Alabama 2023 Regular Session

Alabama House Bill HB253 Compare Versions

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44 By Representatives Clarke, Drummond, Chestnut, Gray, Pringle,
55 Simpson, Bracy, Jackson, Blackshear, Clouse, Baker, Wilcox,
66 Hall
77 RFD: Ways and Means Education
88 First Read: 04-Apr-23
99 2023 Regular Session
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19-A BILL
20-TO BE ENTITLED
21-AN ACT
18+Enrolled, An Act,
2219 Relating to taxation; to amend Sections 40-9F-31,
23-40-9F-33, and 40-9F-38, Code of Alabama 1975; to allow
24-rehabilitation credits to be tied to the year in which the
25-reservation is allocated; to provide for additional
26-rehabilitation credit allocations; to further provide for the
27-membership of the Historic Tax Credit Evaluating Committee and
28-the factors considered by the committee; and to make
29-nonsubstantive, technical revisions to update the existing
30-code language to current style.
20+40-9F-33, and 40-9F-38, Code of Alabama 1975; to further
21+provide certain age restrictions for structures to qualify for
22+tax credits; to allow rehabilitation credits to be tied to the
23+year in which the reservation is allocated; to provide for
24+additional rehabilitation credit allocations; to further
25+provide for the membership of the Historic Tax Credit
26+Evaluating Committee and the factors considered by the
27+committee; and to make nonsubstantive, technical revisions to
28+update the existing code language to current style.
3129 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
3230 Section 1. Sections 40-9F-31, 40-9F-33, and 40-9F-38,
3331 Code of Alabama 1975, are amended to read as follows:
3432 "§40-9F-31
3533 As used in this article, the following terms shall have
3634 the following meanings:
3735 (1) CERTIFIED HISTORIC STRUCTURE. A property located in
3836 Alabama this state which is at least 60 years of age, unless
3937 the structure is a historic structure located within the
4038 boundaries of a National Monument or Park as declared by the
39+United States Congress or the President of the United States,
40+in which case the federal age provisions shall apply, and is
41+certified by the Alabama Historical Commission as being
42+individually listed in the National Register of Historic
43+Places, eligible for listing in the National Register of
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70-United States Congress or the President of the United States,
71-in which case the federal age provisions shall apply, and is
72-certified by the Alabama Historical Commission as being
73-individually listed in the National Register of Historic
74-Places, eligible for listing in the National Register of
7573 Historic Places, or certified by the commission as
7674 contributing to the historic significance of a Registered
77-Historic District.
75+Historic District. For applications submitted after June 1,
76+2023, a property must be 75 years of age.
7877 (2) CERTIFIED REHABILITATION. Repairs or alterations to
7978 a certified historic structure that is certified by the
8079 commission as meeting the U.S. Secretary of the Interior's
8180 Standards for Rehabilitation which meet the requirements
8281 contained in Section 47(c)(2)(C) of the Internal Revenue
8382 Codeof 26 U.S.C. § 47 , as amended, or to a certified historic
8483 residential structure as defined in subdivision (3) .
8584 (3) CERTIFIED HISTORIC RESIDENTIAL STRUCTURE. A
8685 certified historic structure as defined in subdivision (1).
8786 (4)(3) COMMISSION. The Alabama Historical Commission
8887 and or its successor.
8988 (5)(4) COMMITTEE. The Historic Tax Credit Evaluating
9089 Committee established by this article.
9190 (6)(5) DEPARTMENT. The Alabama Department of Revenue or
9291 its successor.
9392 (7)(6) DISQUALIFYING USE. Any use of a certified
9493 historic residential structure that is occupied by an owner
9594 and used exclusively as a primary or secondary residence.
9695 (8)(7) OWNER. Any taxpayer filing a State of Alabama
9796 income tax return or any entity that is exempt from federal
97+income taxation pursuant to Section 501(c) of the Internal
98+Revenue Code26 U.S.C. § 501, as amended, that:
99+a. Owns owns title to a qualified structure, or
100+b. Owns owns a leasehold interest in a qualified
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127-income taxation pursuant to Section 501(c) of the Internal
128-Revenue Code26 U.S.C. § 501, as amended, that:
129-a. Owns owns title to a qualified structure, or
130-b. Owns owns a leasehold interest in a qualified
131130 structure for a term of not less than 39 years.
132131 An owner as defined herein shall not be considered a
133132 private user as defined in Section 40-9A-1.
134133 (9)(8) QUALIFIED REHABILITATION EXPENDITURES. Any
135134 expenditure as defined under Section 47(c)(2)(A) of the
136135 Internal Revenue Code 26 U.S.C. § 47, as amended, and the
137136 related regulations thereunder, and other reasonable expenses
138137 and costs expended in the rehabilitation of a qualified
139138 structure. For certified historic residential structures, this
140139 term shall mean expenses incurred by the taxpayer in the
141140 certified rehabilitation of a certified historic residential
142141 structure, including but not limited to preservation and
143142 rehabilitation work done to the exterior of a certified
144143 historic residential structure, repair and stabilization of
145144 historic structural systems, restoration of historic plaster,
146145 energy efficiency measures except insulation in frame walls,
147146 repairs or rehabilitation of heating, air conditioning, or
148147 ventilation systems, repairs or rehabilitation of electrical
149148 or plumbing systems exclusive of new electrical appliances and
150149 electrical or plumbing fixtures, and architectural,
151150 engineering, and land surveying fees. Qualified rehabilitation
152151 expenditures do not include the cost of acquisition of the
153152 qualified structure, the personal labor by the owner, or any
154153 cost associated with the rehabilitation of an outbuilding of
154+the qualified structure, unless the outbuilding is certified
155+by the commission to contribute to the historical significance
156+of the qualified structure.
157+(10)(9) QUALIFIED STRUCTURE. Certified historic
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184-the qualified structure, unless the outbuilding is certified
185-by the commission to contribute to the historical significance
186-of the qualified structure.
187-(10)(9) QUALIFIED STRUCTURE. Certified historic
188187 structures which are certified by the commission as meeting
189188 the requirements contained in Section 47(c)(1)(A)(i) and (ii)
190189 of the Internal Revenue Code 26 U.S.C. § 47, as amended, and to
191190 certified historic residential structures as defined herein .
192191 (11)(10) REGISTERED HISTORIC DISTRICT. Any district
193192 listed in the National Register of Historic Places and any
194193 district which is either of the following:
195194 a. Designated under Alabama or local law as containing
196195 criteria which substantially achieves the purpose of
197196 preserving and rehabilitating buildings of historic
198197 significance to the district.
199198 b. Certified by the U.S. Secretary of the Interior as
200199 meeting substantially all of the requirements for the listing
201200 of districts in the National Register of Historic Places.
202201 (12)(11) REHABILITATION PLAN. Construction plans and
203202 specifications for the proposed rehabilitation of a qualified
204203 structure in sufficient detail to enable the commission to
205204 evaluate compliance with the standards developed under this
206205 article.
207206 (13)(12) SUBSTANTIAL REHABILITATION. Rehabilitation of
208207 a qualified structure for which the qualified rehabilitation
209208 expenditures exceed 50 percent of the owner's original
210209 purchase price of the qualified structure or twenty-five
211210 thousand dollars ($25,000), whichever is greater."
211+"§40-9F-33
212+(a) The state portion of any tax credit against the tax
213+imposed by Chapter 18 for the taxable year in which the
214+reservation is allocated to a project or the certified
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241-"§40-9F-33
242-(a) The state portion of any tax credit against the tax
243-imposed by Chapter 18 for the taxable year in which the
244-reservation is allocated to a project or the certified
245244 rehabilitation is placed in service shall be equal to 25
246245 percent of the qualified rehabilitation expenditures for
247246 certified historic structures. No tax credit claimed for any
248247 certified rehabilitation may exceed five million dollars
249248 ($5,000,000) for all allowable property types except a
250249 certified historic residential structure, and fifty thousand
251250 dollars ($50,000) for a certified historic residential
252251 structure.
253252 (b) There is created within the Education Trust Fund a
254253 separate account named the Historic Preservation Income Tax
255254 Credit Account. The Commissioner of Revenue shall certify to
256255 the Comptroller the amount of income tax credits under this
257256 section and the Comptroller shall transfer into the Historic
258257 Preservation Income Tax Credit Account only the amount from
259258 sales tax revenues within the Education Trust Fund that is
260259 sufficient for the Department of Revenue to use to cover the
261260 income tax credits for the applicable tax year. The
262261 Commissioner of Revenue shall distribute the funds in the
263262 Historic Preservation Income Tax Credit Account pursuant to
264263 this section.
265264 (c) The entire tax credit must be claimed by the
266265 taxpayer for the taxable year in which the reservation is
267266 allocated to a project or the certified rehabilitation is
268267 placed in service. Tax credits shall not be claimed prior to
268+the taxable year in which the certified rehabilitation is
269+placed in service. Where the taxes owed by the taxpayer are
270+less than the tax credit, the taxpayer shall be entitled to
271+claim a refund for the difference. In the event that any
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298-the taxable year in which the certified rehabilitation is
299-placed in service. Where the taxes owed by the taxpayer are
300-less than the tax credit, the taxpayer shall be entitled to
301-claim a refund for the difference. In the event that any
302301 additional credit is allocated to the taxpayer for a given
303302 project, the additional credit must be claimed in the taxable
304303 year the additional credit is allocated to the taxpayer.
305304 (d)(1) For the tax years 2018 through 20272022, the
306305 aggregate amount of all tax credits that may be reserved in
307306 any one of such years by the commission and certification of
308307 rehabilitation plans under subsection (c) of Section
309308 40-9F-32(c) shall not exceed twenty million dollars
310309 ($20,000,000), plus any amount of previous reservations of tax
311310 credits that were rescinded under subsection (c) of Section
312311 40-9F-32(c) during the tax year. However, if all of the
313312 allowable tax credit amount for any tax year is not requested
314313 and reserved, any unreserved tax credits may be utilized by
315314 the commission in awarding tax credits in subsequent years;
316315 provided, however, that in no event shall a total of more than
317316 two hundred million dollars ($200,000,000) be reserved by the
318317 commission during the period from May 25, 2017, through
319318 December 31, 20272022, pursuant to this article . Applications
320319 shall not be received by the commission after the Historic Tax
321320 Credit Evaluating Committee has ranked projects with a total
322321 amount exceeding two hundred million dollars ($200,000,000).
323322 For purposes of this article, tax year shall mean the calendar
324323 year.
325324 (2) For the tax years 2023 through 2027, the aggregate
325+amount of all tax credits that may be reserved in any one of
326+such years by the commission and certification of
327+rehabilitation plans under Section 40-9F-32(c) shall not
328+exceed forty million dollars ($40,000,000) twenty million
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355-amount of all tax credits that may be reserved in any one of
356-such years by the commission and certification of
357-rehabilitation plans under Section 40-9F-32(c) shall not
358-exceed forty million dollars ($40,000,000) twenty million
359358 dollars ($20,000,000), plus any amount of previous
360359 reservations of tax credits that were rescinded under Section
361360 40-9F-32(c) during the tax year. However, if all of the
362361 allowable tax credit amount for any tax year is not requested
363362 and reserved, any unreserved tax credits may be utilized by
364363 the commission in awarding tax credits in subsequent years;
365364 provided, however, that in no event shall a total of more than
366365 two hundred million dollars ($200,000,000) be reserved by the
367366 commission during the period from May 25, 2017, through
368367 December 31, 2027, pursuant to this article.
369368 (3) For tax years 2023 through 2027, no tax credits
370369 shall be reserved for qualified structures the end use of
371370 which is proposed to be a disqualifying use.
372371 (4) For purposes of this article, "tax year" shall mean
373372 calendar year.
373+(5) In addition to the limits in subdivision (2), for
374+tax years 2024 through 2027, the commission may utilize an
375+additional amount up to a total of five million dollars
376+($5,000,000) to reduce the backlog of qualified applications.
374377 (e) Of the annual amount of the tax credits provided
375378 for in subsection (d), 40 percent shall be reserved to
376379 taxpayers with a certified rehabilitation project located in a
377380 county in which the population does not exceed 175,000
378381 according to the most recent federal decennial census. In the
379382 event applications are not received and credits are not
380383 allocated for projects in these areas by the close of the
381384 third quarter of the program year, the funds may revert for
382385 allocations of other project applications.
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412415 (f) Tax credits granted to a partnership, a limited
413416 liability company, S corporations, trusts, or estates, shall
414417 be claimed at the entity level and shall not pass through to
415418 the partners, members, or owners.
416419 (g) All or any portion of the income tax credits under
417420 this section and Section 40-9F-32 shall be transferable and
418421 assignable, subject to any notice and verification
419422 requirements to be determined by the department, without the
420423 requirement of transferring any ownership interest in the
421424 qualified structure or any interest in the entity which owns
422425 the qualified structure. Any tax credits transferred shall be
423426 at a value of at least 85 percent of the present value of the
424427 credits. However, once a credit is transferred, only the
425428 transferee may utilize such the credit and the credit cannot
426429 may not be transferred again. A transferee of the tax credits
427430 may use the amount of tax credits transferred to offset any
428431 income tax under Chapter 18. The entire tax credit must be
429432 claimed by the transferee for the taxable year in which the
430433 reservation is allocated to a project or the certified
431434 rehabilitation is placed in service. When the taxes owed by
432435 the transferee are less than the tax credit, the transferee
433436 shall be entitled to claim a refund for the difference. The
434437 department shall adopt a form transfer statement to be filed
435438 by the transferor with the department prior to the purported
436439 transfer of any credit issued under this article. The transfer
437440 statement form shall include the name and federal taxpayer
438441 identification number of the transferor and each transferee
439442 listed therein along with the amount of the tax credit to be
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469472 transferred to each transferee listed on the form. The
470473 transfer statement form shall also contain any other
471474 information as the department may from time to time reasonably
472475 require. For each transfer, the transferor shall file: (1) a
473476 completed transfer statement form; (2) a copy of the tax
474477 credit certificate issued by the commission documenting the
475478 amount of tax credits which the transferor intends to
476479 transfer; (3) a copy of the proposed written transfer
477480 agreement; and (4) a transfer fee payable to the department in
478481 the amount of one thousand dollars ($1,000) per transferee
479482 listed on the transfer statement form. The transferor shall
480483 file with the department a fully executed copy of the written
481484 transfer agreement with each transferee within 30 days after
482485 the completed transfer. Filing of the written transfer
483486 agreement with the department shall perfect the transfer with
484487 respect to the transferee. Within 30 days after the
485488 department's receipt of the fully executed written transfer
486489 agreement, the department shall issue a tax credit certificate
487490 to each transferee listed in the agreement in the amount of
488491 the tax credit so transferred. The certificate shall be used
489492 by the transferee in claiming the tax credit pursuant to
490493 subsections (e) and (f) of Section 40-9F-32. The department
491494 may adopt additional rules as are necessary to permit
492495 verification of the ownership of the tax credits, but shall
493496 not adopt any rules which unduly restrict or hinder the
494497 transfer of the tax credits."
495498 "§40-9F-38
496499 (a) There is established the Historic Tax Credit
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526529 Evaluating Committee, which shall review qualifying projects,
527530 approve credits for projects, and rank projects in the order
528531 in which the projects should receive tax credit reservations
529532 based on criteria established by the commission. The
530533 commission shall establish a review cycle for the committee
531534 beginning on January 1, 2018, provided that the committee
532535 shall meet at least quarterly unless no credits remain to be
533536 allocated. The Commissioner of Revenue shall be a nonvoting
534537 member of the committee and provide advisory and technical
535538 support. The committee shall consist of the following:
536539 (1) The Director of the Alabama Office of Minority
537540 Affairs.
538541 (2) The Executive Director of the Alabama Historical
539542 Commission.
540543 (3) The Finance Director.
541544 (4) The Director of the Alabama Department of Economic
542545 and Community Affairs.
543546 (5) The Secretary of Commerce.
544547 (6) Two members of the Alabama House of
545548 Representatives, at least one of which shall be a member of
546549 the minority party, to be appointed by the Speaker of the
547550 House of Representatives.
548551 (7) Two members of the Alabama Senate, at least one of
549552 which shall be a member of the minority party, to be appointed
550553 by the President Pro Tempore of the Senate.
551554 (8) The Chair of the Senate Finance Taxation Education
552555 Committee or his or her designee.
553556 (9) The Chair of the House Ways and Means Education
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583586 Committee or his or her designee.
584587 (b)(1) The Alabama Historical Commission shall adopt
585588 rules that shall set forth guidelines to be used by the
586589 committee in determining the allocation of credits. The
587590 guidelines shall set forth factors to be considered by the
588591 committee including all of the following :
589592 a. RelativeThe relative value of the proposed project
590593 to the particular community, including the maintenance of the
591594 historic fabric of the community ;.
592595 b. The possible return on investment for the community
593596 in which the proposed project is located ;.
594597 c. the The geographic distribution of projects ;.
595598 d. the The likelihood of the project proceeding without
596599 the historic tax credit authorized in this article ;.
597600 e. and The strength of local support for the proposed
598601 project.
599602 f. The leveraged investment ratio of the project, as
600603 determined by the total project investment divided by the
601604 amount of tax credits requested.
602605 g. The number of net new jobs the project will create
603606 in the state.
604607 h. The amount of overall project financing for which
605608 the applicant has firm, secured commitments prior to
606609 submitting its application.
607610 (2) Included in the information to be required for the
608611 evaluation submitted in the application of any project shall
609612 be any additional tax credits or state, federal, or local
610613 government grants that the applicant expects to utilize for
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640643 the construction of the project.
641644 (3) The committee shall establish a minimum threshold
642645 that a project must exceed before the project may be funded by
643646 the committee.
644647 (c) The committee may meet in person, remotely, or by
645648 using a hybrid model where some members attend in person and
646649 others attend remotely, pursuant to Section 36-25A-5.1. "
647650 Section 2. This act shall become effective immediately
648651 following its passage and approval by the Governor, or its
649652 otherwise becoming law.
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664+________________________________________________
665+Speaker of the House of Representatives
666+________________________________________________
667+President and Presiding Officer of the Senate
661668 House of Representatives
662-Read for the first time and referred
663-to the House of Representatives
664-committee on Ways and Means
665-Education
666-................04-Apr-23
667-Read for the second time and placed
668-on the calendar:
669- 1 amendment
670-................03-May-23
671-Read for the third time and passed
672-as amended
673-Yeas 102
674-Nays 0
675-Abstains 1
676-................09-May-23
669+I hereby certify that the within Act originated in and
670+was passed by the House 09-May-23, as amended.
677671 John Treadwell
678672 Clerk
673+Senate 06-Jun-23 Passed
674+House 06-Jun-23 Concurred in
675+ Senate Amendment
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