TITLE 13. CULTURAL RESOURCES

PART 1. TEXAS STATE LIBRARY AND ARCHIVES COMMISSION

CHAPTER 4. SCHOOL LIBRARY PROGRAMS

SUBCHAPTER A. STANDARDS AND GUIDELINES

The Texas State Library and Archives Commission (commission) proposes amendments to §4.2, concerning School Library Programs: Collection Development Standards.

BACKGROUND. The proposed amendments are necessary to implement Senate Bill (SB) 13, 89th Regular Session (2025), which amended portions of the Texas Education Code, Subchapter B, Chapter 33, related to school libraries.

House Bill 900, 88th Regular Session (2023) amended Education Code, §33.021, to require the commission, with approval by majority vote of the State Board of Education (SBOE), to develop and adopt standards for school library collection development that a school district shall adhere to in developing or implementing the district's library collection development policies. The commission adopted these standards at 13 Texas Administrative Code §4.2 on December 14, 2023.

SB 13 added definitions in new §33.020 (Definitions) and added or clarified requirements in §33.021 (Library Standards) for the school library collection development standards. Therefore, the commission finds it necessary to amend §4.2 to comply with the statutes as amended. In addition, SB 13 added new §§33.023-33.027, relating to parental access to a library catalog and access by the parent's child to certain library materials, parental access to student library records, local school advisory councils, acquisition of library materials, and the challenge or appeal of library materials. Because portions of these new statutes relate to existing provisions of the school library collection development standards, the commission finds it necessary to amend additional portions of §4.2 to ensure the collection development standards are consistent with the statutes.

The commission originally considered draft amendments to §4.2 at its August 1, 2025, meeting. At that meeting, the commission approved forwarding the draft to the members of the SBOE designated to work with the commission on the draft standards. After the August 1 meeting, Texas State Board of Education Appointee on Library Collection Standards Julie Pickren provided SBOE's official feedback to commission staff. Representatives of the commission met with SBOE Chair Aaron Kinsey and SBOE Member Pickren to discuss the draft standards on October 2, 2025. After that meeting, the commission made additional changes to the standards. The standards now proposed reflect input of the SBOE while adhering to standards for the efficient promulgation of state agency rules, including avoiding the duplication of existing statutory language. These standards as proposed for amendment remain a baseline on which school districts may build and further specify procedures and requirements to suit local needs.

EXPLANATION OF PROPOSED AMENDMENTS.

A proposed amendment to subsection (a) adds the term "library" before "materials" for consistency with the term as defined by Educ. Code, §33.020(3). An amendment to this subsection also adds the statutory citation for the definition of "library materials" to enable individuals to locate and review the full statutory definition. If Educ. Code, §33.030(3) is amended in the future, the rule will remain up-to-date and no amendments to the rule language will be necessary.

A proposed amendment to paragraph (c)(6) adds "catalog" to clarify that the access plan must, at a minimum, allow efficient parental access to both the school district's physical and online library catalogs.

Proposed amendments to subparagraph (c)(7)(B) separate the subparagraph into clauses to provide greater clarity in the subparagraph's requirements and reinforce that each item stands alone as an individual requirement. An amendment to clause (i) updates the statutory reference for the definition of "harmful material" to Educ. Code, §33.020(1) as added by SB 13. Another proposed amendment updates the reference to Board of Education v. Pico, 457 U.S. 853 (1982) consistent with Educ. Code, §33.021(d)(2)(A)(iii) as amended by SB 13. Other amendments to §4.2(c)(7)(B) add new requirements added to Educ. Code, §33.021 for a school district's collection development policy- that the collection development policy must prohibit the possession, acquisition, and purchase of library material containing indecent or profane content and library material that refers a person to an Internet website containing content prohibited by the rule. Finally, proposed amendments update and correct punctuation throughout the subparagraph.

A proposed amendment to subparagraph (c)(7)(D) adds library mobile applications and any other library catalog a student may access to the scope of the collection development standards as required by SB 13.

A proposed amendment to subparagraph (c)(7)(H) adds the requirement that a collection development policy must demonstrate a commitment to compliance with the Children's Internet Protection Act as required by SB 13.

A proposed amendment to subsection (d) adds a requirement to consider recommendations of a local school library advisory council (LSLAC) if a district has established one when evaluating materials for inclusion in a school library. SB 13 authorized school districts to establish LSLACs but does not require school districts to establish one. The proposed amendment also includes the statutory citation for LSLACs, which includes the membership of LSLACs.

Proposed amendments to subsection (e) change "legal guardian" to "person standing in parental relation" consistent with SB 13 and add that a person residing in the school district may request reconsideration of a specific item in their school district's library catalog as established by SB 13. Additional amendments to this subsection update the reference to the form used to request reconsideration of an item and define "reasonable timeframe" for review and final decision on reconsideration to mean no longer than 90 days after the date the request for reconsideration is received, as established by SB 13. Finally, a proposed amendment to the subsection requires that a school district prohibit students enrolled in the district from accessing material that is going through the reconsideration process until the district takes action on the material as established by SB 13.

The commission proposes additional amendments throughout §4.2 to ensure correct grammar and punctuation.

FISCAL IMPACT. Sarah Karnes, Director, Library Development and Networking, has determined that for each of the first five years the proposed amendments are in effect, there are no reasonably foreseeable fiscal implications for the state or local governments as a result of enforcing or administering the rules, as proposed.

PUBLIC BENEFIT AND COSTS. Ms. Karnes has determined that for each of the first five years the proposed amendments are in effect, the anticipated public benefit will be increased transparency in a public school library's collection development policies and processes and consistency across the state. There are no anticipated economic costs to persons required to comply with the proposed amendments.

LOCAL EMPLOYMENT IMPACT STATEMENT.The proposal has no impact on local economy; therefore, no local employment impact statement under Government Code, §2001.022 is required.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT STATEMENT. There will be no adverse economic effect on small businesses, micro-businesses, or rural communities; therefore, a regulatory flexibility analysis under Government Code, §2006.002 is not required.

COST INCREASE TO REGULATED PERSONS. The proposed amendments do not impose or increase a cost on regulated persons, including another state agency, a special district, or a local government.Therefore, the commission is not required to take any further action under Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT. In compliance with Government Code, §2001.0221, the commission provides the following government growth impact statement. For each year of the first five years the proposed amendments will be in effect, the commission has determined the following:

1. The proposed amendments will not create or eliminate a government program;

2.Implementation of the proposed amendments will not require the creation of new employee positions or the elimination of existing employee positions;

3. Implementation of the proposed amendments will not require an increase or decrease in future legislative appropriations to the commission;

4. The proposed amendments will not require an increase or decrease in fees paid to the commission;

5. The proposal will not create a new regulation;

6. The proposal will not expand or repeal an existing regulation;

7. The proposed amendments will not increase the number of individuals subject to the proposal's applicability; and

8. The proposed amendments will not affect this state's economy.

TAKINGS IMPACT ASSESSMENT. No private real property interests are affected by this proposal, and the proposal does not restrict or limit an owner's right to their property that would otherwise exist in the absence of government action. Therefore, the proposed amendments do not constitute a taking under Government Code, §2007.043.

REQUEST FOR IMPACT INFORMATION. The commission requests, from any person required to comply with the rule as proposed for amendment or any other interested person, information related to the cost, benefit, or effect of the rule as proposed for amendment, including any applicable data, research, or analysis. Please submit the requested information to rules@tsl.texas.gov no later than 30 days from the date of publication in the Texas Register.

REQUEST FOR PUBLIC COMMENT. Written comments on the proposed new sections may be submitted to Sarah Karnes, Director, Library Development and Networking Division, Texas State Library and Archives Commission, P.O. Box 12927, Austin, Texas, 78711, or via email at rules@tsl.texas.gov. To be considered, a written comment must be received no later than 30 days from the date of publication in the Texas Register.

STATUTORY AUTHORITY.The amendments are proposed under Education Code, §33.021, which requires the commission to adopt standards for school library collection development that a school district shall adhere to in developing or implementing the district's library collection development policies.

CROSS REFERENCE TO STATUTE.Government Code, Chapter 441 and Education Code, Chapter 33.

§4.2. School Library Programs: Collection Development Standards.

(a) Each Texas public school district board or governing body must approve and institute a collection development policy that describes the processes and standards by which a school library acquires, maintains, and withdraws library materialsas defined by Education Code, §33.020(3).

(b) A school library collection should include materials that are age appropriate and suitable to the campus and students it serves and include a range of materials. A school library collection should:

(1) Enrich and support the Texas Essential Knowledge and Skills (TEKS) and curriculum established by Education Code, §28.002 (relating to Required Curriculum), while taking into consideration students' varied interests, maturity levels, abilities, and learning styles;

(2) Foster growth in factual knowledge, literary appreciation, aesthetic values, and societal standards;

(3) Encourage the enjoyment of reading, foster high-level thinking skills, support personal learning, and encourage discussion based on rational analysis; and

(4) Represent the ethnic, religious, and cultural groups of the state and their contribution to Texas, the nation, and the world.

(c) A school library collection development policy must:

(1) Describe the purpose and collection development goals;

(2) Designate the responsibility for collection development;

(3) Establish procedures for the evaluation, selection, acquisition, reconsideration, and deselection of materials;

(4) Consider the distinct age groups, grade levels, and possible access to materials by all students within a campus;

(5) Include a process to determine and administer student access to material rated by library material vendors as "sexually relevant" as defined by Education Code, §35.001 consistent with any policies adopted by the Texas Education Agency and local school board requirements;

(6) Include an access plan that, at a minimum, allows efficient parental access to the school district's library catalog and online library catalog; and

(7) Comply with all applicable local, state, and federal laws and regulations. Specifically, a collection development policy must:

(A) Recognize that parents are the primary decision makers regarding their student's access to library material;

(B) Prohibit the possession, acquisition, and purchase of:

(i) harmful material, as defined by Education Code, §33.020(1); [, as defined by Penal Code, §43.24,]

(ii) library material rated sexually explicit material by the selling library material vendor under Education Code, §35.002; [, or]

(iii) library material that is pervasively vulgar or educationally unsuitable as referenced in Board of Education v. Pico [v. Board of Education], 457 U.S. 853 (1982); [,]

(C) Recognize that obscene content is not protected by the First Amendment to the United States Constitution;

(D) Be required for all library materials available for use or display, including material contained in school libraries, classroom libraries, [and] online catalogs, library mobile applications, and any other library catalog a student may access;

(E) Ensure schools provide library catalog transparency, including, but not limited to:

(i) Online catalogs that are publicly available; and

(ii) Information about titles and how and where material can be accessed;

(F) Recommend schools communicate effectively with parents regarding collection development, including, but not limited to:

(i) Access to district/campus policies relating to school libraries;

(ii) Consistent access to library resources; and

(iii) Opportunities for students, parents, educators, and community members to provide feedback on library materials and services; [and]

(G) Prohibit the removal of material based solely on the ideas contained in the material or the personal background of the author of the material or characters in the material; and[.]

(d) Evaluation of materials as referenced in this section includes a consideration of the factors described in subsection (b) of this section, consideration of local priorities and school district standards, including recommendations of a local school library advisory council if the district has established one under Education Code, §33.025, and at least two of the following:

(1) Consideration of recommendations from parents, guardians, and local community members;

(2) Consultation with the school district's educators and library staff and/or consultation with library staff of similarly situated school districts and their collections and collection development policies;

(3) An extensive review of the text of item;

(4) The context of a work, including consideration of the contextual characteristics, overall fit within existing school library collection, and potential support of the school curriculum; or

(5) Consideration of authoritative reviews of the items from sources such as professional journals in library science, recognized professional education or content journals with book reviews, national and state award recognition lists, library science field experts, and highly acclaimed author and literacy expert recommendations.

(e) A reconsideration process as referenced in this section should ensure that any parent or person standing in parental relation to [legal guardian of] a student [currently] enrolled in the school district, a person employed by [or employee of] the [school] district, or a person residing in the district may request the reconsideration of a specific item in their school district's library catalog. A reconsideration process should:

(1) Establish a uniform procedure an individual must follow when filing a request;

(2) Require a school district to include a form adopted by the Texas Education Agency to request a reconsideration of an item on the school's public internet website if the school has a public internet website or ensure the form is publicly available at a school district administrative office;

(3) Require that the completed [request for reconsideration] form be distributed to the superintendent or superintendent designee, school librarian, [and] school district board of trustees or governing body at the time of submission;

(4) Include a reasonable timeframe, approved by the school board, for the review and final decision by a committee charged with the review of the item in its entirety. A district should convene a review committee in accordance with criteria established by the district to ensure a thorough and fair process. A reasonable timeframe should take no longer than 90 days after the date the request for reconsideration is received and take into account:

(A) The time necessary to convene a committee to meet and review the item;

(B) Flexibility that may be necessary depending on the number of pending reconsideration requests; and

(C) Other factors relevant to a fair and consistent process, including informing the requester on the progress of the review in a timely fashion;

(5) Prohibit students enrolled in the district from accessing the material until the district takes action in response to the request for reconsideration [Establish a uniform process approved by the school district board of trustees or governing body for the treatment of any library material undergoing reconsideration];

(6) Include a review and appeal process approved by the school district board of trustees or governing body; and

(7) Provide that if an item has gone through the reconsideration process and remains in the collection, a school district may not be required to reconsider an item within two calendar years of the final decision.

(f) School districts should ensure a professional librarian certified by the State Board for Educator Certification or other dedicated professional library staff trained on proper collection development standards is responsible for the selection and acquisition of library materials.

(g) A school district must develop collection assessment and evaluation procedures to periodically appraise the quality of library materials in the school library to ensure the library's goals, objectives, and information needs are serving its school community and should stipulate the means to weed or update the collection.

(h) A school district's collection development policy should be reviewed at least every three years and updated as necessary.

(i) School districts may add procedures to these minimum requirements to satisfy local needs so long as the added procedures do not conflict with these minimum requirements.

(j) School districts are responsible for ensuring their school libraries implement and adhere to these collection development standards.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 14, 2025.

TRD-202504169

Sarah Swanson

General Counsel

Texas State Library and Archives Commission

Earliest possible date of adoption: December 28, 2025

For further information, please call: (512) 463-5460

PART 2. TEXAS HISTORICAL COMMISSION

CHAPTER 13. TEXAS HISTORIC PRESERVATION TAX CREDIT PROGRAM

The Texas Historical Commission (hereafter referred to as the Commission) proposes amendments to §13.1 and §13.2 of Title 13, Part 2, Chapter 13 of the Texas Administrative Code (relating to the Texas Historic Preservation Tax Credit Program). These changes are needed to implement House Bill 4044 introduced by Representative Meyer and passed into law during the 89th Legislative session. These changes address the addition of public institutions of higher education as eligible recipients under certain circumstances.

The proposed amendments include a provision that specifies that an institution of higher education or university system as defined in Section 61.003, Education Code, will not be subject to the depreciation and tax-exempt use provisions as defined in Section 47(c)(2) of the Internal Revenue Code, as laid out in Texas Tax Code §172.102(b). The change applies to eligible costs and expenses incurred on or after the effective date of the act, January 1, 2026, until the amendment expires on January 1, 2035.

FISCAL NOTE. Joseph Bell, Executive Director, has determined that for the first five-year period the rules are in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the rules.

PUBLIC BENEFIT. Mr. Bell has also determined that for each year of the first five-year period the rules are in effect the public benefit anticipated as a result of the implementation of these rules will be the certified rehabilitation of certain designated historic buildings on public university campuses.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. Mr. Bell has also determined that there will be no impact on rural communities, small businesses, or micro-businesses as a result of implementing these rules. Accordingly, no regulatory flexibility analysis, as specified in Texas Government Code §2006.002, is required.

ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT. There are no anticipated economic costs to persons who are required to comply with the amendments to these rules, as proposed. There is no effect on local economy for the first five years that the proposed new section is in effect; therefore, no local employment impact statement is required under Texas Government Code §2001.022 and 2001.024(a)(6).

GOVERNMENT GROWTH IMPACT STATEMENT. During the first five years that the amendments would be in effect, the proposed amendments: will not create or eliminate a government program; will not result in the addition or reduction of employees; will not require an increase or decrease in future legislative appropriations; will not create a new regulation; will not repeal an existing regulation; and will not result in an increase or decrease in the number of individuals subject to the rule. Implementation of this legislation will lead to an increase in fees paid to a state agency through application fees collected in accordance with Texas Government Code §442.005(f) and 13 Texas Administrative Code §13.1(3). During the first five years that the amendments would be in effect, the proposed amendments will positively affect the Texas economy through the creation of construction-related jobs.

TAKINGS IMPACT ASSESSMENT. The Commission has determined that no private real property interests are affected by this proposal and the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT. Comments on the proposal may be submitted to Joseph Bell, Executive Director, Texas Historical Commission, P.O. Box 12276, Austin, Texas 78711. Comments will be accepted for 30 days after publication in the Texas Register.

STATUTORY AUTHORITY. These amendments are proposed under the authority of Texas Government Code §442.005(q), which provides the Commission with the authority to promulgate rules to reasonably affect the purposes of the Commission, and Texas Government Code §172.110, of the Texas Tax Code, which authorizes the Commission to adopt rules necessary to implement the Tax Credit for Certified Rehabilitation of Certified Historic Structures.

CROSS REFERENCE TO OTHER LAW. No other statutes, articles, or codes are affected by these amendments.

§13.1. Definitions.

The following words and terms when used in these rules shall have the following meanings unless the context clearly indicates otherwise:

(1) Applicant--The entity that has submitted an application for a building or structure it owns or for which it has a contract to purchase.

(2) Application--A fully completed Texas Historic Preservation Tax Credit Application form submitted to the Commission, which includes three parts:

(A) Part A - Evaluation of Significance, to be used by the Commission to make a determination whether the building is a certified historic structure;

(B) Part B - Description of Rehabilitation, to be used by the Commission to review proposed projects for compliance with the Standards for Rehabilitation; and

(C) Part C - Request for Certification of Completed Work, to be used by the Commission to review completed projects for compliance with the work approved under Part B.

(3) Application fee--The fee charged by the Commission and paid by the applicant for the review of Part B and Part C of the application as follows:

Figure: 13 TAC §13.1(3) (No change.)

(4) Audited cost report--Such documentation as defined by the Comptroller in 34 TAC Chapter 3, Tax Administration.

(5) Building--Any edifice enclosing a space within its walls, and usually covered by a roof, the purpose of which is principally to shelter any form of human activity, such as shelter or housing, or to provide working, office, parking, display, or sales space. The term includes, among other examples, banks, office buildings, factories, warehouses, barns, railway or bus stations, and stores and may also be used to refer to a historically and functionally related unit, such as a courthouse and jail or a house and barn. Functional constructions made usually for purposes other than creating human shelter or activity such as bridges, windmills, and towers are not considered buildings under this definition and are not eligible to be certified historic structures.

(6) Certificate of Eligibility--A document issued by the Commission to the owner, following review and approval of a Part C application, that confirms the property to which the eligible costs and expenses relate is a certified historic structure and the rehabilitation qualifies as a certified rehabilitation; and specifies the date the certified historic structure was first placed in service after the rehabilitation.

(7) Certified historic structure--A building or buildings located on a property in Texas that is certified by the Commission as:

(A) listed individually in the National Register of Historic Places;

(B) designated as a Recorded Texas Historic Landmark under §442.006, Texas Government Code, or as a State Antiquities Landmark under Chapter 191, Texas Natural Resources Code; §21.6 and §26.3(66) and (67) of this title (relating to Recorded Texas Historic Landmark Designation and Definitions, respectively); 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 certified local district as per 36 CFR §67.9.

(8) Certified local district--A local historic district certified by the United States Department of the Interior in accordance with 36 CFR §67.9.

(9) Certified rehabilitation--The rehabilitation of a certified historic structure that the Commission has certified as meeting the Standards for Rehabilitation. If the project is submitted for the federal rehabilitation tax credit, it must be reviewed by the National Park Service prior to a determination that it meets the requirements for a certified rehabilitation under this rule. In the absence of a determination for the federal rehabilitation tax credit, the Commission shall have the sole responsibility for certifying the project.

(10) Commission--The Texas Historical Commission.

(11) Comptroller--The Texas Comptroller of Public Accounts.

(12) Contributing--A building in a historic district considered to be historically, culturally, or architecturally significant according to the criteria established by state or federal government, including those formally promulgated by the National Park Service and the United States Department of the Interior at 36 CFR Part 60 and applicable National Register bulletins.

(13) Credit--The tax credit for the certified rehabilitation of certified historic structures available pursuant to Chapter 172 of the Texas Tax Code.

(14) District--A geographically definable area, urban, or rural, possessing a significant concentration, linkage, or continuity of sites, building, structures, or objects united by past events geographically but linked by association or history.

(15) Eligible costs and expenses--The qualified rehabilitation expenditures as defined by §47(c)(2), Internal Revenue Code, including rehabilitation expenses as set out in 26 CFR §1.48-12(c), incurred during the project, except as otherwise specified in Chapter 172 of the Texas Tax Code, or, for a time period beginning January 1, 2026, until the statute reverts on January 1, 2035, by authorized investment of funds by an institution of higher education or university system as defined by Section 61.003, Education Code, if the other provisions of Section 47(c)(2) are met.

(16) Federal rehabilitation tax credit--A federal tax credit for 20% of qualified rehabilitation expenditures with respect to a certified historic structure, as defined in §47, Internal Revenue Code; 26 CFR §1.48-12; and 36 CFR Part 67.

(17) Functionally related buildings--A collection of buildings that were constructed or used to serve and support an overall single purpose during their period of significance. Examples include but are not limited to: a residence and carriage house; a multi-building apartment complex; a multi-building industrial or commercial complex; or buildings constructed as a campus. Buildings within a typical neighborhood or downtown commercial historic district, among other property types, do not count as functionally related buildings with other buildings in the district, unless there is a certain historical attachment other than community development. Functionally related buildings owned by one entity are viewed as a single property while those owned by separate entities are viewed as separate properties.

(18) National Park Service--The agency of the U.S. Department of the Interior that is responsible for certifying projects to receive the federal rehabilitation tax credit.

(19) Owner--A person, partnership, company, corporation, whether for profit or not, governmental body, an institution of higher education or university system or any other entity holding a legal or equitable interest in a Property or Structure, which can include a full or partial ownership interest. Not all of these owner entities can qualify as an applicant for the credit, based on the requirements listed in Chapter 172 of the Texas Tax Code. A long-term lessee of a property may be considered an owner if their current lease term is at a minimum 27.5 years for residential rental property or 39 years for nonresidential real property, as referenced by §47(c)(2), Internal Revenue Code.

(20) Phased development--A rehabilitation project which may reasonably be expected to be completed in two or more distinct states of development, as defined by United States Treasury Regulation 26 CFR §1.48-12(b)(2)(v). Each phase of a phased development can independently support an Application for a credit as though it was a stand-alone rehabilitation, as long as each phase meets the definition of a Project. If any completed phase of the rehabilitation project does not meet the requirements of a certified rehabilitation, future applications by the same owner for the same certified historic structure will not be considered.

(21) Placed in Service--A status obtained upon completion of the rehabilitation project as described in Part B of the application, and any subsequent amendments, and documented in Part C of the application. Evidence of the date a property is placed in service includes a certificate of occupancy issued by the local building official and/or an architect's certificate of substantial completion. Other documents will suffice when certificates of occupancy and/or substantial completion are not available for a specific project, including final contractor invoices or other verifiable statements of completion. Alternate documents should be approved by the Commission before submission. Placed in Service documentation must indicate the date that work was completed.

(22) Project--A specified scope of work, as described in a rehabilitation plan submitted with Part B of the application and subsequent amendments, comprised of work items that will be fully completed and Placed in Service. Examples of a project may include, but are not limited to, a whole building rehabilitation, rehabilitation of individual floors or spaces within a building, repair of building features, or replacement of building systems (such as mechanical, electrical, and plumbing systems). Partial or incomplete scopes of work, such as project planning and design, demolition, or partial completion of spaces, features, or building systems are not included in this definition as projects. Per §13.6(f) of this title (relating to Application Review Process), the Commission's review encompasses the entire building and site even if other work items are not included in a submitted project.

(23) Property--A parcel of real property containing one or more buildings or structures that is the subject of an application for a credit.

(24) Rehabilitation--The process of returning a building or buildings to a state of utility, through repair or alteration, which makes possible an efficient use while retaining those portions and features of the building and its site and environment which are significant.

(25) Rehabilitation plan--Descriptions, drawings, construction plans, and specifications for the proposed rehabilitation of a certified historic structure in sufficient detail to enable the Commission to evaluate compliance with the Standards for Rehabilitation.

(26) Standards for Rehabilitation--The United States Secretary of the Interior's Standards for Rehabilitation as defined by the National Park Service in 36 CFR §67.7.

(27) Structure--A building; see also certified historic structure. "Structure" may be used in place of the word "building," but all tax credit projects must involve rehabilitation of a building as defined in §13.1(5) of this title.

(28) Tax Credit--A credit earned against either the state franchise tax or the insurance premium tax per Chapter 172 of the Texas Tax Code and any limitations provided therein.

§13.2. Qualification Requirements.

(a) Qualification for credit.

(1) An Owner is eligible for a credit for eligible costs and expenses incurred in the certified rehabilitation of a certified historic structure if:

(A) the rehabilitated certified historic structure is placed in service on or after September 1, 2013;

(B) the Owner has an ownership interest in the certified historic structure in the year during which the structure is placed in service after the rehabilitation; and

(C) the total amount of the eligible costs and expenses incurred exceeds $5,000.

(2) A property for which eligible costs and expenses are submitted for the credit must meet Internal Revenue Code §47(c)(2) which includes:

(A) non-residential real property;

(B) residential rental property; or

(C) other property types exempted from parts of Internal Revenue Code §47(c)(2) as described in Chapter 172 of the Texas Tax Code.

(b) Eligible costs and expenses. Eligible costs and expenses means those costs and expenses allowed pursuant to Internal Revenue Code §47(c)(2) or as exempted by Chapter 172 of the Texas Tax Code. Such eligible costs and expenses, include, but are not limited to:

(1) expenditures associated with structural components as defined by United States Treasury Regulation §1.48-1(e)(2) including walls, partitions, floors, ceilings, windows and doors, stairs, elevators, escalators, sprinkler systems, fire escapes, components of central air conditioning, heating, plumbing, and electrical systems, and other components related to the operation or maintenance of the building;

(2) architectural services;

(3) engineering services;

(4) construction management and labor, materials, and reasonable overhead;

(5) subcontracted services;

(6) development fees;

(7) construction period interest and taxes; and

(8) other items referenced in Internal Revenue Code §47(c)(2).

(c) Ineligible costs and expenses. Eligible costs and expenses as defined in Internal Revenue Code §47(c)(2) do not include the following:

(1) the cost of acquiring any interest in the property;

(2) the personal labor by the applicant;

(3) any cost associated with the enlargement of an existing building;

(4) site work expenditures, including any landscaping, sidewalks, paving, decks, outdoor lighting remote from the building, fencing, retaining walls or similar expenditures; or

(5) any cost associated with the rehabilitation of an outbuilding or ancillary structure unless it is certified by the Commission to contribute to the historical significance of the property.

(d) Eligibility date for costs and expenses.

(1) Part A of the Texas Historic Preservation Tax Credit Certification Application must be submitted prior to the building being placed in service per §13.1(21) of this title (relating to Definitions). Projects that have been placed in service prior to submission of Part A of the application do not qualify for the program.

(2) While the credit may be claimed for eligible costs and expenses incurred prior to the filing of an application, potential applicants are urged to file Parts A and B of the application at the earliest possible date. This will allow the Commission to review the application and provide guidance to the applicant that will increase the chances that the application will ultimately be approved and the credit received.

(e) Phased development. Part B applications for rehabilitation of the same certified historic structure may be submitted by the same owner only if they describe clearly defined phases of work that align with a cost report that separates the eligible costs and expenses by phase. Separate Part B and C applications shall be submitted for review by the Commission prior to issuance of a certificate of eligibility for each phase.

(f) Amount of credit. The total amount of credit available is twenty-five percent (25%) of the aggregate eligible costs and expenses incurred in the certified rehabilitation of the certified historic structure.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 14, 2025.

TRD-202504159

Joseph Bell

Executive Director

Texas Historical Commission

Earliest possible date of adoption: December 28, 2025

For further information, please call: (512) 463-6100