Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 24-0883.01 Pierce Lively x2059
HOUSE BILL 24-1125
House Committees Senate Committees
Finance
A BILL FOR AN ACT
C
ONCERNING THE CREATION OF AN INCOME TAX CREDIT FOR101
QUALIFIED COSTS INCURRED IN THE CONVERSION OF A102
COMMERCIAL STRUCTURE TO A RESIDENTIAL STRUCTURE .103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill creates a new refundable tax credit to be claimed in tax
years commencing on or after January 1, 2026, and before January 1,
2036. The credit may be claimed for certain costs related to the
conversion of a commercial structure to a residential structure.
In order to claim the credit, a person must submit an application,
HOUSE SPONSORSHIP
Valdez and Soper,
SENATE SPONSORSHIP
Priola and Bridges,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. a conversion plan, and an estimate of the qualified conversion
expenditures under the conversion plan (documents) to the governor's
office of economic development (office). Within 90 days of receiving
documents, the office shall review the documents, determine whether to
reserve a tax credit for the applicant, and provide written notice to an
applicant for whom the office determines to reserve a tax credit.
The office may not reserve a tax credit in excess of $3 million for
any one project and may not reserve more than $5 million of tax credits
during any calendar year. If the office reserves less than $5 million in a
calendar year, the office may reserve a total of $5 million plus the amount
less than $5 million that the office did not reserve in the previous calendar
year.
An applicant for whom the office reserves a tax credit shall
commence a conversion plan and incur 20% or more of the estimated
qualified conversion expenditures (expenditures) within 18 months of
receiving notice from the office that it is reserving a tax credit for the
applicant. Such an applicant shall place in service the conversion set forth
in a conversion plan on or before December 31, 2035.
After an applicant has placed a conversion in service, the applicant
shall notify the office and provide the office with documentation of the
applicant's certification of the expenditures and a certified public
accountant's review of the expenditures. Within 90 days of receiving this
documentation, the office shall review this documentation and issue a tax
credit certificate to the applicant in an amount equal to 25% of the
expenditures.
If, as of the last day of any taxable year within 15 taxable years
from when the applicant placed a conversion in service, the structure that
is the subject of the conversion plan is not a qualified residential
structure, the qualified applicant shall add the full amount of the credit to
its return as a recaptured credit for that taxable year.
The bill requires the office, in consultation with the department of
revenue, to submit an annual report to the general assembly on the impact
of the tax credit and to promulgate any policies and procedures necessary
to implement the tax credit.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 39-22-560 as2
follows:3
39-22-560. Tax credit for qualified costs incurred in4
converting commercial structures to residential structures - tax5
HB24-1125-2- preference performance statement - legislative declaration -1
definitions - repeal. (1) Legislative declaration. T
HE GENERAL2
ASSEMBLY HEREBY FINDS AND DECLARES THAT IT IS THE INTENT OF THE3
GENERAL ASSEMBLY THAT A QUALIFIED APPLICANT WHO CLAIMS THE TAX4
CREDIT ALLOWED BY THIS SECTION IN CONNECTION WITH THE CONVERSION5
OF A QUALIFIED COMMERCIAL BUILDING MAY ALSO CLAIM OTHER6
APPLICABLE TAX CREDITS FOR THAT SAME CONVERSION .7
(2) Tax preference performance statement. I
N ACCORDANCE8
WITH SECTION 39-21-304 (1), WHICH REQUIRES EACH BILL THAT CREATES9
A NEW TAX EXPENDITURE TO INCLUDE A TAX PREFERENCE PERFORMANCE10
STATEMENT AS PART OF A STATUTORY LEGISLATIVE DECLARATION , THE11
GENERAL ASSEMBLY FINDS AND DECLARES THAT :12
(a) T
HE GENERAL LEGISLATIVE PURPOSES OF THE TAX CREDIT13
ALLOWED BY THIS SECTION ARE:14
(I) T
O INDUCE CERTAIN DESIGNATED BEHAVIOR BY TAXPAYERS ;15
AND16
(II) T
O PROVIDE TAX RELIEF FOR CERTAIN BUSINESSES OR17
INDIVIDUALS;18
(b) T
HE SPECIFIC LEGISLATIVE PURPOSE OF THE TAX CREDIT19
ALLOWED BY THIS SECTION IS TO ADDRESS THE SHORTAGE OF AFFORDABLE20
HOUSING IN THE STATE AND THE UNDERUTILIZATION OF CERTAIN21
COMMERCIAL STRUCTURES BY ENCOURAGING THE OWNERS OF CERTAIN22
COMMERCIAL STRUCTURES TO CONVERT THOSE PROPERTIES TO ALLOW FOR23
RESIDENTIAL USE; AND24
(c) T
HE GENERAL ASSEMBLY AND STATE AUDITOR SHALL MEASURE25
THE EFFECTIVENESS OF THE CREDIT IN ACHIEVING THE PURPOSES SPECIFIED26
IN SUBSECTIONS (2)(a) AND (2)(b) OF THIS SECTION BASED ON THE27
HB24-1125
-3- INFORMATION REPORTED BY THE OFFICE PURSUANT TO SUBSECTION (13)1
OF THIS SECTION.2
(3) Definitions. A
S USED IN THIS SECTION, UNLESS THE CONTEXT3
OTHERWISE REQUIRES:4
(a) "C
ONVERSION" MEANS THE NECESSARY REAL PROPERTY5
IMPROVEMENT OF A QUALIFIED COMMERCIAL STRUCTURE SO THAT THE6
QUALIFIED COMMERCIAL STRUCTURE BECOMES A QUALIFIED RESIDENTIAL7
STRUCTURE.8
(b) "C
ONVERSION PLAN" MEANS A PLAN SUBMITTED, IN A FORM9
AND MANNER DETERMINED BY THE OFFICE , BY A QUALIFIED APPLICANT TO10
THE OFFICE PURSUANT TO SUBSECTION (5) OF THIS SECTION.11
(c) "D
EPARTMENT" MEANS THE DEPARTMENT OF REVENUE .12
(d) "O
FFICE" MEANS THE COLORADO OFFICE OF EC ONOMIC13
DEVELOPMENT CREATED IN SECTION 24-48.5-101.14
(e) (I) "Q
UALIFIED APPLICANT" MEANS ANY PERSON THAT INCURS15
QUALIFIED CONVERSION COSTS AND SATISFIES ONE OR MORE OF THE16
FOLLOWING CRITERIA:17
(A) O
WNS A TITLE TO A QUALIFIED COMMERCIAL STRUCTURE ;18
(B) O
WNS A PROSPECTIVE TITLE TO A QUALIFIED COMMERCIAL19
STRUCTURE IN THE FORM OF A PURCHASE AGREEMENT OR AN OPTION TO20
PURCHASE;21
(C) O
WNS A LEASEHOLD INTEREST IN A QUALIFIED COMMERCIAL22
STRUCTURE FOR A TERM OF NOT LESS THAN THIRTY -NINE YEARS; OR23
(D) O
WNS A LEASEHOLD INTEREST FOR A TERM OF NOT LESS THAN24
FIVE YEARS IN A QUALIFIED COMMERCIAL STRUCTURE THAT IS LOCATED IN25
A COMMUNITY OUTSIDE THE METROPOLITAN AREA ;26
(II) A
QUALIFIED APPLICANT INCLUDES A PERSON WHO IS EXEMPT27
HB24-1125
-4- FROM TAXATION PURSUANT TO SECTION 39-22-112.1
(f) "Q
UALIFIED COMMERCIAL STRUCTURE " MEANS A STRUCTURE2
OF WHICH AT LEAST SEVENTY -FIVE PERCENT OF THE TOTAL SQUARE3
FOOTAGE IS DESIGNATED FOR COMMERCIAL USE .4
(g) "Q
UALIFIED CONVERSION EXPENDITURES " MEANS ELIGIBLE5
AMOUNTS ACTUALLY INCURRED AND PAID BY A QUALIFIED APPLICANT TO6
PLACE A CONVERSION IN SERVICE , AS DETERMINED BY THE OFFICE .7
Q
UALIFIED CONVERSION EXPENDITURES INCLUDE , BUT ARE NOT LIMITED8
TO:9
(I) E
LEVATOR MODIFICATIONS;10
(II) W
INDOW MODIFICATIONS;11
(III) U
TILITY UPGRADES;12
(IV) P
LUMBING MODIFICATIONS; AND13
(V) F
ACADE CHANGES.14
(h) "Q
UALIFIED RESIDENTIAL STRUCTURE" MEANS A STRUCTURE15
OF WHICH AT LEAST FIFTY PERCENT OF THE TOTAL SQUARE FOOTAGE IS16
USED FOR PEOPLE TO LIVE IN AS THEIR PRIMARY RESIDENCE AND THAT17
SATISFIES ALL LEGAL REQUIREMENTS FOR PERMANENT OCCUPANCY18
DWELLING UNITS.19
(4) Reservation of credit and credit allowed. (a) O
N OR AFTER20
J
ANUARY 1, 2025, BUT PRIOR TO JANUARY 1, 2033, THE OFFICE MAY21
RESERVE THE ALLOCATION OF A CREDIT AGAINST THE INCOME TAXES22
IMPOSED BY THIS ARTICLE 22 FOR A QUALIFIED APPLICANT PURSUANT TO23
SUBSECTION (7) OF THIS SECTION.24
(b) I
N ORDER TO CLAIM A CREDIT RESERVED PURSUANT TO25
SUBSECTION (4)(a) OF THIS SECTION, A QUALIFIED APPLICANT MUST PLACE26
IN SERVICE THE CONVERSION SET FORTH IN THE CONVERSION PLAN27
HB24-1125
-5- SUBMITTED PURSUANT TO SUBSECTION (5) OF THIS SECTION ON OR BEFORE1
D
ECEMBER 31, 2035.2
(c) T
HE OFFICE SHALL FINALIZE THE ISSUANCE OF ANY TAX CREDIT3
ISSUED PURSUANT TO THIS SECTION ON OR BEFORE JUNE 30, 2036.4
(d) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY5
1,
2026, AND BEFORE JANUARY 1, 2036, A QUALIFIED APPLICANT MAY6
CLAIM A CREDIT AGAINST THE INCOME TAXES IMPOSED BY THIS ARTICLE7
22
IN AN AMOUNT DETERMINED BY THE RESERVATION OF AN ALLOCATION8
OF A CREDIT AGAINST THE INCOME TAXES IMPOSED BY THIS ARTICLE 229
ISSUED BY THE OFFICE PURSUANT TO SUBSECTION (7) OF THIS SECTION.10
(5) Submission and review of application, conversion plan, and11
qualified conversion expenditures estimate. (a) T
HE OFFICE SHALL12
REVIEW A QUALIFIED APPLICANT'S APPLICATION, CONVERSION PLAN, AND13
ESTIMATE OF THE QUALIFIED CONVERSION EXPENDITURES TO :14
(I) D
ETERMINE WHETHER SUCH INFORMATION IS COMPLETE ;15
(II) M
AKE A PRELIMINARY DETERMINATION OF WHETHER THE16
CONVERSION PLAN IS A CERTIFIED CONVERSION ;17
(III) D
ETERMINE WHETHER THE CONVERSION PLAN IS A CERTIFIED18
CONVERSION;19
(IV) D
ETERMINE WHICH CONVERSION PLANS TO APPROVE FOR THE20
RESERVATION FOR THE BENEFIT OF THE QUALIFIED APPLICANT OF AN21
ALLOCATION OF A TAX CREDIT AS PROVIDED IN SUBSECTION (9)(a) OF THIS22
SECTION.23
(b) (I) F
OR ANY APPLICATION, CONVERSION PLAN, AND ESTIMATE24
OF THE QUALIFIED CONVERSION EXPENDITURES THAT THE OFFICE25
DETERMINES PURSUANT TO SUBSECTION (5)(a)(I) OF THIS SECTION IS26
INCOMPLETE, THE OFFICE SHALL NOTIFY THE QUALIFIED APPLICANT IN27
HB24-1125
-6- WRITING OF THE OFFICE'S DETERMINATION AND SHALL REMOVE THE1
APPLICATION, CONVERSION PLAN, AND ESTIMATE OF THE QUALIFIED2
CONVERSION EXPENDITURES FROM THE REVIEW PROCESS .3
(II) I
F A QUALIFIED APPLICANT RESUBMITS AN APPLICATION ,4
CONVERSION PLAN, AND ESTIMATE OF THE QUALIFIED CONVERSION5
EXPENDITURES, THE OFFICE MAY CHARGE A NEW APPLICATION FEE IN AN6
AMOUNT SPECIFIED IN ACCOR DANCE WITH SUBSECTION (6) OF THIS7
SECTION.8
(c) T
HE OFFICE SHALL MAKE THE PRELIMINARY DETERMINATION9
OF WHETHER THE CONVERSION PLAN IS A CERTIFIED CONVERSION10
PURSUANT TO SUBSECTION (5)(a)(II) OF THIS SECTION WITHIN NINETY11
DAYS.12
(d) I
N MAKING THE FINAL DETERMINATION OF WHETHER A13
CONVERSION PLAN IS A CERTIFIED CONVERSION PLAN PURSUANT TO14
SUBSECTION (5)(a)(III) OF THIS SECTION, THE OFFICE SHALL DEVELOP15
STANDARDS THAT MUST INCLUDE , BUT ARE NOT LIMITED TO:16
(I) A
DETAILED COST ESTIMATE FOR THE CONVERSION PLAN ; 17
(II) E
VIDENCE OF SITE CONTROL OF THE SITE WHERE THE18
CONVERSION WILL OCCUR; AND19
(III) T
HE FINANCING OR FUNDING THAT IS AVAILABLE FOR THE20
CONVERSION PLAN.21
(e) I
N MAKING THE DETERMINATION OF WHICH CONVERSION PLANS22
TO APPROVE FOR THE RESERVATION FOR THE BENEFIT OF THE QUALIFIED23
APPLICANT OF AN ALLOCATION OF A TAX CREDIT PURSUANT TO24
SUBSECTION (5)(a)(IV) OF THIS SECTION, THE OFFICE SHALL PRIORITIZE25
CONVERSION PLANS THAT ARE CLOSER TO BEING FINALIZED , BUT THE26
OFFICE SHALL ALSO REQUEST AND CONSIDER ADDITIONAL CRITERIA27
HB24-1125
-7- INCLUDING, BUT NOT LIMITED TO:1
(I) T
HE GEOGRAPHIC DIVERSITY OF THE APPLICATIONS AND2
CONVERSION PLANS THAT QUALIFIE D APPLICANTS HAVE SUBMITTED TO3
THE OFFICE;4
(II) W
HETHER THE CONVERSION PLAN IS RECEIVING PROPERTY TAX5
ABATEMENTS, CREDITS, REBATES, OR OTHER INCENTIVES FROM A LOCAL6
TAXING JURISDICTION;7
(III) W
HETHER THE CONVERSION WILL OCCUR WITHOUT THE8
ISSUANCE OF A TAX CREDIT PURSUANT TO THIS SECTION ;9
(IV) W
HETHER THE QUALIFIED APPLICANT WILL RECEIVE A10
FEDERAL INCENTIVE FOR THE CONVERSION ;11
(V) T
HE PROXIMITY OF THE QUALIFIED COMMERCIAL STRUCTURE12
TO PUBLIC TRANSPORTATION; AND13
(VI) T
HE EXPECTED QUALIFICATION OF THE BUILDING FOR A14
CERTIFIABLE SUSTAINABLE PROGRAM BOTH BEFORE AND AFTER THE15
CONVERSION.16
(f) T
HE OFFICE SHALL ONLY REVIEW AN APPLICATION, CONVERSION17
PLAN, AND ESTIMATE OF THE QUALIFIED CONVERSION EXPENDITURES18
SUBMITTED IN CONNECTION WITH A PROPERTY FOR WHICH A PROPERTY19
ADDRESS, LEGAL DESCRIPTION, OR OTHER SPECIFIC LOCATION IS PROVIDED20
IN THE APPLICATION AND CONVERSION PLAN .21
(6) Application and issuance fees. (a) F
OR A QUALIFIED22
COMMERCIAL STRUCTURE FOR WHICH THE AMOUNT OF THE TAX CREDIT23
REQUESTED BY A QUALIFIED APPLICANT PURSUANT TO THIS SECTION IS24
TWO HUNDRED FIFTY THOUSAND DOLLARS OR MORE , THE OFFICE MAY25
IMPOSE A REASONABLE APPLICATION FEE ON A QUALIFIED APPLICANT THAT26
DOES NOT EXCEED FIVE HUNDRED DOLLARS . FOR A QUALIFIED27
HB24-1125
-8- COMMERCIAL STRUCTURE FOR WHICH THE AMOUNT OF TAX CREDIT1
REQUESTED PURSUANT TO THIS SECTION IS LESS THAN TWO HUNDRED2
FIFTY THOUSAND DOLLARS , THE OFFICE MAY IMPOSE A REASONABLE3
APPLICATION FEE ON A QUALIFIED APPLICANT THAT DOES NOT EXCEED4
TWO HUNDRED FIFTY DOLLARS .5
(b) T
HE OFFICE MAY IMPOSE ON A QUALIFIED APPLICANT A6
REASONABLE ISSUANCE FEE OF UP TO THREE PERCENT OF THE AMOUNT OF7
THE TAX CREDIT ISSUED, WHICH MUST BE PAID BEFORE THE TAX CREDIT IS8
ISSUED TO THE QUALIFIED APPLICANT.9
(c) A
NY FEE REVENUE COLLECTED PURSUANT TO THIS SUBSECTION10
(6)
MUST BE APPLIED TO THE ADMINISTRATION OF THE TAX CREDIT11
CREATED BY THIS SECTION.12
(7) Reservation of tax credits. A
RESERVATION OF TAX CREDITS13
IS PERMITTED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION . IF14
THE OFFICE RESERVES A TAX CREDIT FOR THE BENEFIT OF A QUALIFIED15
APPLICANT, THE OFFICE SHALL NOTIFY THE QUALIFIED APPLICANT IN16
WRITING OF THE RESERVATION AND THE AMOUNT RESERVED . THE17
RESERVATION OF A TAX CREDIT BY THE OFFICE FOR A QUALIFIED18
APPLICANT DOES NOT ENTITLE THE QUALIFIED APPLICANT TO AN ISS UANCE19
OF ANY TAX CREDITS UNTIL THE QUALIFIED APPLICANT COMPLIES WITH ALL20
THE OTHER REQUIREMENTS SPECIFIED IN THIS SECTION FOR THE ISSUANCE21
OF THE TAX CREDIT. WHEN THE OFFICE APPROVES A RESERVATION OF TAX22
CREDITS, THE OFFICE MAY ALSO IMPOSE ADDITIONAL REQUIREMENTS ,23
WHICH A QUALIFIED APPLICANT SHALL SATISFY AS PART OF PLACING A24
CONVERSION IN SERVICE, BEFORE A TAX CREDIT IS ISSUED TO THE25
QUALIFIED APPLICANT.26
(8) Deadline for incurring specified amount of estimated27
HB24-1125
-9- qualified conversion expenditures - proof of compliance - audit of1
conversion expenditure certification - issuance of tax credit2
certificate - commercial structures. (a) (I) A
QUALIFIED APPLICANT3
RECEIVING A RESERVATION OF TAX CREDITS PURSUANT TO SUBSECTION (7)4
OF THIS SECTION SHALL INCUR TWENTY PERCENT OR MORE OF THE5
ESTIMATED QUALIFIED CONVERSION EXPENDITURES CONTAINED IN THE6
APPLICATION AND CONVERSION PLAN NOT LATER T HAN EIGHTEEN MONTHS7
AFTER THE DATE OF ISSUANCE OF THE WRITTEN NOTICE FROM THE OFFICE8
TO THE QUALIFIED APPLICANT GRANTING THE RESERVATION OF A TAX9
CREDIT.10
(II) A
QUALIFIED APPLICANT FOR WHOM THE OFFICE HAS RESERVED11
A TAX CREDIT SHALL SUBMIT EVIDENCE OF COMPLIANCE WITH THE12
PROVISIONS OF SUBSECTION (8)(a)(I) OF THIS SECTION. IF THE OFFICE13
DETERMINES THAT A QUALIFIED APPLICANT HAS FAILED TO COMPLY WITH14
THE REQUIREMENTS OF SUBSECTION (8)(a)(I) OF THIS SECTION, THE OFFICE15
SHALL PROMPTLY NOTIFY THE QUALIFIED APPLICANT AND MAY RESCIND16
THE ISSUANCE OF THE WRI TTEN NOTICE IT PREVIOUSLY GAVE THE17
QUALIFIED APPLICANT GRANTING THE RESERVATION OF A TAX CREDIT . IF18
THE OFFICE SO RESCINDS AN ISSUANCE OF THE WRITTEN NOTICE , THE19
QUALIFIED APPLICANT MAY SUBMIT A NEW APPLICATION , CONVERSION20
PLAN, AND ESTIMATE OF QUALIFIED CONVERSION EXPENDITURES FOR21
WHICH THE OFFICE MAY CHARGE A NEW APPLICATION FEE IN ACCORDANCE22
WITH SUBSECTION (6) OF THIS SECTION, AND THE TOTAL AMOUNT OF TAX23
CREDITS MADE AVAILABLE FOR RESERVATION IN THE CALE NDAR YEAR24
DURING WHICH THE OFFICE RESCINDS THE ISSUANCE OF WRITTEN NOTICE25
MUST INCREASE BY THE AMOUNT OF THE TAX CREDIT RESERVED IN THE26
WRITTEN NOTICE.27
HB24-1125
-10- (b) AFTER A QUALIFIED APPLICANT PLACES A CONVERSION IN1
SERVICE, THE QUALIFIED APPLICANT SHALL NOTIFY THE OFFICE THAT THE2
CONVERSION HAS BEEN PLACED IN SERVICE AND SHALL CERTIFY THE3
QUALIFIED CONVERSION EXPENDITURES . IN THIS NOTICE, THE APPLICANT4
SHALL INCLUDE A REVIEW OF THE CERTIFICATION BY A LICENSED5
CERTIFIED PUBLIC ACCOUNTANT THAT IS NOT AFFILIATED WITH THE6
QUALIFIED APPLICANT THAT ALIGNS WITH OFFICE POLICIES FOR7
CERTIFICATION OF QUALIFIED C ONVERSION EXPENDITURES . THE8
APPLICANT SHALL ALSO CERTIFY AND PROVIDE DOCUMENTS9
DEMONSTRATING THAT THE APPLICANT SATISFIED ANY REQUIREMENTS10
IMPOSED BY THE OFFICE PURSUANT TO SUBSECTION (7) OF THIS SECTION.11
W
ITHIN NINETY DAYS AFTER RECEIPT OF SUCH DOCUMENTATION FROM THE12
QUALIFIED APPLICANT, THE OFFICE SHALL REVIEW THE QUALIFIED13
APPLICANT'S DOCUMENTATION OF CONVERSION EXPENDITURES ,14
DETERMINE WHETHER THE DOCUMENTA TION SATISFIES THE CONVERSION15
PLAN AND OTHER REQUIREMENTS , AND, IF THE OFFICE DETERMINES THAT16
THE DOCUMENTATION SATISFIES THE CONVERSION PLAN AND OTHER17
REQUIREMENTS, THE OFFICE SHALL ISSUE A TAX CREDIT CERTIFICATE IN AN18
AMOUNT EQUAL TO TWENTY -FIVE PERCENT OF THE ACTUAL QUALIFIED19
CONVERSION EXPENDITURES , SUBJECT TO SUBSECTION (8)(c) OF THIS20
SECTION.21
(c) N
OTWITHSTANDING SUBSECTION (8)(b) OF THIS SECTION:22
(I) T
HE TOTAL AMOUNT OF THE TAX CREDIT CERTIFICATE ISSUED23
FOR ANY PARTICULAR PROJECT MUST NOT EXCEED THE AMOUNT OF THE24
TAX CREDIT RESERVATION ISSUED FOR THE PROJECT PURSUANT TO25
SUBSECTION (7) OF THIS SECTION; AND26
(II) T
HE AMOUNT OF A TAX CREDIT CERTIFICATE TO BE ISSUED FOR27
HB24-1125
-11- THE CONVERSION OF ANY SINGLE QUALIFIED COMMERCIAL STRUCTURE1
MUST NOT EXCEED THREE MILLION DOLLARS .2
(d) I
F THERE ARE ANY UNRESERVED AM OUNTS OF TAX CREDITS3
AVAILABLE PER SUBSECTION (9) OF THIS SECTION, AND IF THE AMOUNT OF4
QUALIFIED CONVERSION EXPENDITURES INCURRED BY THE QUALIFIED5
APPLICANT WOULD RESULT IN A QUALIFIED APPLICANT BEING ISSUED AN6
AMOUNT OF TAX CREDITS THAT EXCEEDS THE AMOUNT OF TAX CREDITS7
RESERVED FOR THE QUALIFIED APPLICANT PURSUANT TO SUBSECTION (7)8
OF THIS SECTION, THE QUALIFIED APPLICANT MAY APPLY TO THE OFFICE9
FOR THE ISSUANCE OF AN ADDITIONAL AMOUNT OF TAX CREDITS THAT10
EQUALS THE EXCESS BY SUBMITTING AN APPLICATION FOR ISSUANCE OF11
SUCH EXCESS TAX CREDITS IN A FORM AND MANNER DETERMINED BY THE12
OFFICE. THE OFFICE SHALL REVIEW THE APPLICATION IN THE SAME13
MANNER THAT IT REVIEWS ALL OTHER APPLICATIONS AND MAY APPROVE14
THE APPLICATION BY MEANS OF A SEPARATE CERTIFICATE AWARDING THE15
QUALIFIED APPLICANT AN ADDITIONAL TAX CREDIT .16
(9) Limit on aggregate amount of all tax credits that the office17
may reserve. (a) T
HE AGGREGATE AMOUNT OF ALL TAX CREDITS THAT18
THE OFFICE MAY RESERVE PURSUANT TO THIS SECTION MUST NOT EXCEED19
FIVE MILLION DOLLARS IN ANY CALENDAR YEAR , IN ADDITION TO THE20
AMOUNT OF ANY PREVIOUSLY RESERVED TAX CREDITS THAT WERE21
RESCINDED PURSUANT TO SUBSECTION (8)(a)(II) OF THIS SECTION DURING22
THE CALENDAR YEAR.23
(b) I
F THE OFFICE'S ISSUANCE OF A WRITTEN NOTICE TO A24
QUALIFIED APPLICANT FOR THE RESERVATION OF A TAX CREDIT WOULD25
CAUSE THE OFFICE TO EXCEED THE LIMIT OF TAX CREDITS THAT THE OFFICE26
MAY RESERVE FOR THAT CALENDAR YEAR PURSUANT TO SUBSECTION27
HB24-1125
-12- (9)(a) OF THIS SECTION, IN THE NEXT CALENDAR YEAR, THE OFFICE MAY1
ISSUE A WRITTEN NOTICE TO THE QUALIFIED APPLICANT FOR A2
RESERVATION OF A TAX CREDIT THAT IS EQUAL TO THE AMOUNT BY WHICH3
THE OFFICE WOULD EXCEED THE LIMIT IN SUBSECTION (9)(a) OF THIS4
SECTION.5
(c) N
OTWITHSTANDING SUBSECTION (9)(a) OF THIS SECTION, IF THE6
AGGREGATE AMOUNT OF ALL TAX CREDITS RESERVED BY THE OFFICE FOR7
ANY CALENDAR YEAR IS LESS THAN THE AMOUNT AVAILABLE AS8
CALCULATED PURSUANT TO SUBSECTION (9)(a) OF THIS SECTION, THEN9
THE AGGREGATE AMOUNT OF ALL TAX CREDITS THAT THE OFFICE MAY10
RESERVE IN THE NEXT CALENDAR YEAR IS INCREASED BY THE UNRESERVED11
AMOUNT.12
(d) A
NY TAX CREDITS RESERVED BY THE OFFICE PURSUANT TO THIS13
SECTION FOR A PARTNERSHIP, A LIMITED LIABILITY COMPANY TAXED AS A14
PARTNERSHIP, OR MULTIPLE OWNERS OF A PROPERTY MUST BE PASSED15
THROUGH TO THE PARTNERS , MEMBERS, OR OWNERS, INCLUDING ANY16
NONPROFIT ENTITY THAT IS A PARTNER , MEMBER, OR OWNER,17
RESPECTIVELY, ON A PRO RATA BASIS OR PURSUANT TO AN EXECUTED18
AGREEMENT AMONG THE PARTNERS , MEMBERS, OR OWNERS19
DOCUMENTING AN ALTERNATE DISTRIBUTION METHOD .20
(10) Filing tax credit certificate with income tax return. I
N21
ORDER TO CLAIM THE CREDIT AUTHORIZED BY THIS SECTION , A QUALIFIED22
APPLICANT SHALL FILE THE TAX CREDIT CERTIFICATE ISSUED BY THE23
OFFICE PURSUANT TO SUBSECTION (8) OF THIS SECTION WITH THE24
QUALIFIED APPLICANT'S STATE INCOME TAX RETURN . IF THE QUALIFIED25
APPLICANT IS EXEMPT FROM TAX PURSUANT TO SECTION 39-22-112 (1),26
THE QUALIFIED APPLICANT SHALL FILE A RETURN PURSUANT TO SECTION27
HB24-1125
-13- 39-22-601 (7)(b). THE AMOUNT OF THE TAX CREDIT THAT A QUALIFIED1
APPLICANT MAY CLAIM PURSUANT TO THIS SECTION IS THE AMOUNT2
STATED ON THE TAX CREDIT CERTIFICATE .3
(11) Refundability. T
HE ENTIRE TAX CREDIT TO BE ISSUED4
PURSUANT TO THIS SECTION MAY BE CLAIMED BY THE QUALIFIED5
APPLICANT IN THE TAXABLE YEAR IN WHICH THE CONVERSION IS PLACED6
IN SERVICE. IF THE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO THIS7
SECTION EXCEEDS THE AMOUNT OF INCOME TAXES OTHERWISE DUE ON THE8
INCOME OF THE QUALIFIED APPLICANT IN THE INCOME TAX YEAR FOR9
WHICH THE CREDIT IS BEING CLAIMED, OR THE QUALIFIED APPLICANT IS A10
PERSON WHO IS EXEMPT FROM TAXATION PURSUANT TO SECTION11
39-22-112,
NINETY PERCENT OF THE AMOUNT OF THE CREDIT NOT USED AS12
AN OFFSET AGAINST INCOME TAXES IN THE INCOME TAX YEAR IS REFUNDED13
TO THE QUALIFIED APPLICANT.14
(12) Compliance monitoring and recapture. (a) E
XCEPT AS15
PROVIDED IN SUBSECTION (12)(b) OF THIS SECTION, IF, AS OF THE LAST16
DAY OF ANY TAXABLE YEAR DURING THE COMPLIANCE PERIOD , THE17
STRUCTURE THAT IS THE SUBJECT OF A CONVERSION PLAN IS NOT A18
QUALIFIED RESIDENTIAL STRUCTURE , THE OFFICE SHALL NOTIFY THE19
QUALIFIED APPLICANT AND THE DEPARTMENT THAT THE CREDIT ALLOWED20
IN THIS SECTION IS DISALLOWED. THE QUALIFIED APPLICANT SHALL ADD21
THE FULL AMOUNT OF THE CREDIT TO ITS RETURN AS A RECAPTURED22
CREDIT FOR THE TAXABLE YEAR IN WHICH THE CREDIT IS DISALLOWED23
PURSUANT TO THIS SUBSECTION (12).24
(b) T
HE POTENTIAL INCREASE IN TAX REQUIRED PURSUANT TO25
SUBSECTION (12)(a) OF THIS SECTION SHALL NOT APPLY:26
(I) I
F A STRUCTURE IS NOT A QUALIFIED RESIDENTIAL STRUCTURE27
HB24-1125
-14- AS A RESULT OF A CASUALTY LOSS , IF SUCH LOSS IS RESTORED BY1
RECONSTRUCTION OR REPLACEMENT WITHIN A REASONABLE PERIOD2
ESTABLISHED BY THE OFFICE; OR3
(II) S
OLELY BY REASON OF THE DISPOSITION OF A QUALIFIED4
RESIDENTIAL STRUCTURE, OR AN INTEREST THEREIN, IF IT IS REASONABLY5
EXPECTED THAT THE STRUCTURE WILL CONTINUE TO BE OPERATED AS A6
QUALIFIED RESIDENTIAL STRUCTURE FOR THE REMAINDER OF THE7
COMPLIANCE PERIOD.8
(c) (I) T
HE OFFICE SHALL ESTABLISH REPORTING REQUIREMENTS9
TO MONITOR COMPLIANCE WITH THIS SUBSECTION (12), INCLUDING10
REQUIREMENTS REGARDING THE REPORTING OF A DISPOSITION OF A11
QUALIFIED RESIDENTIAL STRUCTURE BY THE QUALIFIED APPLICANT AND12
THE REPORTING REQUIRED FOR SUCH A STRUCTURE FOR THE REMAINDER13
OF THE COMPLIANCE PERIOD.14
(II) I
F A DISPUTE ARISES ABOUT WHETHER A STRUCTURE IS A15
QUALIFIED RESIDENTIAL STRUCTURE, THE OFFICE SHALL ADJUDICATE THE16
DISPUTE AND NOTIFY THE DEPARTMENT OF THE RESOLUTION .17
(III) N
OTWITHSTANDING SECTION 39-21-107 (2), IF A QUALIFIED18
RESIDENTIAL STRUCTURE, OR AN INTEREST THEREIN, IS DISPOSED OF19
DURING ANY TAXABLE YEAR DURING THE COMPLIANCE PERIOD , AND20
THEREAFTER THE STRUCTURE IS NOT A QUALIFIED RESIDENTIAL21
STRUCTURE:22
(A) T
HE QUALIFIED APPLICANT SHALL ADD THE FULL AMOUNT OF23
THE CREDIT TO ITS RETURN AS A RECAPTURED CREDIT FOR THE TAXABLE24
YEAR IN WHICH THE CREDIT IS DISALLOWED PURSUANT TO THIS25
SUBSECTION (12) NOTWITHSTANDING THE DISPOSITION OF THE QUALIFIED26
RESIDENTIAL STRUCTURE;27
HB24-1125
-15- (B) THE STATUTORY PERIOD FOR THE ASSESSMENT OF ANY1
DEFICIENCY WITH RESPECT TO THE DISALLOWED CREDIT MUST NOT EXPIRE2
BEFORE THE EXPIRATION OF THREE YEARS FROM THE DATE THE OFFICE IS3
NOTIFIED, IN SUCH A MANNER AS THE OFFICE DETERMINES , THAT THE4
STRUCTURE IS NOT A QUALIFIED RESIDENTIAL STRUCTURE ; AND5
(C) T
HE DEPARTMENT SHALL ASSESS ANY DEFICIENCY BEFORE THE6
EXPIRATION OF SUCH THREE -YEAR PERIOD TOGETHER WITH ANY7
APPLICABLE INTEREST AND PENALTY IMPOSED PURSUANT TO THIS ARTICLE8
22.9
(d) A
S USED IN THIS SUBSECTION (12), UNLESS THE CONTEXT10
OTHERWISE REQUIRES, "COMPLIANCE PERIOD" MEANS THE PERIOD OF11
FIFTEEN YEARS FOLLOWING THE TAXABLE YEAR IN WHICH THE QUALIFIED12
APPLICANT PLACED A CONVERSION IN SERVICE .13
(13) Reporting. N
O LATER THAN DECEMBER 31, 2027, AND,14
NOTWITHSTANDING THE REQUIREMENT IN SECTION 24-1-136 (11)(a)(I), NO15
LATER THAN DECEMBER 31 OF EACH YEAR THEREAFTER UNTIL 2036, THE16
OFFICE SHALL PROVIDE A WRITTEN REPORT TO THE GENERAL ASSEMBLY17
AND SHALL FURTHER MAKE THE REPORT AVAILABLE TO THE PUBLIC . IN18
CONNECTION WITH TAX CREDITS ISSUED PURSUANT TO THIS SECTION , THE19
REPORT MUST INCLUDE:20
(a) T
HE NUMBER OF PROJECTS CONVERTING QUALIFIED21
COMMERCIAL STRUCTURES TO QUALIFIED RESIDENTIAL STRUCTURES ;22
(b) T
HE NUMBER OF RESIDENTIAL UNITS PLANNED OR CREATED ;23
(c) T
HE OCCUPANCY RATE OF CREATED RESIDENTIAL UNITS ;24
(d) T
HE NUMBER OF RESIDENTIAL UNITS THAT ARE AFFORDABLE ;25
(e) T
HE COUNTIES IN WHICH QUALIFIED COMMERCIAL STRUCTURES26
WERE CONVERTED TO QUALIFIED COMMERCIAL RESIDENTIAL STRUCTURES ;27
HB24-1125
-16- (f) THE NONRESIDENTIAL USES IN QUALIFIED COMMERCIAL1
STRUCTURES THAT WERE CONVERTED TO QUALIFIED RESIDENTIAL2
STRUCTURES; AND3
(g) T
HE AMOUNT OF ANY DISALLOWED TAX CREDIT RECAPTURED4
PURSUANT TO SUBSECTION (12) OF THIS SECTION.5
(14) Policies and procedures. T
HE OFFICE MAY CREATE AND6
MODIFY POLICIES AND PROCEDURES AS NECESSARY TO FURTHER7
IMPLEMENT THE TAX CREDITS TO BE CLAIMED FOR THE CONVERSION OF8
QUALIFIED COMMERCIAL STRUCTURES PURSUANT TO THIS SECTION AND9
SHALL SOLICIT ADVICE FROM THE DEPARTMENT IN CREATING AND10
MODIFYING SUCH POLICIES AND PROCEDURES .11
(15) Repeal. T
HIS SECTION IS REPEALED, EFFECTIVE DECEMBER12
31,
2041.13
SECTION 2. Act subject to petition - effective date. This act14
takes effect at 12:01 a.m. on the day following the expiration of the15
ninety-day period after final adjournment of the general assembly; except16
that, if a referendum petition is filed pursuant to section 1 (3) of article V17
of the state constitution against this act or an item, section, or part of this18
act within such period, then the act, item, section, or part will not take19
effect unless approved by the people at the general election to be held in20
November 2024 and, in such case, will take effect on the date of the21
official declaration of the vote thereon by the governor.22
HB24-1125
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