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A BILL TO BE ENTITLED
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AN ACT
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relating to the insurance premium tax credit for the certified |
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rehabilitation of certified historic structures. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle B, Title 3, Insurance Code, is amended |
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by adding Chapter 231 to read as follows: |
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CHAPTER 231. PREMIUM TAX CREDIT FOR CERTIFIED REHABILITATION OF |
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CERTIFIED HISTORIC STRUCTURES |
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Sec. 231.0001. DEFINITIONS. In this chapter: |
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(1) "Certified historic structure" means a property in |
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this state that is: |
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(A) listed individually in the National Register |
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of Historic Places; |
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(B) designated as a Recorded Texas Historic |
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Landmark under Section 442.006, Government Code, or as a state |
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archeological landmark under Chapter 191, Natural Resources Code; |
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or |
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(C) certified by the commission as contributing |
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to the historic significance of: |
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(i) a historic district listed in the |
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National Register of Historic Places; or |
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(ii) a local district certified by the |
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United States Department of the Interior in accordance with 36 |
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C.F.R. Section 67.9. |
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(2) "Certified rehabilitation" means the |
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rehabilitation of a certified historic structure that the |
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commission has certified as meeting the United States secretary of |
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the interior's Standards for Rehabilitation as defined in 36 C.F.R. |
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Section 67.7. |
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(3) "Commission" means the Texas Historical |
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Commission. |
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(4) "Eligible costs and expenses" means qualified |
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rehabilitation expenditures as defined by Section 47(c)(2), |
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Internal Revenue Code of 1986, except that the depreciation and |
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tax-exempt use provisions of that section do not apply to costs and |
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expenses incurred by a federal tax-exempt organization, and those |
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costs and expenses are eligible costs and expenses if the other |
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provisions of Section 47(c)(2), Internal Revenue Code of 1986, are |
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satisfied. |
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(5) "Federal tax-exempt organization" means an entity |
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exempted from the federal income tax under Section 501(a), Internal |
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Revenue Code of 1986. |
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(6) "State premium tax liability" means any liability |
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incurred by an entity under Chapter 221, 222, 223, or 224. |
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Sec. 231.0002. ELIGIBILITY FOR CREDIT. An entity is |
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eligible to apply for a credit against state premium tax liability |
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in the amount and under the conditions provided by this chapter. |
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Sec. 231.0003. QUALIFICATION. An entity is eligible for a |
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credit for eligible costs and expenses incurred in the certified |
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rehabilitation of a certified historic structure as provided by |
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this chapter if: |
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(1) the rehabilitated certified historic structure is |
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placed in service on or after September 1, 2021; |
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(2) the entity has an ownership interest in the |
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certified historic structure in the year during which the structure |
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is placed in service after the rehabilitation; and |
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(3) the total amount of the eligible costs and |
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expenses incurred exceeds $5,000. |
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Sec. 231.0004. CERTIFICATION OF ELIGIBILITY. (a) Before |
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claiming, selling, or assigning a credit under this chapter, the |
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entity that incurred the eligible costs and expenses in the |
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rehabilitation of a certified historic structure must request from |
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the commission a certificate of eligibility on which the commission |
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certifies that the work performed meets the definition of a |
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certified rehabilitation. The entity must include with the |
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entity's request: |
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(1) information on the property that is sufficient for |
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the commission to determine whether the property meets the |
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definition of a certified historic structure; and |
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(2) information on the rehabilitation, and |
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photographs before and after work is performed, sufficient for the |
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commission to determine whether the rehabilitation meets the United |
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States secretary of the interior's Standards for Rehabilitation as |
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defined in 36 C.F.R. Section 67.7. |
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(b) The commission shall issue a certificate of eligibility |
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to an entity that has incurred eligible costs and expenses as |
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provided by this chapter. The certificate must: |
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(1) confirm that: |
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(A) the property to which the eligible costs and |
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expenses relate is a certified historic structure; and |
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(B) the rehabilitation qualifies as a certified |
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rehabilitation; and |
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(2) specify the date the certified historic structure |
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was first placed in service after the rehabilitation. |
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(c) The entity must forward the certificate of eligibility |
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and the following documentation to the comptroller to claim the |
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credit: |
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(1) an audited cost report issued by a certified |
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public accountant, as defined by Section 901.002, Occupations Code, |
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that itemizes the eligible costs and expenses incurred in the |
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certified rehabilitation of the certified historic structure by the |
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entity; |
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(2) the date the certified historic structure was |
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first placed in service after the rehabilitation and evidence of |
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that placement in service; and |
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(3) an attestation of the total eligible costs and |
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expenses incurred by the entity on the rehabilitation of the |
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certified historic structure. |
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(d) For purposes of approving the credit under Subsection |
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(c), the comptroller may rely on the audited cost report provided by |
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the entity that requested the credit. |
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(e) An entity that sells or assigns a credit under this |
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chapter to another entity shall provide a copy of the certificate of |
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eligibility, together with the audited cost report, to the |
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purchaser or assignee. |
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Sec. 231.0005. AMOUNT OF CREDIT; LIMITATIONS. (a) The |
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total amount of the credit under this chapter with respect to the |
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rehabilitation of a single certified historic structure that may be |
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claimed may not exceed 25 percent of the total eligible costs and |
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expenses incurred in the certified rehabilitation of the certified |
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historic structure. |
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(b) The total credit that may be claimed on a tax report, |
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including the amount of any carryforward under Section 231.0006, |
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may not exceed the amount of state premium tax liability due for the |
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report after any other applicable credits. |
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(c) Eligible costs and expenses may be counted only once in |
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determining the amount of the credit available, and more than one |
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entity may not claim a credit for the same eligible costs and |
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expenses. |
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Sec. 231.0006. CARRYFORWARD. (a) If an entity is eligible |
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for a credit that exceeds the limitation under Section 231.0005(b), |
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the entity may carry the unused credit forward for not more than |
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five consecutive tax reports. |
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(b) A carryforward is considered the remaining portion of a |
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credit that cannot be claimed in the current year because of the |
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limitation under Section 231.0005(b). |
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Sec. 231.0007. APPLICATION FOR CREDIT. (a) An entity must |
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apply for a credit under this chapter on or with the tax report for |
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the period for which the credit is claimed. |
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(b) An entity shall file with any tax report on which the |
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credit is claimed a copy of the certificate of eligibility issued by |
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the commission under Section 231.0004 and any other information |
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required by the comptroller to sufficiently demonstrate that the |
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entity is eligible for the credit. |
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(c) The burden of establishing eligibility for and the value |
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of the credit is on the entity. |
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Sec. 231.0008. SALE OR ASSIGNMENT OF CREDIT. (a) An entity |
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that incurs eligible costs and expenses may sell or assign all or |
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part of the credit that may be claimed for those costs and expenses |
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to one or more entities, and any entity to which all or part of the |
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credit is sold or assigned may sell or assign all or part of the |
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credit to another entity. There is no limit on the total number of |
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transactions for the sale or assignment of all or part of the total |
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credit authorized under this chapter, however, collectively all |
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transfers are subject to the maximum total limits provided by |
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Section 231.0005. |
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(b) An entity that sells or assigns a credit under this |
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section and the entity to which the credit is sold or assigned shall |
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jointly submit written notice of the sale or assignment to the |
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comptroller on a form promulgated by the comptroller not later than |
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the 30th day after the date of the sale or assignment. The notice |
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must include: |
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(1) the date of the sale or assignment; |
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(2) the amount of the credit sold or assigned; |
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(3) the names and federal tax identification numbers |
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of the entity that sold or assigned the credit or part of the credit |
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and the entity to which the credit or part of the credit was sold or |
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assigned; and |
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(4) the amount of the credit owned by the selling or |
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assigning entity before the sale or assignment, and the amount the |
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selling or assigning entity retained, if any, after the sale or |
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assignment. |
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(c) The sale or assignment of a credit in accordance with |
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this section does not extend the period for which a credit may be |
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carried forward and does not increase the total amount of the credit |
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that may be claimed. After an entity claims a credit under this |
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chapter for eligible costs and expenses, another entity may not use |
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the same costs and expenses as the basis for claiming a credit under |
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this chapter or Subchapter S, Chapter 171, Tax Code. |
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(d) Notwithstanding the requirements of this chapter, a |
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credit earned or purchased by, or assigned to, a partnership, |
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limited liability company, S corporation, or other pass-through |
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entity may be allocated to the partners, members, or shareholders |
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of that entity and claimed under this chapter in accordance with the |
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provisions of any agreement among the partners, members, or |
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shareholders and without regard to the ownership interest of the |
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partners, members, or shareholders in the rehabilitated certified |
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historic structure, provided that the entity that claims the credit |
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must be subject to the tax imposed under Chapter 221, 222, 223, or |
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224. |
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Sec. 231.0009. RETALIATORY TAX. An entity that claims a |
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credit under this chapter is not required to pay any additional |
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retaliatory tax levied under Chapter 281 as a result of the credit. |
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Sec. 231.0010. RULES. The commission and the comptroller |
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shall adopt rules necessary to implement this chapter. |
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SECTION 2. Section 171.908(c), Tax Code, is amended to read |
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as follows: |
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(c) The sale or assignment of a credit in accordance with |
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this section does not extend the period for which a credit may be |
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carried forward and does not increase the total amount of the credit |
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that may be claimed. After an entity claims a credit under this |
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subchapter for eligible costs and expenses, another entity may not |
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use the same costs and expenses as the basis for claiming a credit |
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under this subchapter or Chapter 231, Insurance Code. |
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SECTION 3. (a) Section 171.908(e), Tax Code, is repealed. |
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(b) The repeal of Section 171.908(e), Tax Code, by this |
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section does not affect a credit that accrued under Subchapter S, |
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Chapter 171, Tax Code, before the effective date of this Act. The |
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provisions of that subchapter as they existed immediately before |
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the effective date of this Act are continued in effect for purposes |
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of determining the amount of the credit an entity may claim and the |
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manner in which the entity may claim, sell, or assign the credit or |
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claim any carryforward of the credit. |
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SECTION 4. Chapter 231, Insurance Code, as added by this |
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Act, applies only to a report originally due on or after January 1, |
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2022. |
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SECTION 5. This Act takes effect January 1, 2022. |