Bill Text: TX SB813 | 2021-2022 | 87th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the insurance premium tax credit for the certified rehabilitation of certified historic structures.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Vetoed) 2021-05-24 - Vetoed by the Governor [SB813 Detail]
Download: Texas-2021-SB813-Introduced.html
Bill Title: Relating to the insurance premium tax credit for the certified rehabilitation of certified historic structures.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Vetoed) 2021-05-24 - Vetoed by the Governor [SB813 Detail]
Download: Texas-2021-SB813-Introduced.html
87R6534 SMT-D | ||
By: Hughes | S.B. No. 813 |
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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. |