Hydrogen Vehicle Tax Break Covers Some Natural Gas Vehicles Too

The text as introduced · 465 words

By: McLaughlin
H.B. No. 5600

A BILL TO BE ENTITLED

AN ACT

relating to the development and expansion of clean hydrogen

production, distribution, and utilization in this state.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 490J, Government Code, is added to read

as follows:

Sec. 490J.001. CLEAN HYDROGEN DEVELOPMENT FUND. (a) The

Clean Hydrogen Development Fund is established as a special fund in

the state treasury to finance clean hydrogen projects.

(b) The fund shall be administered by the comptroller in

consultation with the Texas Commission on Environmental Quality and

the Texas Railroad Commission.

(c) Money in the fund may be used to provide:

(1) low interest loans for hydrogen infrastructure and

production facilities;

(2) state-backed bonds for the financing of hydrogen

projects; or

(3) state grants for hydrogen electrolyzer

manufacturing in this state.

(d) The fund may accept federal grants, private donations,

and legislative appropriations.

SECTION 2. Subchapter L, Chapter 171, Tax Code, is amended

by adding Section 171.603 to read as follows:

Sec. 171.603. CLEAN HYDROGEN TAX INCENTIVES. (a) A person

or business entity that constructs or operates a clean hydrogen

production facility in this state may be eligible for a state tax

credit.

(b) The credit shall be equivalent to 20 percent of

qualified capital expenditures related to hydrogen production,

transport, or storage.

(c) A manufacturer of hydrogen electrolyzers relocating to

Texas from out of state shall receive:

(1) a 10-year franchise tax exemption; and

(2) a sales tax exemption on equipment purchases used

in manufacturing.

(d) The comptroller shall adopt rules necessary for

implementation, including reporting requirements to track economic

impact.

SECTION 3. Chapter 502, Transportation Code, is amended by

adding Section 502.257 to read as follows:

Sec. 502.257. TEMPORARY HIGHWAY TAX RELIEF FOR HYDROGEN

VEHICLES. (a) Hydrogen-powered vehicles, including hydrogen

internal combustion engine and fuel cell vehicles, shall be exempt

from state highway use taxes for ten years or until cost parity with

conventional energy sources is reached, as determined by the Texas

Commission on Environmental Quality.

(b) The exemption applies to commercial trucking, rail,

shipping, and aviation operators.

SECTION 4. Chapter 136, Education Code, is amended by

adding Section 136.008 to read as follows:

Sec. 136.008. WORKFORCE DEVELOPMENT INITIATIVES. (a) The

Texas Workforce Development Commission shall establish

partnerships with universities, technical schools, or community

colleges to provide specialized training for hydrogen sector jobs.

(b) The Workforce Commission may provide grants to

educational institutions to develop curriculum and certification

programs for hydrogen technology.

SECTION 5. 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, 2025.