Sec. 172.102. ELIGIBLE COSTS AND EXPENSES. (a) Subject to Subsections (b) and (c), in this chapter, "eligible costs and expenses" means qualified rehabilitation expenditures as defined by Section 47(c)(2), Internal Revenue Code. (b) Except as provided by Subsection (c), the depreciation and tax-exempt use provisions of Section 47(c)(2), Internal Revenue Code, do not apply to costs and expenses incurred by an entity exempted from the federal income tax under Section 501(a), Internal Revenue Code, or by an institution of higher education or university system as defined by Section 61.003 , Education Code, and those costs and expenses are eligible costs and expenses if the other provisions of Section 47(c)(2), Internal Revenue Code, are satisfied. (b) Except as provided by Subsection (c), the depreciation and tax-exempt use provisions of Section 47(c)(2), Internal Revenue Code, do not apply to costs and expenses incurred by an entity exempted from the federal income tax under Section 501(a), Internal Revenue Code, and those costs and expenses are eligible costs and expenses if the other provisions of Section 47(c)(2), Internal Revenue Code, are satisfied. (c) Expenditures by an entity described by Subsection (b) to rehabilitate a structure that is leased to a tax-exempt entity in a disqualified lease, as those terms are defined by Section 168(h), Internal Revenue Code, are not eligible costs and expenses. Redesignated and amended by Acts 2021, 87th Leg., R.S., Ch. 497 (H.B. 3777 ), Sec. 1, eff. January 1, 2022. Transferred, redesignated and amended from Tax Code, Subchapter S, Chapter 171 by Acts 2023, 88th Leg., R.S., Ch. 83 (S.B. 1013 ), Sec. 2, eff. September 1, 2023.
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