Texas 2023 - 88th Regular

Texas Senate Bill SB1013 Compare Versions

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1	1	S.B. No. 1013
2	2
3	3
4	4	AN ACT
5	5	relating to the franchise and insurance premium tax credit for the
6	6	certified rehabilitation of certified historic structures.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. The heading to Subtitle F, Title 2, Tax Code, is
9	9	amended to read as follows:
10	10	SUBTITLE F. FRANCHISE TAX; CREDITS
11	11	SECTION 2. Subchapter S, Chapter 171, Tax Code, is
12	12	transferred to Subtitle F, Title 2, Tax Code, redesignated as
13	13	Chapter 172, Tax Code, and amended to read as follows:
14	14	CHAPTER 172 [SUBCHAPTER S]. TAX CREDIT FOR CERTIFIED
15	15	REHABILITATION OF CERTIFIED HISTORIC STRUCTURES
16	16	Sec. 172.101 [171.901]. DEFINITIONS. (a) Terms used in
17	17	this chapter and defined by Chapter 171 have the meanings assigned
18	18	by Chapter 171.
19	19	(b) In this chapter [subchapter]:
20	20	(1) "Certified historic structure" means a property in
21	21	this state that is:
22	22	(A) listed individually in the National Register
23	23	of Historic Places;
24	24	(B) designated as a Recorded Texas Historic
25	25	Landmark under Section 442.006, Government Code, or as a state
26	26	archeological landmark under Chapter 191, Natural Resources Code;
27	27	or
28	28	(C) certified by the commission as contributing
29	29	to the historic significance of:
30	30	(i) a historic district listed in the
31	31	National Register of Historic Places; or
32	32	(ii) a local district certified by the
33	33	United States Department of the Interior in accordance with 36
34	34	C.F.R. Section 67.9.
35	35	(2) "Certified rehabilitation" means the
36	36	rehabilitation of a certified historic structure that the
37	37	commission has certified as meeting the United States secretary of
38	38	the interior's Standards for Rehabilitation as defined in 36 C.F.R.
39	39	Section 67.7.
40	40	(3) "Commission" means the Texas Historical
41	41	Commission.
42	42	Sec. 172.102 [171.9015]. ELIGIBLE COSTS AND EXPENSES. (a)
43	43	Subject to Subsections (b) and (c), in this chapter [subchapter],
44	44	"eligible costs and expenses" means qualified rehabilitation
45	45	expenditures as defined by Section 47(c)(2), Internal Revenue Code.
46	46	(b) Except as provided by Subsection (c), the depreciation
47	47	and tax-exempt use provisions of Section 47(c)(2), Internal Revenue
48	48	Code, do not apply to costs and expenses incurred by an entity
49	49	exempted from the federal income tax under Section 501(a), Internal
50	50	Revenue Code [exempt from the tax imposed under this chapter by
51	51	Section 171.063], and those costs and expenses are eligible costs
52	52	and expenses if the other provisions of Section 47(c)(2), Internal
53	53	Revenue Code, are satisfied.
54	54	(c) Expenditures by an entity described by Subsection (b) to
55	55	rehabilitate a structure that is leased to a tax-exempt entity in a
56	56	disqualified lease, as those terms are defined by Section 168(h),
57	57	Internal Revenue Code, are not eligible costs and expenses.
58	58	Sec. 172.103 [171.902]. ELIGIBILITY FOR CREDIT. An entity
59	59	is eligible to apply for a credit in the amount and under the
60	60	conditions and limitations provided by this chapter [subchapter]
61	61	against the taxes [tax] imposed under Chapter 171 of this code and,
62	62	as provided by Section 172.109(e), Chapters 221, 222, 223, and 224,
63	63	Insurance Code [this chapter].
64	64	Sec. 172.104 [171.903]. QUALIFICATION. An entity is
65	65	eligible for a credit for eligible costs and expenses incurred in
66	66	the certified rehabilitation of a certified historic structure as
67	67	provided by this chapter [subchapter] if:
68	68	(1) the rehabilitated certified historic structure is
69	69	placed in service on or after September 1, 2013;
70	70	(2) the entity has an ownership interest in the
71	71	certified historic structure in the year during which the structure
72	72	is placed in service after the rehabilitation; and
73	73	(3) the total amount of the eligible costs and
74	74	expenses incurred exceeds $5,000.
75	75	Sec. 172.105 [171.904]. CERTIFICATION OF ELIGIBILITY. (a)
76	76	Before claiming, selling, or assigning a credit under this chapter
77	77	[subchapter], the entity that incurred the eligible costs and
78	78	expenses in the rehabilitation of a certified historic structure
79	79	must request from the commission a certificate of eligibility on
80	80	which the commission certifies that the work performed meets the
81	81	definition of a certified rehabilitation. The entity must include
82	82	with the entity's request:
83	83	(1) information on the property that is sufficient for
84	84	the commission to determine whether the property meets the
85	85	definition of a certified historic structure; and
86	86	(2) information on the rehabilitation, and
87	87	photographs before and after work is performed, sufficient for the
88	88	commission to determine whether the rehabilitation meets the United
89	89	States secretary of the interior's Standards for Rehabilitation as
90	90	defined in 36 C.F.R. Section 67.7.
91	91	(b) The commission shall issue a certificate of eligibility
92	92	to an entity that has incurred eligible costs and expenses as
93	93	provided by this chapter [subchapter]. The certificate must:
94	94	(1) confirm that:
95	95	(A) the property to which the eligible costs and
96	96	expenses relate is a certified historic structure; and
97	97	(B) the rehabilitation qualifies as a certified
98	98	rehabilitation; and
99	99	(2) specify the date the certified historic structure
100	100	was first placed in service after the rehabilitation.
101	101	(c) The entity must forward the certificate of eligibility
102	102	and the following documentation to the comptroller to claim the tax
103	103	credit:
104	104	(1) an audited cost report issued by a certified
105	105	public accountant, as defined by Section 901.002, Occupations Code,
106	106	that itemizes the eligible costs and expenses incurred in the
107	107	certified rehabilitation of the certified historic structure by the
108	108	entity;
109	109	(2) the date the certified historic structure was
110	110	first placed in service after the rehabilitation and evidence of
111	111	that placement in service; and
112	112	(3) an attestation of the total eligible costs and
113	113	expenses incurred by the entity on the rehabilitation of the
114	114	certified historic structure.
115	115	(d) For purposes of approving the tax credit under
116	116	Subsection (c), the comptroller may rely on the audited cost report
117	117	provided by the entity that requested the tax credit.
118	118	(e) An entity that sells or assigns a credit under this
119	119	chapter [subchapter] to another entity shall provide a copy of the
120	120	certificate of eligibility, together with the audited cost report,
121	121	to the purchaser or assignee.
122	122	Sec. 172.106 [171.905]. AMOUNT OF CREDIT; LIMITATIONS.
123	123	(a) The total amount of the credit under this chapter [subchapter]
124	124	with respect to the rehabilitation of a single certified historic
125	125	structure that may be claimed may not exceed 25 percent of the total
126	126	eligible costs and expenses incurred in the certified
127	127	rehabilitation of the certified historic structure.
128	128	(b) The total credit claimed for a report, including the
129	129	amount of any carryforward under Section 172.107 [171.906], may not
130	130	exceed the amount of franchise tax due for the report after any
131	131	other applicable tax credits.
132	132	(c) Eligible costs and expenses may only be counted once in
133	133	determining the amount of the tax credit available, and more than
134	134	one entity may not claim a credit for the same eligible costs and
135	135	expenses.
136	136	Sec. 172.107 [171.906]. CARRYFORWARD. (a) If an entity is
137	137	eligible for a credit that exceeds the limitation under Section
138	138	172.106(b) [171.905(b)], the entity may carry the unused credit
139	139	forward for not more than five consecutive reports.
140	140	(b) A carryforward is considered the remaining portion of a
141	141	credit that cannot be claimed in the current year because of the
142	142	limitation under Section 172.106(b) [171.905(b)].
143	143	Sec. 172.108 [171.907]. APPLICATION FOR CREDIT. (a) An
144	144	entity must apply for a credit under this chapter [subchapter] on or
145	145	with the report for the period for which the credit is claimed.
146	146	(b) An entity shall file with any report on which the credit
147	147	is claimed a copy of the certificate of eligibility issued by the
148	148	commission under Section 172.105 [171.904] and any other
149	149	information required by the comptroller to sufficiently
150	150	demonstrate that the entity is eligible for the credit.
151	151	(c) The burden of establishing eligibility for and the value
152	152	of the credit is on the entity.
153	153	Sec. 172.109 [171.908]. SALE OR ASSIGNMENT OF CREDIT. (a)
154	154	An entity that incurs eligible costs and expenses may sell or assign
155	155	all or part of the credit that may be claimed for those costs and
156	156	expenses to one or more entities, and any entity to which all or
157	157	part of the credit is sold or assigned may sell or assign all or part
158	158	of the credit to another entity. There is no limit on the total
159	159	number of transactions for the sale or assignment of all or part of
160	160	the total credit authorized under this chapter [subchapter],
161	161	however, collectively all transfers are subject to the maximum
162	162	total limits provided by Section 172.106 [171.905].
163	163	(b) An entity that sells or assigns a credit under this
164	164	section and the entity to which the credit is sold or assigned shall
165	165	jointly submit written notice of the sale or assignment to the
166	166	comptroller on a form promulgated by the comptroller not later than
167	167	the 30th day after the date of the sale or assignment. The notice
168	168	must include:
169	169	(1) the date of the sale or assignment;
170	170	(2) the amount of the credit sold or assigned;
171	171	(3) the names and federal tax identification numbers
172	172	of the entity that sold or assigned the credit or part of the credit
173	173	and the entity to which the credit or part of the credit was sold or
174	174	assigned; and
175	175	(4) the amount of the credit owned by the selling or
176	176	assigning entity before the sale or assignment, and the amount the
177	177	selling or assigning entity retained, if any, after the sale or
178	178	assignment.
179	179	(c) The sale or assignment of a credit in accordance with
180	180	this section does not extend the period for which a credit may be
181	181	carried forward and does not increase the total amount of the credit
182	182	that may be claimed. After an entity claims a credit for eligible
183	183	costs and expenses, another entity may not use the same costs and
184	184	expenses as the basis for claiming a credit.
185	185	(d) Notwithstanding the requirements of this chapter
186	186	[subchapter], a credit earned or purchased by, or assigned to, a
187	187	partnership, limited liability company, S corporation, or other
188	188	pass-through entity may be allocated to the partners, members, or
189	189	shareholders of that entity and claimed under this chapter
190	190	[subchapter] in accordance with the provisions of any agreement
191	191	among the partners, members, or shareholders and without regard to
192	192	the ownership interest of the partners, members, or shareholders in
193	193	the rehabilitated certified historic structure, provided that the
194	194	entity that claims the credit must be subject to the tax imposed
195	195	under Chapter 171 [this chapter].
196	196	(e) An entity that incurs eligible costs and expenses or to
197	197	which all or part of a credit is sold or assigned and that is subject
198	198	to a premium tax imposed under Chapter 221, 222, 223, or 224,
199	199	Insurance Code, may claim all or part of the credit against that
200	200	tax. The provisions of this chapter [subchapter], including
201	201	provisions relating to the total amount of the credit that may be
202	202	claimed for a report, the carryforward of the credit, and the sale
203	203	or assignment of the credit, apply with respect to a credit claimed
204	204	against a tax imposed under Chapter 221, 222, 223, or 224, Insurance
205	205	Code, to the same extent those provisions apply to a credit claimed
206	206	against the tax imposed under Chapter 171 of this code [this
207	207	chapter]. An entity claiming all or part of a credit as authorized
208	208	by this subsection is not required to pay any additional
209	209	retaliatory tax levied under Chapter 281, Insurance Code, as a
210	210	result of claiming that credit.
211	211	Sec. 172.110 [171.909]. RULES. The commission and the
212	212	comptroller shall adopt rules necessary to implement this chapter
213	213	[subchapter].
214	214	SECTION 3. The changes in law made by this Act do not affect
215	215	the validity of a credit that accrued under Subchapter S, Chapter
216	216	171, Tax Code, before the effective date of this Act. The credit
217	217	continues in effect as a credit under Chapter 172, Tax Code, as
218	218	transferred, redesignated, and amended by this Act.
219	219	SECTION 4. This Act takes effect September 1, 2023.
220	220	______________________________ ______________________________
221	221	President of the Senate Speaker of the House
222	222	I hereby certify that S.B. No. 1013 passed the Senate on
223	223	April 12, 2023, by the following vote: Yeas 31, Nays 0.
224	224	______________________________
225	225	Secretary of the Senate
226	226	I hereby certify that S.B. No. 1013 passed the House on
227	227	May 8, 2023, by the following vote: Yeas 142, Nays 0,
228	228	one present not voting.
229	229	______________________________
230	230	Chief Clerk of the House
231	231	Approved:
232	232	______________________________
233	233	Date
234	234	______________________________
235	235	Governor