S.B. No. 813
AN ACT
relating to the insurance premium tax credit for the certified
rehabilitation of certified historic structures.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter 231 to read as follows:
CHAPTER 231. PREMIUM TAX CREDIT FOR CERTIFIED REHABILITATION OF
CERTIFIED HISTORIC STRUCTURES
Sec. 231.0001. DEFINITIONS. In this chapter:
(1) "Certified historic structure" means a property in
this state that is:
(A) listed individually in the National Register
of Historic Places;
(B) designated as a Recorded Texas Historic
Landmark under Section 442.006, Government Code, or as a state
archeological landmark under Chapter 191, Natural Resources Code;
or
(C) certified by the commission as contributing
to the historic significance of:
(i) a historic district listed in the
National Register of Historic Places; or
(ii) a local district certified by the
United States Department of the Interior in accordance with 36
C.F.R. Section 67.9.
(2) "Certified rehabilitation" means the
rehabilitation of a certified historic structure that the
commission has certified as meeting the United States secretary of
the interior's Standards for Rehabilitation as defined in 36 C.F.R.
Section 67.7.
(3) "Commission" means the Texas Historical
Commission.
(4) "Eligible costs and expenses" means qualified
rehabilitation expenditures as defined by Section 47(c)(2),
Internal Revenue Code of 1986, except that the depreciation and
tax-exempt use provisions of that section do not apply to costs and
expenses incurred by a federal tax-exempt organization, and those
costs and expenses are eligible costs and expenses if the other
provisions of Section 47(c)(2), Internal Revenue Code of 1986, are
satisfied.
(5) "Federal tax-exempt organization" means an entity
exempted from the federal income tax under Section 501(a), Internal
Revenue Code of 1986.
(6) "State premium tax liability" means any liability
incurred by an entity under Chapter 221, 222, 223, or 224.
Sec. 231.0002. ELIGIBILITY FOR CREDIT. An entity is
eligible to apply for a credit against state premium tax liability
in the amount and under the conditions provided by this chapter.
Sec. 231.0003. QUALIFICATION. An entity is eligible for a
credit for eligible costs and expenses incurred in the certified
rehabilitation of a certified historic structure as provided by
this chapter if:
(1) the rehabilitated certified historic structure is
placed in service on or after September 1, 2021;
(2) the entity has an ownership interest in the
certified historic structure in the year during which the structure
is placed in service after the rehabilitation; and
(3) the total amount of the eligible costs and
expenses incurred exceeds $5,000.
Sec. 231.0004. CERTIFICATION OF ELIGIBILITY. (a) Before
claiming, selling, or assigning a credit under this chapter, the
entity that incurred the eligible costs and expenses in the
rehabilitation of a certified historic structure must request from
the commission a certificate of eligibility on which the commission
certifies that the work performed meets the definition of a
certified rehabilitation. The entity must include with the
entity's request:
(1) information on the property that is sufficient for
the commission to determine whether the property meets the
definition of a certified historic structure; and
(2) information on the rehabilitation, and
photographs before and after work is performed, sufficient for the
commission to determine whether the rehabilitation meets the United
States secretary of the interior's Standards for Rehabilitation as
defined in 36 C.F.R. Section 67.7.
(b) The commission shall issue a certificate of eligibility
to an entity that has incurred eligible costs and expenses as
provided by this chapter. The certificate must:
(1) confirm that:
(A) the property to which the eligible costs and
expenses relate is a certified historic structure; and
(B) the rehabilitation qualifies as a certified
rehabilitation; and
(2) specify the date the certified historic structure
was first placed in service after the rehabilitation.
(c) The entity must forward the certificate of eligibility
and the following documentation to the comptroller to claim the
credit:
(1) an audited cost report issued by a certified
public accountant, as defined by Section 901.002, Occupations Code,
that itemizes the eligible costs and expenses incurred in the
certified rehabilitation of the certified historic structure by the
entity;
(2) the date the certified historic structure was
first placed in service after the rehabilitation and evidence of
that placement in service; and
(3) an attestation of the total eligible costs and
expenses incurred by the entity on the rehabilitation of the
certified historic structure.
(d) For purposes of approving the credit under Subsection
(c), the comptroller may rely on the audited cost report provided by
the entity that requested the credit.
(e) An entity that sells or assigns a credit under this
chapter to another entity shall provide a copy of the certificate of
eligibility, together with the audited cost report, to the
purchaser or assignee.
Sec. 231.0005. AMOUNT OF CREDIT; LIMITATIONS. (a) The
total amount of the credit under this chapter with respect to the
rehabilitation of a single certified historic structure that may be
claimed may not exceed 25 percent of the total eligible costs and
expenses incurred in the certified rehabilitation of the certified
historic structure.
(b) The total credit that may be claimed on a tax report,
including the amount of any carryforward under Section 231.0006,
may not exceed the amount of state premium tax liability due for the
report after any other applicable credits.
(c) Eligible costs and expenses may be counted only once in
determining the amount of the credit available, and more than one
entity may not claim a credit for the same eligible costs and
expenses.
Sec. 231.0006. CARRYFORWARD. (a) If an entity is eligible
for a credit that exceeds the limitation under Section 231.0005(b),
the entity may carry the unused credit forward for not more than
five consecutive tax reports.
(b) A carryforward is considered the remaining portion of a
credit that cannot be claimed in the current year because of the
limitation under Section 231.0005(b).
Sec. 231.0007. APPLICATION FOR CREDIT. (a) An entity must
apply for a credit under this chapter on or with the tax report for
the period for which the credit is claimed.
(b) An entity shall file with any tax report on which the
credit is claimed a copy of the certificate of eligibility issued by
the commission under Section 231.0004 and any other information
required by the comptroller to sufficiently demonstrate that the
entity is eligible for the credit.
(c) The burden of establishing eligibility for and the value
of the credit is on the entity.
Sec. 231.0008. SALE OR ASSIGNMENT OF CREDIT. (a) An entity
that incurs eligible costs and expenses may sell or assign all or
part of the credit that may be claimed for those costs and expenses
to one or more entities, and any entity to which all or part of the
credit is sold or assigned may sell or assign all or part of the
credit to another entity. There is no limit on the total number of
transactions for the sale or assignment of all or part of the total
credit authorized under this chapter, however, collectively all
transfers are subject to the maximum total limits provided by
Section 231.0005.
(b) An entity that sells or assigns a credit under this
section and the entity to which the credit is sold or assigned shall
jointly submit written notice of the sale or assignment to the
comptroller on a form promulgated by the comptroller not later than
the 30th day after the date of the sale or assignment. The notice
must include:
(1) the date of the sale or assignment;
(2) the amount of the credit sold or assigned;
(3) the names and federal tax identification numbers
of the entity that sold or assigned the credit or part of the credit
and the entity to which the credit or part of the credit was sold or
assigned; and
(4) the amount of the credit owned by the selling or
assigning entity before the sale or assignment, and the amount the
selling or assigning entity retained, if any, after the sale or
assignment.
(c) The sale or assignment of a credit in accordance with
this section does not extend the period for which a credit may be
carried forward and does not increase the total amount of the credit
that may be claimed. After an entity claims a credit under this
chapter for eligible costs and expenses, another entity may not use
the same costs and expenses as the basis for claiming a credit under
this chapter or Subchapter S, Chapter 171, Tax Code.
(d) Notwithstanding the requirements of this chapter, a
credit earned or purchased by, or assigned to, a partnership,
limited liability company, S corporation, or other pass-through
entity may be allocated to the partners, members, or shareholders
of that entity and claimed under this chapter in accordance with the
provisions of any agreement among the partners, members, or
shareholders and without regard to the ownership interest of the
partners, members, or shareholders in the rehabilitated certified
historic structure, provided that the entity that claims the credit
must be subject to the tax imposed under Chapter 221, 222, 223, or
224.
Sec. 231.0009. RETALIATORY TAX. An entity that claims a
credit under this chapter is not required to pay any additional
retaliatory tax levied under Chapter 281 as a result of the credit.
Sec. 231.0010. RULES. The commission and the comptroller
shall adopt rules necessary to implement this chapter.
SECTION 2. Section 171.908(c), Tax Code, is amended to read
as follows:
(c) The sale or assignment of a credit in accordance with
this section does not extend the period for which a credit may be
carried forward and does not increase the total amount of the credit
that may be claimed. After an entity claims a credit under this
subchapter for eligible costs and expenses, another entity may not
use the same costs and expenses as the basis for claiming a credit
under this subchapter or Chapter 231, Insurance Code.
SECTION 3. (a) Section 171.908(e), Tax Code, is repealed.
(b) The repeal of Section 171.908(e), Tax Code, by this
section does not affect a credit that accrued under Subchapter S,
Chapter 171, Tax Code, before the effective date of this Act. The
provisions of that subchapter as they existed immediately before
the effective date of this Act are continued in effect for purposes
of determining the amount of the credit an entity may claim and the
manner in which the entity may claim, sell, or assign the credit or
claim any carryforward of the credit.
SECTION 4. Chapter 231, Insurance Code, as added by this
Act, applies only to a report originally due on or after January 1,
2022.
SECTION 5. This Act takes effect January 1, 2022.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 813 passed the Senate on
April 9, 2021, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 813 passed the House on
May 8, 2021, by the following vote: Yeas 134, Nays 5, two present
not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor