By: Hilderbran H.B. No. 3111
A BILL TO BE ENTITLED
AN ACT
relating to a tax credit for eligible costs and expenses incurred
during the rehabilitation of a historic structure located in a
severely damaged or flooded census tract:
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter [__]
to read as follows:
SUBCHAPTER [__]. CREDIT FOR REHABILITATION OF A HISTORIC STRUCTURE
Sec. 171.[__]. DEFINITIONS. In this subchapter:
(1) "Commission" means the Texas Historical
Commission.
(2) "Eligible costs and expenses" means qualified
rehabilitation expenditures as defined in Section 47(c)(2)(A) of
the Internal Revenue Code of 1986, as amended, except that
"substantially rehabilitated" shall mean that the qualified
rehabilitation expenditures must exceed five thousand dollars.
Sec. 171.[__]. CREDIT.
(a) There shall be allowed a credit against the tax imposed
under this Chapter 171, Franchise Tax, in an amount equal to
twenty-five percent (25%) of the eligible costs and expenses
incurred during the rehabilitation of a historic structure.
(b) The credit is earned by the entity that owns the
historic structure in the year in which the property attributable
to the eligible costs and expenses is placed in service.
(c) In order to qualify for the credit, the historic
structure must be listed on the National Register of Historic
Places or be certified by the commission as contributing to the
historical significance of the census tract or the state.
Sec. 171.[__]. CERTIFICATION
(a) Prior to any credit being claimed or assigned, the
commission shall have issued a tax credit certificate providing for
the amount of eligible costs and expenses incurred during the
rehabilitation of a historic structure.
(b) In order to issue a tax credit certificate, the
commission shall, at a minimum, be provided with the following:
(1) an audited cost report issued by a public
accountant licensed in this state itemizing and confirming the
amounts of eligible costs and expenses incurred during the
rehabilitation of the historic structure; and
(2) evidence that the historic structure has been
placed into service.
(c) In issuing the tax credit certificate, the commission
may rely, without independent investigation, upon the audited cost
report.
Sec. 171.[__]. LIMITATIONS; CARRYFORWARD.
(a) The total credit claimed under this subchapter for a
report, including the amount of any carryforward credit under
Section 171.[__](b), may not exceed the franchise tax due after any
other applicable credits.
(b) If total credit exceeds the limitation under Section
171.[__](a), such excess credit may be carried forward for not more
than five consecutive reports.
Sec. 171.[__]. ASSIGNMENT; ALLOCATION.
(a) Any entity earning credits, as well as any subsequent
assignees of such credits, shall be permitted to sell or assign all
or any portion of such credit, and shall not be required to claim
such credits, subject to the following conditions:
(1) A sale or assignment may involve one or more
transferees and may take place on one or more dates.
(2) The credits may only be sold or assigned three
times.
(3) The sale or assignment of the credit does not
extend the carryforward period of the credit.
(4) Assignors and assignees shall submit to the
commission a written notification of any sale or assignment of
credits within thirty days after the sale or assignment of such
credits, which notification shall include: the date of the sale or
assignment; the amount of credits sold or assigned; the name and
federal tax identification number of the assignor and each
assignee; the assignor's credit balance with respect to a
particular historic structure prior to the sale or assignment, and
the assignor's remaining credit balance with respect to a
particular historic structure after the sale or assignment.
(b) Credits earned by, or assigned to, a partnership,
limited liability company, S-corporation, or other similar
pass-through entity shall be allocated among some or all of the
partners, members, or shareholders in any manner agreed to by such
partners, members, or shareholders which can be without regard to
such partners', members', or shareholders' membership or ownership
interest.
SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter [__] to read as follows:
SUBCHAPTER [__]. CREDIT FOR REHABILITATION OF A HISTORIC STRUCTURE
Sec. [__].[__]. DEFINITIONS. In this subchapter:
(1) "Commission" means the Texas Historical
Commission.
(2) "Eligible costs and expenses" means qualified
rehabilitation expenditures as defined in Section 47(c)(2)(A) of
the Internal Revenue Code of 1986, as amended, except that
"substantially rehabilitated" shall mean that the qualified
rehabilitation expenditures must exceed five thousand dollars.
(3) "State premium tax liability" means any liability
incurred by an entity under Chapters 221 through 226.
Sec. [__].[__]. CREDIT.
(a) There shall be allowed a credit against state premium
tax liability in an amount equal to twenty-five percent (25%) of the
eligible costs and expenses incurred during the rehabilitation of a
historic structure.
(b) The credit is earned by the entity that owns the
historic structure in the year in which the property attributable
to the eligible costs and expenses is placed in service.
(c) In order to qualify for the credit, the historic
structure must be listed on the National Register of Historic
Places or be certified by the commission as contributing to the
historical significance of the census tract or the state.
Sec. [__].[__]. CERTIFICATION
(a) Prior to any credit being claimed or assigned, the
commission shall have issued a tax credit certificate providing for
the amount of eligible costs and expenses incurred during the
rehabilitation of a historic structure.
(b) In order to issue a tax credit certificate, the
commission shall, at a minimum, be provided with the following:
(1) an audited cost report issued by a public
accountant licensed in this state itemizing and confirming the
amounts of eligible costs and expenses incurred during the
rehabilitation of the historic structure; and
(2) evidence that the historic structure has been
placed into service.
(c) In issuing the tax credit certificate, the commission
may rely, without independent investigation, upon the audited cost
report.
Sec. [__].[__]. LIMITATIONS; CARRYFORWARD.
(a) The total credit claimed under this subchapter for a
report, including the amount of any carryforward credit under
Section [__].[__](b), may not exceed the state premium tax
liability due after any other applicable credits.
(b) If total credit exceeds the limitation under Section
[__].[__](a), such excess credit may be carried forward for not
more than five consecutive reports.
Sec. [__].[__]. ASSIGNMENT; ALLOCATION.
(a) Any entity earning credits, as well as any subsequent
assignees of such credits, shall be permitted to sell or assign all
or any portion of such credit, and shall not be required to claim
such credits, subject to the following conditions:
(1) A sale or assignment may involve one or more
transferees and may take place on one or more dates.
(2) The credits may only be sold or assigned three
times.
(3) The sale or assignment of the credit does not
extend the carryforward period of the credit.
(4) Assignors and assignees shall submit to the
commission a written notification of any sale or assignment of
credits within thirty days after the sale or assignment of such
credits, which notification shall include: the date of the sale or
assignment; the amount of credits sold or assigned; the name and
federal tax identification number of the assignor and each
assignee; the assignor's credit balance with respect to a
particular historic structure prior to the sale or assignment, and
the assignor's remaining credit balance with respect to a
particular historic structure after the sale or assignment.
(b) Credits earned by, or assigned to, a partnership,
limited liability company, S-corporation, or other similar
pass-through entity shall be allocated among some or all of the
partners, members, or shareholders in any manner agreed to by such
partners, members, or shareholders which can be without regard to
such partners', members', or shareholders' membership or ownership
interest.
Sec. [__].[__]. RETALIATORY TAX. Any entity claiming a
credit against state premium tax liability is not required to pay
any additional retaliatory tax levied under Chapter 281 as a result
of claiming the credit.
SECTION 3. 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, 2013.