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General Assembly Raised Bill No. 5190
February Session, 2024
LCO No. 1537
Referred to Committee on COMMERCE
Introduced by:
(CE)
AN ACT CONCERNING THE HISTORIC HOMES REHABILITATION
TAX CREDIT.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 10-416 of the 2024 supplement to the general 1
statutes is repealed and the following is substituted in lieu thereof 2
(Effective January 1, 2025, and applicable to taxable and income years 3
commencing on or after January 1, 2025): 4
(a) As used in this section, the following terms shall have the 5
following meanings unless the context clearly indicates another 6
meaning: 7
(1) "Department" means the Department of Economic and 8
Community Development; 9
(2) "Historic home" means a building that: (A) Will contain one-to-10
four dwelling units of which at least one unit will be occupied as the 11
principal residence of the owner for not less than five years following 12
the completion of rehabilitation work, and (B) is (i) listed individually 13
on the National or State Register of Historic Places, or (ii) located in a 14 Raised Bill No. 5190
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district listed on the National or State Register of Historic Places, and 15
has been certified by the department as contributing to the historic 16
character of such district; 17
(3) "Nonprofit corporation" means a nonprofit corporation 18
incorporated pursuant to chapter 602 or any predecessor statutes 19
thereto, having as one of its purposes the construction, rehabilitation, 20
ownership or operation of housing and having articles of incorporation 21
approved by the Commissioner of Economic and Community 22
Development in accordance with regulations adopted pursuant to 23
section 8-79a or 8-84; 24
(4) "Owner" means (A) any taxpayer filing a state of Connecticut tax 25
return who possesses title to an historic home, or prospective title to an 26
historic home in the form of a purchase agreement or option to 27
purchase, or (B) a nonprofit corporation that possesses such title or 28
prospective title; 29
(5) "Qualified rehabilitation expenditures" means any costs incurred 30
for the physical construction involved in the rehabilitation of an historic 31
home, but excludes: (A) The owner's personal labor, (B) the cost of site 32
improvements, unless to provide building access to persons with 33
disabilities, (C) the cost of a new addition, except as may be required to 34
comply with any provision of the State Building Code or the Fire Safety 35
Code, (D) any cost associated with the rehabilitation of an outbuilding, 36
unless such building contributes to the historical significance of the 37
historic home, and (E) any nonconstruction cost such as architectural 38
fees, legal fees and financing fees; 39
(6) "Rehabilitation plan" means any construction plans and 40
specifications for the proposed rehabilitation of an historic home in 41
sufficient detail to enable the department to evaluate compliance with 42
the standards developed under the provisions of subsections (b), (c) and 43
(m) of this section; and 44
(7) "Occupancy period" means a period of five years during which 45
one or more owners occupy an historic home as such owner's or owners' 46 Raised Bill No. 5190
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primary residence. The occupancy period begins on the date the tax 47
credit voucher is issued by the Department of Economic and 48
Community Development. 49
(b) The Department of Economic and Community Development shall 50
administer a system of tax credit vouchers within the resources, 51
requirements and purposes of this section for owners rehabilitating 52
historic homes or taxpayers making contributions to qualified 53
rehabilitation expenditures. Any owner shall be eligible for a tax credit 54
voucher in an amount equal to thirty per cent of the qualified 55
rehabilitation expenditures. 56
(c) The department shall develop standards for the approval of 57
rehabilitation of historic homes for which a tax credit voucher is sought. 58
Such standards shall take into account whether the rehabilitation of an 59
historic home will preserve the historic character of the building. 60
(d) Prior to beginning any rehabilitation work on an historic home, 61
the owner shall submit a rehabilitation plan to the department for a 62
determination of whether such rehabilitation work meets the standards 63
developed under the provisions of subsections (b), (c) and (m) of this 64
section and shall also submit to the department an estimate of the 65
qualified rehabilitation expenditures. 66
(e) If the department certifies that the rehabilitation plan conforms to 67
the standards developed under the provisions of subsections (b), (c) and 68
(m) of this section, the department shall reserve for the benefit of the 69
owner an allocation for a tax credit equivalent to thirty per cent of the 70
projected qualified rehabilitation expenditures. 71
(f) Following the completion of rehabilitation of an historic home, the 72
owner shall notify the department that such rehabilitation has been 73
completed. The owner shall provide the department with 74
documentation of work performed on the historic home and shall certify 75
the cost incurred in rehabilitating the home. The department shall 76
review such rehabilitation and verify its compliance with the 77
rehabilitation plan. Following such verification, the department shall 78 Raised Bill No. 5190
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issue a tax credit voucher to either the owner rehabilitating the historic 79
home or to the taxpayer named by the owner as contributing to the 80
rehabilitation. The tax credit voucher shall be in an amount equivalent 81
to the lesser of (1) the tax credit reserved upon certification of the 82
rehabilitation plan under the provisions of subsection (e) of this section, 83
or (2) thirty per cent of the actual qualified rehabilitation expenditures. 84
In order to obtain a credit against any state tax due that is specified in 85
subsection (i) of this section, the holder of the tax credit voucher shall 86
file the voucher with the holder's state tax return. 87
(g) Before the department issues a tax credit voucher, the owner shall 88
deliver a signed statement to the department that provides that: (1) The 89
owner shall occupy the historic home as the owner's primary residence 90
during the occupancy period; (2) the owner shall convey the historic 91
home to a new owner who will occupy it as the new owner's primary 92
residence during the occupancy period; or (3) an encumbrance shall be 93
recorded, in favor of the local, state or federal government or other 94
funding source, that will require the owner or the owner's successors to 95
occupy the historic home as the primary residence of the owner or the 96
owner's successors for a period equal to or longer than the occupancy 97
period. A copy of any such encumbrance shall be attached to the signed 98
statement. 99
(h) The owner of an historic home shall not be eligible for a tax credit 100
voucher under subsections (b), (c) and (m) of this section, unless the 101
owner incurs qualified rehabilitation expenditures exceeding fifteen 102
thousand dollars. 103
(i) (1) The Commissioner of Revenue Services shall grant a tax credit: 104
(A) (i) For a taxpayer holding a tax credit voucher issued prior to 105
January 1, 2024, under subsections (d) to (h), inclusive, of this section, 106
against any tax due under chapter 207, 208, 209, 210, 211 or 212 in the 107
amount specified in the tax credit voucher. 108
(ii) Any unused portion of such credit under this subparagraph may 109
be carried forward to any or all of the four income years following the 110 Raised Bill No. 5190
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year in which the tax credit voucher is issued; 111
(B) (i) For a taxpayer described under subparagraph (A) of 112
subdivision (4) of subsection (a) of this section holding a tax credit 113
voucher issued on or after January 1, 2024, but prior to January 1, 2025, 114
under subsections (d) to (h), inclusive, of this section, against the tax due 115
under chapter 229 in the amount specified in the tax credit voucher. 116
(ii) If the amount of the tax credit voucher exceeds the taxpayer's 117
liability for the tax imposed under chapter 229, the Commissioner of 118
Revenue Services shall treat such excess as an overpayment and, except 119
as provided under section 12-739 or 12-742, shall refund the amount of 120
such excess, without interest, to the taxpayer; [and] 121
(C) (i) For an owner that is a nonprofit corporation holding a tax 122
credit voucher issued on or after January 1, 2024, but prior to January 1, 123
2025, under subsections (d) to (h), inclusive, of this section, against the 124
tax due under chapter 208a in the amount specified in the tax credit 125
voucher. 126
(ii) Any unused portion of such credit under this subparagraph may 127
be carried forward to any or all of the four income years following the 128
year in which the tax credit voucher is issued; and 129
(D) (i) For a taxpayer holding a tax credit voucher issued on or after 130
January 1, 2025, under subsections (d) to (h), inclusive, of this section, 131
against any tax due under chapter 207, 208, 208a, 209, 210, 211, 212 or 132
229 in the amount specified in the tax credit voucher. 133
(ii) If a taxpayer described under subparagraph (A) of subdivision (4) 134
of subsection (a) of this section holding such tax credit voucher claims a 135
credit against the tax imposed under chapter 229 and the amount of the 136
tax credit voucher exceeds the taxpayer's liability for such tax, the 137
Commissioner of Revenue Services shall treat such excess as an 138
overpayment and, except as provided under section 12-739 or 12-742, 139
shall refund the amount of such excess, without interest, to the taxpayer; 140 Raised Bill No. 5190
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(iii) If a taxpayer holding such tax credit voucher claims a credit 141
against the tax imposed under chapter 207, 208, 208a, 209, 210, 211 or 142
212, any unused portion of such credit under this subparagraph may be 143
carried forward to any of all of the four income years following the year 144
in which the tax credit voucher is issued. 145
(2) The Department of Economic and Community Development shall 146
provide a copy of the voucher to the Commissioner of Revenue Services 147
upon the request of said commissioner. 148
(j) A credit allowed under this section shall not exceed thirty 149
thousand dollars per dwelling unit for an historic home, except that 150
such credit shall not exceed fifty thousand dollars per such dwelling 151
unit for an owner that is a nonprofit corporation. 152
(k) The tax credit granted under subsection (i) of this section shall be 153
taken in the same tax year in which the tax credit voucher is issued. 154
(l) The aggregate amount of all tax credits that may be reserved by 155
the Department of Economic and Community Development upon 156
certification of rehabilitation plans under subsections (b) to (d), 157
inclusive, of this section shall not exceed three million dollars in any one 158
fiscal year. On and after July 1, 2015, seventy per cent of the tax credits 159
reserved pursuant to this section shall be for owners rehabilitating 160
historic homes that are located in a regional center as designated in the 161
state plan of conservation and development adopted by the General 162
Assembly pursuant to section 16a-30 or taxpayers making contributions 163
to qualified rehabilitation expenditures on historic homes that are 164
located in a regional center as designated in the state plan of 165
conservation and development adopted by the General Assembly 166
pursuant to section 16a-30. 167
(m) The Department of Economic and Community Development 168
may, in consultation with the Commissioner of Revenue Services, adopt 169
regulations in accordance with chapter 54 to carry out the purposes of 170
this section. 171 Raised Bill No. 5190
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This act shall take effect as follows and shall amend the following
sections:
Section 1 January 1, 2025, and
applicable to taxable and
income years commencing
on or after January 1, 2025
10-416
Statement of Purpose:
To allow the historic homes rehabilitation tax credit to be applied
against additional taxes.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]