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  83R24934 KLA-F
 
  By: Hilderbran, Menendez, H.B. No. 3111
      N. Gonzalez of El Paso
 
  Substitute the following for H.B. No. 3111:
 
  By:  Hilderbran C.S.H.B. No. 3111
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to tax credits for the certified rehabilitation of
  certified historic structures.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 171, Tax Code, is amended by adding
  Subchapter S to read as follows:
  SUBCHAPTER S. TAX CREDIT FOR CERTIFIED REHABILITATION OF CERTIFIED
  HISTORIC STRUCTURES
         Sec. 171.901.  DEFINITIONS. In this subchapter:
               (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.
         Sec. 171.902.  ELIGIBILITY FOR CREDIT. An entity is
  eligible to apply for a credit in the amount and under the
  conditions and limitations provided by this subchapter against the
  tax imposed under this chapter.
         Sec. 171.903.  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 subchapter if:
               (1)  the rehabilitated certified historic structure is
  placed in service on or after September 1, 2013;
               (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. 171.904.  CERTIFICATION OF ELIGIBILITY. (a) Before
  claiming, selling, or assigning a credit under this subchapter, 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 subchapter. 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 tax
  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 tax credit under
  Subsection (c), the comptroller may rely on the audited cost report
  provided by the entity that requested the tax credit.
         (e)  An entity that sells or assigns a credit under this
  subchapter to another entity shall provide a copy of the
  certificate of eligibility, together with the audited cost report,
  to the purchaser or assignee.
         Sec. 171.905.  AMOUNT OF CREDIT; LIMITATIONS.  (a)  The total
  amount of the credit under this subchapter 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 claimed for a report, including the
  amount of any carryforward under Section 171.906, may not exceed
  the amount of franchise tax due for the report after any other
  applicable tax credits.
         (c)  Eligible costs and expenses may only be counted once in
  determining the amount of the tax credit available, and more than
  one entity may not claim a credit for the same eligible costs and
  expenses.
         Sec. 171.906.  CARRYFORWARD. (a) If an entity is eligible
  for a credit that exceeds the limitation under Section 171.905(b),
  the entity may carry the unused credit forward for not more than
  five consecutive 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 171.905(b).
         Sec. 171.907.  APPLICATION FOR CREDIT. (a) An entity must
  apply for a credit under this subchapter on or with the report for
  the period for which the credit is claimed.
         (b)  An entity shall file with any report on which the credit
  is claimed a copy of the certificate of eligibility issued by the
  commission under Section 171.904 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. 171.908.  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 subchapter, however, collectively all
  transfers are subject to the maximum total limits provided by
  Section 171.905.
         (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 for eligible
  costs and expenses, another entity may not use the same costs and
  expenses as the basis for claiming a credit.
         (d)  Notwithstanding the requirements of this subchapter, 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 subchapter 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 this chapter.
         Sec. 171.909.  RULES. The commission and the comptroller
  shall adopt rules necessary to implement this subchapter.
         SECTION 2.  Subtitle B, Title 3, Insurance Code, is amended
  by adding Chapter 232 to read as follows:
  CHAPTER 232. PREMIUM TAX CREDIT FOR CERTIFIED REHABILITATION OF
  CERTIFIED HISTORIC STRUCTURES
         Sec. 232.001.  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.
               (5)  "State premium tax liability" means any liability
  incurred by an entity under Chapter 221, 222, 223, or 224.
         Sec. 232.002.  ELIGIBILITY FOR CREDIT. An entity is
  eligible to apply for a credit against state premium tax liability
  on a report in the amount and under the conditions and limitations
  provided by this chapter.
         Sec. 232.003.  QUALIFICATION. An entity is eligible to
  apply 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, 2013;
               (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. 232.004.  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 subchapter. 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 tax
  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 tax credit under
  Subsection (c), the comptroller may rely on the audited cost report
  provided by the entity that requested the tax 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. 232.005.  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 applied for in a report,
  including the amount of any carryforward under Section 232.006, may
  not exceed the amount of state premium tax liability for the report
  after any other applicable tax credits.
         (c)  Eligible costs  and expenses may only be counted once in
  determining the amount of the tax credit available, and more than
  one entity may not claim a credit for the same eligible costs and
  expenses.
         Sec. 232.006.  CARRYFORWARD. (a) If an entity is eligible
  for a credit that exceeds the limitation under Section 232.005(b),
  the entity may carry the unused credit forward for not more than
  five consecutive 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 232.005(b).
         Sec. 232.007.  APPLICATION FOR CREDIT. (a) An entity must
  apply for a credit under this chapter on or with the report for the
  period for which the credit is claimed.
         (b)  An entity shall file with any report on which the credit
  is claimed a copy of the certificate of eligibility issued by the
  commission under Section 232.004 and any other information required
  by the comptroller to sufficiently demonstrate that the entity is
  eligible for the credit.
         (c)  The burden of establishing entitlement to and the value
  of the credit is on the entity.
         Sec. 232.008.  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 232.005.
         (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 for eligible
  costs and expenses, another entity may not use the same costs and
  expenses as the basis for claiming a credit.
         (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. 232.009.  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. 232.010.  RULES. The commission and the comptroller
  shall adopt rules necessary to implement this chapter.
         SECTION 3.  This Act applies only to a report originally due
  on or after the effective date of this Act.
         SECTION 4.  This Act takes effect September 1, 2013.