H.B. 424
LEGISLATIVE GENERAL COUNSEL
6 Approved for Filing: S. Elder 6
6 02-08-23 3:52 PM 6
H.B. 424
1 HISTORIC REHABILITATION TAX CREDIT AMENDMENTS
2 2023 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Carl R. Albrecht
5 Senate Sponsor: ____________
6
7LONG TITLE
8General Description:
9 This bill modifies the tax credit related to expenditures for rehabilitating a historic
10building.
11Highlighted Provisions:
12 This bill:
13 <defines terms;
14 <expands eligibility for the tax credit to include rehabilitation expenditures made for
15certain historic commercial buildings;
16 <provides that a person may assign all or a portion of a historic rehabilitation tax
17credit; and
18 <makes technical and conforming changes.
19Money Appropriated in this Bill:
20 None
21Other Special Clauses:
22 This bill provides a special effective date.
23Utah Code Sections Affected:
24AMENDS:
25 59-7-609, as enacted by Laws of Utah 1995, Chapter 42
26 59-10-1006, as renumbered and amended by Laws of Utah 2006, Chapter 223
27
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28Be it enacted by the Legislature of the state of Utah:
29 Section 1. Section 59-7-609 is amended to read:
30 59-7-609. Historic preservation credit.
31 (1) As used in this section:
32 (a) "Certified historic building" means a building that:
33 (i) is listed on the National Register of Historic Places within three years of taking the
34credit under this section; or
35 (ii) (A) is located in a National Register Historic District; and
36 (B) has been designated by the State Historic Preservation Office as being of
37significance to the district.
38 (b) "Commercial" means a building used to conduct business.
39 (c) "Historic preservation credit" means the tax credit described in Subsection (2).
40 (d) "Qualified claimant" means:
41 (i) (A) a taxpayer that qualifies for a historic preservation credit; or
42 (B) a person that is assigned a historic preservation credit; and
43 (ii) has a written certification as provided in Subsection (3) or (4).
44 (e) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
45the rehabilitation and restoration of the physical elements of the building.
46 (ii) "Qualified rehabilitation expenditures" includes the historic decorative elements,
47and the upgrading of the structural, mechanical, electrical, and plumbing systems.
48 (iii) "Qualified rehabilitation expenditures" does not include expenditures related to:
49 (A) the taxpayer's personal labor;
50 (B) cost of acquisition of the property;
51 (C) any expenditure attributable to the enlargement of an existing building;
52 (D) rehabilitation of a certified historic building without the approval required in
53Subsection (3); or
54 (E) any expenditure attributable to landscaping and other site features, outbuildings,
55garages, and related features.
56 (f) "Residential" means a building used for residential use, either owner occupied or
57income producing.
58 [(1)] (2) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed 02-08-23 3:52 PM H.B. 424
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59to a taxpayer subject to Section 59-7-104, as a credit against the tax due,] A taxpayer may
60claim a nonrefundable tax credit in an amount equal to 20% of qualified rehabilitation
61expenditures, [costing] if the qualified rehabilitation expenditures:
62 (i) cost more than $10,000[,]; and
63 (ii) are incurred in connection with any residential or commercial certified historic
64building. [When qualifying expenditures of more than $10,000 are incurred, the credit allowed
65by this section shall apply to the full amount of expenditures.]
66 [(b) All rehabilitation work to which the credit may be applied shall be approved by the
67State Historic Preservation Office prior to completion of the rehabilitation project as meeting
68the Secretary of the Interior's Standards for Rehabilitation so that the office can provide
69corrective comments to the taxpayer in order to preserve the historical qualities of the
70building.]
71 (b) (i) A qualified claimant may assign all or a portion of a historic preservation credit
72to which the qualified claimant is entitled.
73 (ii) There is no limit on the number of transactions for the assignment of all or a
74portion of a historic preservation credit.
75 (3) (a) The office shall issue a historic preservation credit certificate to a taxpayer if the
76office:
77 (i) approves all rehabilitation work for which a taxpayer may claim a tax credit as
78meeting the Secretary of the Interior's Standards for Rehabilitation before completion of the
79rehabilitation project so that the office can provide corrective comments to the taxpayer to
80preserve the historic qualities of the building;
81 (ii) determines that the rehabilitation project conforms with the approved rehabilitation
82work; and
83 (iii) verifies the property is a residential or commercial certified historic building and
84the amount of the taxpayer's qualified rehabilitation expenditures.
85 (b) The tax credit certificate shall list the amount of the historic preservation credit that
86the taxpayer is eligible to claim.
87 (4) (a) To assign a historic preservation credit to another person, a qualified claimant
88shall provide a written notice to the State Historic Preservation Office, in a form established by
89the State Historic Preservation Office, that includes: H.B. 424 02-08-23 3:52 PM
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90 (i) the qualified claimant's written certificate and other proof that the qualified claimant
91is assigning all or a portion of the historic preservation credit to which the qualified claimant is
92entitled;
93 (ii) the amount of the historic preservation credit that the qualified claimant is
94assigning; and
95 (iii) contact information for the person to whom the qualified claimant is assigning all
96or a portion of the historic preservation tax credit.
97 (b) If the qualified claimant meets the requirements of Subsection (4)(a), the State
98Historic Preservation Office shall issue an assigned historic preservation credit certificate to the
99person identified by the qualified claimant for the amount specified in the qualified claimant's
100written notice described in Subsection (4)(a).
101 (5) A person who is issued a historic preservation credit certificate in accordance with
102Subsection (4) may claim the historic preservation credit as if:
103 (a) the person had met the requirements of this section to claim the historic
104preservation credit, if the person files a return under this chapter; or
105 (b) the person had met the requirements of Section 59-10-1006 to claim the historic
106preservation credit under Section 59-10-1006, if the person files a return under Chapter 10,
107Individual Income Tax Act.
108 (6) (a) The office shall issue a historic preservation credit certificate to a qualified
109claimant that assigns a historic preservation credit for any remaining amount of the historic
110preservation credit that was not assigned; or
111 (b) if there is no credit remaining, the office shall remove the qualified claimant from
112the list of qualified claimants sent to the commission according to Subsection (8).
113 [(c)] (7) [Any amount of credit remaining may be carried forward to each of the five
114taxable years following the qualified expenditures.] A qualified claimant may carry forward the
115amount of the historic preservation credit that exceeds the qualified claimant's liability for five
116taxable years after the year in which the qualified claimant claims a tax credit under this
117section.
118 (8) The office shall provide the with commission an electronic report that includes for
119each qualified claimant to which the office issued a historic preservation credit certificate under
120this section for a taxable year: 02-08-23 3:52 PM H.B. 424
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121 (a) the name of the qualified claimant;
122 (b) the identifying information of the qualified claimant; and
123 (c) the amount of the historic preservation credit that the qualified claimant is eligible
124to claim.
125 (9) A qualified claimant shall retain a certificate issued under this section as described
126in Section 59-1-1406.
127 [(d)] (10) The commission, in consultation with the [Division of State History] State
128Historic Preservation Office, shall [promulgate rules] make rules to implement this section.
129 [(2) As used in this section:]
130 [(a) "Certified historic building" means a building that is listed on the National
131Register of Historic Places within three years of taking the credit under this section or that is
132located in a National Register Historic District and the building has been designated by the
133Division of State History as being of significance to the district.]
134 [(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
135to the rehabilitation and restoration of the physical elements of the building, including the
136historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
137plumbing systems to applicable codes.]
138 [(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
139 [(A) the taxpayer's personal labor;]
140 [(B) cost of acquisition of the property;]
141 [(C) any expenditure attributable to the enlargement of an existing building;]
142 [(D) rehabilitation of a certified historic building without the approval required in
143Subsection (1)(b); or]
144 [(E) any expenditure attributable to landscaping and other site features, outbuildings,
145garages, and related features.]
146 [(c) "Residential" means a building used for residential use, either owner occupied or
147income producing.]
148 Section 2. Section 59-10-1006 is amended to read:
149 59-10-1006. Historic preservation tax credit.
150 (1) As used in this section:
151 (a) "Certified historic building" means a building that: H.B. 424 02-08-23 3:52 PM
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152 (i) is listed on the National Register of Historic Places within three years of taking the
153credit under this section; or
154 (ii) (A) is located in a National Register Historic District; and
155 (B) has been designated by the State Historic Preservation Office as being of
156significance to the district.
157 (b) "Commercial" means a building used to conduct business.
158 (c) "Historic preservation credit" means the tax credit described in Subsection (2).
159 (d) "Qualified claimant" means:
160 (i) (A) a claimant, estate, or trust that qualifies for a historic preservation credit; or
161 (B) a person that is assigned a historic preservation credit; and
162 (ii) has a written certification as provided in Subsection (3) or (4).
163 (e) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
164the rehabilitation and restoration of the physical elements of the building, including the historic
165decorative elements, and the upgrading of the structural, mechanical, electrical, and plumbing
166systems to applicable codes.
167 (ii) "Qualified rehabilitation expenditures" does not include expenditures related to:
168 (A) the taxpayer's personal labor;
169 (B) cost of acquisition of the property;
170 (C) any expenditure attributable to the enlargement of an existing building;
171 (D) rehabilitation of a certified historic building without the approval required in
172Subsection (3); or
173 (E) any expenditure attributable to landscaping and other site features, outbuildings,
174garages, and related features.
175 (f) "Residential" means a building used for residential use, either owner occupied or
176income producing.
177 [(1)] (2) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed
178to a claimant, estate, or trust,] A claimant, estate, or trust may claim as a nonrefundable tax
179credit [against the income tax due,] in an amount equal to 20% of qualified rehabilitation
180expenditures, [costing] if the qualified rehabilitation expenditures:
181 (i) cost more than $10,000[,]; and
182 (ii) are incurred in connection with any residential or commercial certified historic 02-08-23 3:52 PM H.B. 424
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183building. [When qualifying expenditures of more than $10,000 are incurred, the tax credit
184allowed by this section shall apply to the full amount of expenditures.]
185 [(b) All rehabilitation work to which the tax credit may be applied shall be approved
186by the State Historic Preservation Office prior to completion of the rehabilitation project as
187meeting the Secretary of the Interior's Standards for Rehabilitation so that the office can
188provide corrective comments to the claimant, estate, or trust in order to preserve the historical
189qualities of the building.]
190 (b) (i) A qualified claimant may assign all or a portion of a historic preservation credit
191to which the qualified claimant is entitled.
192 (ii) There is no limit on the number of transactions for the sale or assignment of all or a
193portion of a historic preservation credit under this section.
194 (3) (a) The office shall issue a historic preservation credit certificate to a claimant,
195estate, or trust if the office:
196 (i) approves all rehabilitation work for which a claimant, estate, or trust may claim a
197tax credit as meeting the Secretary of the Interior's Standards for Rehabilitation before
198completion of the rehabilitation project so that the office can provide corrective comments to
199the taxpayer to preserve the historic qualities of the building;
200 (ii) determines that the rehabilitation project conforms with the approved rehabilitation
201work; and
202 (iii) verifies the property is a residential or commercial certified historic building and
203the amount of the taxpayer's qualified rehabilitation expenditures.
204 (4) (a) To assign a historic preservation credit to another person, a qualified claimant
205shall provide written notice to the State Historic Preservation Office, in a form established by
206the State Historic Preservation Office, that includes:
207 (i) the qualified claimant's written certificate and other proof that the qualified claimant
208is assigning all or a portion of the historic preservation credit to which the qualified claimant is
209entitled;
210 (ii) the amount of the historic preservation credit that the qualified claimant is
211assigning; and
212 (iii) contact information for the person to whom the qualified claimant is assigning all
213or a portion of the historic preservation credit. H.B. 424 02-08-23 3:52 PM
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214 (b) If the qualified claimant meets the requirements of Subsection (4)(a), the State
215Historic Preservation Office shall issue an assigned historic preservation credit certificate to the
216person identified by the qualified claimant for the amount specified in the written notice
217described in Subsection (4)(a).
218 (5) A person who is issued a historic preservation credit certificate in accordance with
219Subsection (4)(b) may claim the historic preservation credit as if:
220 (a) the person had met the requirements of this section to claim the historic
221preservation credit, if the person files a return under this chapter; or
222 (b) the person had met the requirements of Section 59-7-609 to claim the historic
223preservation credit under Section 59-7-609, if the person files a return under Chapter 7,
224Corporate Franchise and Income Taxes, Chapter 8, Gross Receipts Tax on Certain
225Corporations Not Required to Pay Corporate Franchise or Income Tax Act, or Chapter 9,
226Taxation of Admitted Insurers.
227 [(c) Any amount of tax credit remaining may be carried forward to each of the five
228taxable years following the qualified expenditures.]
229 (6) (a) The office shall issue a historic preservation credit certificate to a qualified
230claimant that assigns a historic preservation credit for any remaining amount of the historic
231preservation credit that was not assigned; or
232 (b) if there is no credit remaining, the office shall remove the qualified claimant from
233the list of qualified claimants sent to the commission according to Subsection (8).
234 (7) A qualified claimant may carry forward the amount of the historic preservation
235credit that exceeds the qualified claimant's liability for five taxable years after the year in which
236the qualified claimant claims a tax credit under this section.
237 (8) The office shall provide the commission with an electronic report that includes for
238each qualified claimant to which the office issued a historic preservation credit certificate under
239this section for a taxable year:
240 (a) the name of the qualified claimant;
241 (b) the identifying information of the qualified claimant; and
242 (c) the amount of the historic preservation credit that the qualified claimant is eligible
243to claim.
244 [(d)] (9) The commission, in consultation with the Division of State History, shall 02-08-23 3:52 PM H.B. 424
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245promulgate rules to implement this section.
246 [(2) As used in this section:]
247 [(a) "Certified historic building" means a building that is listed on the National
248Register of Historic Places within three years of taking the credit under this section or that is
249located in a National Register Historic District and the building has been designated by the
250Division of State History as being of significance to the district.]
251 [(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
252to the rehabilitation and restoration of the physical elements of the building, including the
253historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
254plumbing systems to applicable codes.]
255 [(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
256 [(A) a claimant's, estate's, or trust's personal labor;]
257 [(B) cost of acquisition of the property;]
258 [(C) any expenditure attributable to the enlargement of an existing building;]
259 [(D) rehabilitation of a certified historic building without the approval required in
260Subsection (1)(b); or]
261 [(E) any expenditure attributable to landscaping and other site features, outbuildings,
262garages, and related features.]
263 [(c) "Residential" means a building used for residential use, either owner occupied or
264income producing.]
265 Section 3. Effective date.
266 This bill takes effect for a taxable year beginning on or after January 1, 2024.