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: (Enrolled) 2021-05-12 - Sent to the Governor [SB813 Detail]

Download: Texas-2021-SB813-Introduced.html
  87R6534 SMT-D
 
  By: Hughes S.B. No. 813
 
 
 
A BILL TO BE ENTITLED
 
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.
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