August 4, 2021

Volume XI, Number 216


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Utilizing Tax Credits to Finance Renovation for State Institutes of Higher Education

In 2017 the Texas Legislature passed House Bill 1003, which made the Texas Historic Preservation Tax Credit available to state university systems and other state institutions of higher education. Following this change, universities and institutions of higher education are now able to utilize these Texas state tax credits (“HTCs”) to offset the cost of renovation projects of historic buildings on their campuses.

To qualify, a project must meet the following requirements:

  1. The project must be for the renovation of a historic building.

  2. Architectural work on the renovation must meet certain rehabilitation standards.

  3. Cost of the renovation must be in excess of $5,000.

  4. An application for participation in the program must be submitted to the Texas Historic Commission before the project is completed.

  5. The project must have a documented placed in service date prior to January 1, 2022, provided that projects not completed by that time may be phased to so that completed items qualify for the tax credit.

Buildings must be designated as historic or be determined as eligible for historic designation to participate in the program. Generally, this includes listing in the National Register of Historic Places, designation as a Recorded Texas Historic Landmark or as a State Antiquities Landmark.  However, a building that is not already listed or designated may still be eligible provided it is at least 50 years old (constructed prior to 1971).

The Texas state HTC program provides a tax credit equal to 25% of the qualified costs of renovation of historic buildings. State universities and institutions of higher education are eligible to sell the HTCs earned by their projects. For example, if a Texas state university has a project to renovate a dormitory building constructed prior to 1971 with eligible renovation costs of $2.0 million, the project would be eligible for up to $500,000 in tax credits. Those tax credits can then be sold and the proceeds used to offset the total cost of renovation. 

© 2021 Winstead PC.National Law Review, Volume XI, Number 63

About this Author

Sarah Christian Tax Attorney Texas Winstead
Of Counsel

Sarah Christian is a member of Winstead’s Public Finance Practice Group. Sarah represents private and public sector clients in complex financing transactions involving the use of bond issuances and secured loan agreements to finance real estate development, solar projects, utility projects, education projects, healthcare projects and other development. Sarah also has experience in tax credit monetization transactions, property assessed clean energy (PACE) financing, and other public-private partnership financing transactions and represents end users and non-dealer...

David Dawson Financial Attorney Winstead Austin, TX
Shareholder; Chairman & CEO

David has over 25 years of experience in counseling clients in all aspects of bond counsel, financial structuring, and underwriting matters.

Unique Lawyer Experience

  • Public Private Partnerships
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  • Hotel Finance
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  • Underwriter, developer and corporation counsel for more than $2 billion in convention center hotel projects including the 800-room Austin, Texas,...
Stewart Whitehead Litigation Attorney Winstead Austin, TX
Managing Shareholder - Austin; Member of Board of Directors; Chair, Higher Education Industry Group

Stewart Whitehead has been a member of Winstead's litigation practice since 1997. Stewart has successfully served as lead counsel in construction trials and arbitrations in Texas and beyond. Stewart has obtained multi-million dollar trial and arbitration verdicts and has negotiated multi-million dollar settlements in favor of his clients. Stewart’s experience includes representing clients in projects such as commercial and residential construction and development, transportation and drainage, governmental buildings and developments, public works projects, industrial and warehouse...