Moody Bill Bumps Historic Rehab Tax Credit To 33 Percent

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90R1005 CJD-F

By: Moody
H.B. No. 572

A BILL TO BE ENTITLED

AN ACT

relating to the franchise and insurance premium tax credit for the

certified rehabilitation of certified historic structures located

in certain counties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 172.105(a) and (b), Tax Code, are

amended to read as follows:

(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 :

(A) the property meets the definition of a

certified historic structure; and

(B) if applicable, the property is located in a

distressed county as determined under Section 172.106(a-2); 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 :

(i) a certified historic structure; and

(ii) if applicable, located in a distressed

county as determined under Section 172.106(a-2); 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.

SECTION 2. Section 172.106, Tax Code, is amended by

amending Subsection (a) and adding Subsections (a-1) and (a-2) to

read as follows:

(a) Except as provided by Subsection (a-1), the [ 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.

(a-1) The total amount of the credit under this chapter that

may be claimed with respect to the rehabilitation of a single

certified historic structure may not exceed 33 percent of the total

eligible costs and expenses incurred in the certified

rehabilitation of the certified historic structure if:

(1) the structure is located in a distressed county;

and

(2) on the date the structure is placed in service, at

least 50 percent of the internal square footage of the structure

consists of space primarily dedicated to residential purposes,

including dwelling units and space used for circulation among

dwelling units, lobbies, and other support areas serving

residential purposes.

(a-2) For purposes of Subsection (a-1), a certified

historic structure is located in a distressed county if, on January

1 of the year an entity requests that the commission determine

whether the structure is a certified historic structure under

Section 172.105, the structure is located in a county with a median

household income of not more than 80 percent of the median household

income of this state. For purposes of this subsection, the median

household income of a county or this state is determined using the

United States Census Bureau's most recent American Community

Survey's five-year estimate of median household income for the

county or this state, as applicable.

SECTION 3. (a) The changes in law made by this Act apply

only to:

(1) a tax report due on or after the effective date of

this Act; and

(2) a certified rehabilitation of a certified historic

structure for which a certificate of eligibility is issued to an

entity by the Texas Historical Commission under Section 172.105,

Tax Code, on or after the effective date of this Act, regardless of

the date the entity submitted the request to the commission for the

certificate.

(b) Notwithstanding Section 172.105, Tax Code, as amended

by this Act, an entity that submitted a request to the Texas

Historical Commission for a certificate of eligibility under that

section before the effective date of this Act and that has not

received the certificate before that date may certify in writing to

the commission that the certified historic structure to which the

request relates was located in a distressed county, as determined

under Section 172.106(a-2), Tax Code, as added by this Act, on the

date the entity submitted a request to the commission for a

determination that the structure was a certified historic

structure. The Texas Historical Commission shall:

(1) verify the information certified by the entity;

and

(2) if the information certified by the entity is

correct, indicate on the certificate of eligibility issued to the

entity that the certified historic structure is located in a

distressed county.

SECTION 4. This Act takes effect January 1, 2028.