H.B. No. 4044 amends Section 172.102(b) of the Texas Tax Code to include public institutions of higher education and university systems as eligible entities for certain tax credits related to costs and expenses incurred. Specifically, the bill adds language to state that the depreciation and tax-exempt use provisions of Section 47(c)(2) of the Internal Revenue Code do not apply to costs incurred by these educational institutions, provided that other provisions of Section 47(c)(2) are satisfied. This change is set to take effect on January 1, 2026, with a provision that the new eligibility applies only to costs incurred on or after the effective date.

Additionally, the bill establishes a future amendment to Section 172.102(b) that will take effect on January 1, 2035, which will remove the inclusion of public institutions of higher education and university systems from the tax-exempt provisions, reverting to the original language that excludes only entities exempted from federal income tax under Section 501(a). This phased approach allows for a transitional period where educational institutions can benefit from the tax credits before the provisions change again in 2035.

Statutes affected:
Introduced: Tax Code 172.102 (Tax Code 172)
House Committee Report: Tax Code 172.102 (Tax Code 172)
Engrossed: Tax Code 172.102 (Tax Code 172)
Senate Committee Report: Tax Code 172.102 (Tax Code 172)
Enrolled: Tax Code 172.102 (Tax Code 172)