply the credit only as provided by Subsections (j) and (j-1)   of this section. To be eligible to transfer all or part of the   credits, the corporation must obtain a certificate of transfer of   credit from the comptroller for the amount of the credits to be   transferred. Not later than the 30th day after the date of the   transfer, the corporation must submit to the comptroller a notice   of the transfer in a form prescribed by the comptroller. The notice   must be accompanied by a copy of the certificate of transfer issued   by the comptroller and specify:                (1)  the number on the certificate of transfer;                (2)  the amount of the corporation's unused credits   preceding the transfer;                (3)  the date of the transfer;                (4)  the total amount of credits transferred;                (5)  the tax identification numbers of the corporation   and the taxpayer to which the credit was transferred;                (6)  the corporation's remaining amount of unused   credits after the transfer; and                (7)  any other information the comptroller requires.          (i)  The transfer of a credit under Subsection (h) of this   section is limited to an unused credit for which the corporation was   eligible before January 1, 2008, and does not include credits   authorized under former Subchapter Q-1, Chapter 171, Tax Code, or   credits that were created under the terms of a written agreement   between a taxpayer and the Texas Department of Economic Development   or its successor that was entered into before June 1, 2006, and that   continue to accrue under the terms provided by Section 19 of this   Act. Subject to Subsection (j-1) of this section, the transferee of   a credit under this section obtains the credit subject to the same   rights and privileges as the transferor had on the date the credit   was originally established. If a corporation transfers a credit   that the corporation was not entitled to transfer at the time of the   transfer:                (1)  the taxpayer to which the credit was transferred   may pursue any remedy authorized by law against the corporation and   may not pursue any remedy against the comptroller or this state; and                (2)  the comptroller or Texas Workforce Commission, as   appropriate:                      (A)  may not allow the taxpayer to which the   credit was transferred to apply the credit on a report for a tax or   contribution listed in Subsection (j) of this section; or                      (B)  shall recover from the taxpayer the amount of   the credit the taxpayer claims on a report using any means   authorized by law.          (j)  Subject to Subsection (j-1) of this section, a taxpayer   to which a credit is transferred under Subsection (h) of this   section may apply the credit against:                (1)  the taxes due under Chapters 151, 152, 154, 155,   156, 158, 160, 162, 171, 181, 182, 183, 191, 201, and 202, Tax Code;                (2)  the occupation taxes due under Title 3, Insurance   Code; and                (3)  a contribution due under Subtitle A, Title 4,   Labor Code.          (j-1)  A taxpayer to which a credit is transferred under   Subsection (h) of this section may apply the credit only:                (1)  on or with a franchise tax report covering a period   for which the transferring corporation would have been entitled to   apply the transferred credit under Subsection (e) or (f) of this   section, as appropriate, in the absence of a limitation on the   amount of the credit for that period; and                (2)  in relation to occupation taxes imposed under   Title 3, Insurance Code, or other taxes and contributions paid to   this state, during a period for which the transferring corporation   would have been entitled to apply the transferred credit under   Subsection (e) or (f) of this section, as appropriate, in the   absence of a limitation on the amount of the credit for that period.          (k)  A taxpayer to which an unused tax credit is transferred   under Subsection (h) of this section may not apply the credit after   August 31, 2019.          SECTION 2.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2017.