Texas 2021 - 87th Regular

Texas House Bill HB4326 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R6534 SMT-D
2	2	By: Hefner H.B. No. 4326
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the insurance premium tax credit for the certified
8	8	rehabilitation of certified historic structures.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle B, Title 3, Insurance Code, is amended
11	11	by adding Chapter 231 to read as follows:
12	12	CHAPTER 231. PREMIUM TAX CREDIT FOR CERTIFIED REHABILITATION OF
13	13	CERTIFIED HISTORIC STRUCTURES
14	14	Sec. 231.0001. DEFINITIONS. In this chapter:
15	15	(1) "Certified historic structure" means a property in
16	16	this state that is:
17	17	(A) listed individually in the National Register
18	18	of Historic Places;
19	19	(B) designated as a Recorded Texas Historic
20	20	Landmark under Section 442.006, Government Code, or as a state
21	21	archeological landmark under Chapter 191, Natural Resources Code;
22	22	or
23	23	(C) certified by the commission as contributing
24	24	to the historic significance of:
25	25	(i) a historic district listed in the
26	26	National Register of Historic Places; or
27	27	(ii) a local district certified by the
28	28	United States Department of the Interior in accordance with 36
29	29	C.F.R. Section 67.9.
30	30	(2) "Certified rehabilitation" means the
31	31	rehabilitation of a certified historic structure that the
32	32	commission has certified as meeting the United States secretary of
33	33	the interior's Standards for Rehabilitation as defined in 36 C.F.R.
34	34	Section 67.7.
35	35	(3) "Commission" means the Texas Historical
36	36	Commission.
37	37	(4) "Eligible costs and expenses" means qualified
38	38	rehabilitation expenditures as defined by Section 47(c)(2),
39	39	Internal Revenue Code of 1986, except that the depreciation and
40	40	tax-exempt use provisions of that section do not apply to costs and
41	41	expenses incurred by a federal tax-exempt organization, and those
42	42	costs and expenses are eligible costs and expenses if the other
43	43	provisions of Section 47(c)(2), Internal Revenue Code of 1986, are
44	44	satisfied.
45	45	(5) "Federal tax-exempt organization" means an entity
46	46	exempted from the federal income tax under Section 501(a), Internal
47	47	Revenue Code of 1986.
48	48	(6) "State premium tax liability" means any liability
49	49	incurred by an entity under Chapter 221, 222, 223, or 224.
50	50	Sec. 231.0002. ELIGIBILITY FOR CREDIT. An entity is
51	51	eligible to apply for a credit against state premium tax liability
52	52	in the amount and under the conditions provided by this chapter.
53	53	Sec. 231.0003. QUALIFICATION. An entity is eligible for a
54	54	credit for eligible costs and expenses incurred in the certified
55	55	rehabilitation of a certified historic structure as provided by
56	56	this chapter if:
57	57	(1) the rehabilitated certified historic structure is
58	58	placed in service on or after September 1, 2021;
59	59	(2) the entity has an ownership interest in the
60	60	certified historic structure in the year during which the structure
61	61	is placed in service after the rehabilitation; and
62	62	(3) the total amount of the eligible costs and
63	63	expenses incurred exceeds $5,000.
64	64	Sec. 231.0004. CERTIFICATION OF ELIGIBILITY. (a) Before
65	65	claiming, selling, or assigning a credit under this chapter, the
66	66	entity that incurred the eligible costs and expenses in the
67	67	rehabilitation of a certified historic structure must request from
68	68	the commission a certificate of eligibility on which the commission
69	69	certifies that the work performed meets the definition of a
70	70	certified rehabilitation. The entity must include with the
71	71	entity's request:
72	72	(1) information on the property that is sufficient for
73	73	the commission to determine whether the property meets the
74	74	definition of a certified historic structure; and
75	75	(2) information on the rehabilitation, and
76	76	photographs before and after work is performed, sufficient for the
77	77	commission to determine whether the rehabilitation meets the United
78	78	States secretary of the interior's Standards for Rehabilitation as
79	79	defined in 36 C.F.R. Section 67.7.
80	80	(b) The commission shall issue a certificate of eligibility
81	81	to an entity that has incurred eligible costs and expenses as
82	82	provided by this chapter. The certificate must:
83	83	(1) confirm that:
84	84	(A) the property to which the eligible costs and
85	85	expenses relate is a certified historic structure; and
86	86	(B) the rehabilitation qualifies as a certified
87	87	rehabilitation; and
88	88	(2) specify the date the certified historic structure
89	89	was first placed in service after the rehabilitation.
90	90	(c) The entity must forward the certificate of eligibility
91	91	and the following documentation to the comptroller to claim the
92	92	credit:
93	93	(1) an audited cost report issued by a certified
94	94	public accountant, as defined by Section 901.002, Occupations Code,
95	95	that itemizes the eligible costs and expenses incurred in the
96	96	certified rehabilitation of the certified historic structure by the
97	97	entity;
98	98	(2) the date the certified historic structure was
99	99	first placed in service after the rehabilitation and evidence of
100	100	that placement in service; and
101	101	(3) an attestation of the total eligible costs and
102	102	expenses incurred by the entity on the rehabilitation of the
103	103	certified historic structure.
104	104	(d) For purposes of approving the credit under Subsection
105	105	(c), the comptroller may rely on the audited cost report provided by
106	106	the entity that requested the credit.
107	107	(e) An entity that sells or assigns a credit under this
108	108	chapter to another entity shall provide a copy of the certificate of
109	109	eligibility, together with the audited cost report, to the
110	110	purchaser or assignee.
111	111	Sec. 231.0005. AMOUNT OF CREDIT; LIMITATIONS. (a) The
112	112	total amount of the credit under this chapter with respect to the
113	113	rehabilitation of a single certified historic structure that may be
114	114	claimed may not exceed 25 percent of the total eligible costs and
115	115	expenses incurred in the certified rehabilitation of the certified
116	116	historic structure.
117	117	(b) The total credit that may be claimed on a tax report,
118	118	including the amount of any carryforward under Section 231.0006,
119	119	may not exceed the amount of state premium tax liability due for the
120	120	report after any other applicable credits.
121	121	(c) Eligible costs and expenses may be counted only once in
122	122	determining the amount of the credit available, and more than one
123	123	entity may not claim a credit for the same eligible costs and
124	124	expenses.
125	125	Sec. 231.0006. CARRYFORWARD. (a) If an entity is eligible
126	126	for a credit that exceeds the limitation under Section 231.0005(b),
127	127	the entity may carry the unused credit forward for not more than
128	128	five consecutive tax reports.
129	129	(b) A carryforward is considered the remaining portion of a
130	130	credit that cannot be claimed in the current year because of the
131	131	limitation under Section 231.0005(b).
132	132	Sec. 231.0007. APPLICATION FOR CREDIT. (a) An entity must
133	133	apply for a credit under this chapter on or with the tax report for
134	134	the period for which the credit is claimed.
135	135	(b) An entity shall file with any tax report on which the
136	136	credit is claimed a copy of the certificate of eligibility issued by
137	137	the commission under Section 231.0004 and any other information
138	138	required by the comptroller to sufficiently demonstrate that the
139	139	entity is eligible for the credit.
140	140	(c) The burden of establishing eligibility for and the value
141	141	of the credit is on the entity.
142	142	Sec. 231.0008. SALE OR ASSIGNMENT OF CREDIT. (a) An entity
143	143	that incurs eligible costs and expenses may sell or assign all or
144	144	part of the credit that may be claimed for those costs and expenses
145	145	to one or more entities, and any entity to which all or part of the
146	146	credit is sold or assigned may sell or assign all or part of the
147	147	credit to another entity. There is no limit on the total number of
148	148	transactions for the sale or assignment of all or part of the total
149	149	credit authorized under this chapter, however, collectively all
150	150	transfers are subject to the maximum total limits provided by
151	151	Section 231.0005.
152	152	(b) An entity that sells or assigns a credit under this
153	153	section and the entity to which the credit is sold or assigned shall
154	154	jointly submit written notice of the sale or assignment to the
155	155	comptroller on a form promulgated by the comptroller not later than
156	156	the 30th day after the date of the sale or assignment. The notice
157	157	must include:
158	158	(1) the date of the sale or assignment;
159	159	(2) the amount of the credit sold or assigned;
160	160	(3) the names and federal tax identification numbers
161	161	of the entity that sold or assigned the credit or part of the credit
162	162	and the entity to which the credit or part of the credit was sold or
163	163	assigned; and
164	164	(4) the amount of the credit owned by the selling or
165	165	assigning entity before the sale or assignment, and the amount the
166	166	selling or assigning entity retained, if any, after the sale or
167	167	assignment.
168	168	(c) The sale or assignment of a credit in accordance with
169	169	this section does not extend the period for which a credit may be
170	170	carried forward and does not increase the total amount of the credit
171	171	that may be claimed. After an entity claims a credit under this
172	172	chapter for eligible costs and expenses, another entity may not use
173	173	the same costs and expenses as the basis for claiming a credit under
174	174	this chapter or Subchapter S, Chapter 171, Tax Code.
175	175	(d) Notwithstanding the requirements of this chapter, a
176	176	credit earned or purchased by, or assigned to, a partnership,
177	177	limited liability company, S corporation, or other pass-through
178	178	entity may be allocated to the partners, members, or shareholders
179	179	of that entity and claimed under this chapter in accordance with the
180	180	provisions of any agreement among the partners, members, or
181	181	shareholders and without regard to the ownership interest of the
182	182	partners, members, or shareholders in the rehabilitated certified
183	183	historic structure, provided that the entity that claims the credit
184	184	must be subject to the tax imposed under Chapter 221, 222, 223, or
185	185	224.
186	186	Sec. 231.0009. RETALIATORY TAX. An entity that claims a
187	187	credit under this chapter is not required to pay any additional
188	188	retaliatory tax levied under Chapter 281 as a result of the credit.
189	189	Sec. 231.0010. RULES. The commission and the comptroller
190	190	shall adopt rules necessary to implement this chapter.
191	191	SECTION 2. Section 171.908(c), Tax Code, is amended to read
192	192	as follows:
193	193	(c) The sale or assignment of a credit in accordance with
194	194	this section does not extend the period for which a credit may be
195	195	carried forward and does not increase the total amount of the credit
196	196	that may be claimed. After an entity claims a credit under this
197	197	subchapter for eligible costs and expenses, another entity may not
198	198	use the same costs and expenses as the basis for claiming a credit
199	199	under this subchapter or Chapter 231, Insurance Code.
200	200	SECTION 3. (a) Section 171.908(e), Tax Code, is repealed.
201	201	(b) The repeal of Section 171.908(e), Tax Code, by this
202	202	section does not affect a credit that accrued under Subchapter S,
203	203	Chapter 171, Tax Code, before the effective date of this Act. The
204	204	provisions of that subchapter as they existed immediately before
205	205	the effective date of this Act are continued in effect for purposes
206	206	of determining the amount of the credit an entity may claim and the
207	207	manner in which the entity may claim, sell, or assign the credit or
208	208	claim any carryforward of the credit.
209	209	SECTION 4. Chapter 231, Insurance Code, as added by this
210	210	Act, applies only to a report originally due on or after January 1,
211	211	2022.
212	212	SECTION 5. This Act takes effect January 1, 2022.