UT
Utah House Bill HB0424

Utah 2023 Regular Session

Utah House Bill HB0424 Compare Versions

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11 H.B. 424
22 LEGISLATIVE GENERAL COUNSEL
33 6 Approved for Filing: S. Elder 6
44 6 02-08-23 3:52 PM 6
55 H.B. 424
66 1 HISTORIC REHABILITATION TAX CREDIT AMENDMENTS
77 2 2023 GENERAL SESSION
88 3 STATE OF UTAH
99 4 Chief Sponsor: Carl R. Albrecht
1010 5 Senate Sponsor: ____________
1111 6
1212 7LONG TITLE
1313 8General Description:
1414 9 This bill modifies the tax credit related to expenditures for rehabilitating a historic
1515 10building.
1616 11Highlighted Provisions:
1717 12 This bill:
1818 13 <defines terms;
1919 14 <expands eligibility for the tax credit to include rehabilitation expenditures made for
2020 15certain historic commercial buildings;
2121 16 <provides that a person may assign all or a portion of a historic rehabilitation tax
2222 17credit; and
2323 18 <makes technical and conforming changes.
2424 19Money Appropriated in this Bill:
2525 20 None
2626 21Other Special Clauses:
2727 22 This bill provides a special effective date.
2828 23Utah Code Sections Affected:
2929 24AMENDS:
3030 25 59-7-609, as enacted by Laws of Utah 1995, Chapter 42
3131 26 59-10-1006, as renumbered and amended by Laws of Utah 2006, Chapter 223
3232 27
3333 *HB0424* H.B. 424 02-08-23 3:52 PM
3434 - 2 -
3535 28Be it enacted by the Legislature of the state of Utah:
3636 29 Section 1. Section 59-7-609 is amended to read:
3737 30 59-7-609. Historic preservation credit.
3838 31 (1) As used in this section:
3939 32 (a) "Certified historic building" means a building that:
4040 33 (i) is listed on the National Register of Historic Places within three years of taking the
4141 34credit under this section; or
4242 35 (ii) (A) is located in a National Register Historic District; and
4343 36 (B) has been designated by the State Historic Preservation Office as being of
4444 37significance to the district.
4545 38 (b) "Commercial" means a building used to conduct business.
4646 39 (c) "Historic preservation credit" means the tax credit described in Subsection (2).
4747 40 (d) "Qualified claimant" means:
4848 41 (i) (A) a taxpayer that qualifies for a historic preservation credit; or
4949 42 (B) a person that is assigned a historic preservation credit; and
5050 43 (ii) has a written certification as provided in Subsection (3) or (4).
5151 44 (e) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
5252 45the rehabilitation and restoration of the physical elements of the building.
5353 46 (ii) "Qualified rehabilitation expenditures" includes the historic decorative elements,
5454 47and the upgrading of the structural, mechanical, electrical, and plumbing systems.
5555 48 (iii) "Qualified rehabilitation expenditures" does not include expenditures related to:
5656 49 (A) the taxpayer's personal labor;
5757 50 (B) cost of acquisition of the property;
5858 51 (C) any expenditure attributable to the enlargement of an existing building;
5959 52 (D) rehabilitation of a certified historic building without the approval required in
6060 53Subsection (3); or
6161 54 (E) any expenditure attributable to landscaping and other site features, outbuildings,
6262 55garages, and related features.
6363 56 (f) "Residential" means a building used for residential use, either owner occupied or
6464 57income producing.
6565 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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6767 59to a taxpayer subject to Section 59-7-104, as a credit against the tax due,] A taxpayer may
6868 60claim a nonrefundable tax credit in an amount equal to 20% of qualified rehabilitation
6969 61expenditures, [costing] if the qualified rehabilitation expenditures:
7070 62 (i) cost more than $10,000[,]; and
7171 63 (ii) are incurred in connection with any residential or commercial certified historic
7272 64building. [When qualifying expenditures of more than $10,000 are incurred, the credit allowed
7373 65by this section shall apply to the full amount of expenditures.]
7474 66 [(b) All rehabilitation work to which the credit may be applied shall be approved by the
7575 67State Historic Preservation Office prior to completion of the rehabilitation project as meeting
7676 68the Secretary of the Interior's Standards for Rehabilitation so that the office can provide
7777 69corrective comments to the taxpayer in order to preserve the historical qualities of the
7878 70building.]
7979 71 (b) (i) A qualified claimant may assign all or a portion of a historic preservation credit
8080 72to which the qualified claimant is entitled.
8181 73 (ii) There is no limit on the number of transactions for the assignment of all or a
8282 74portion of a historic preservation credit.
8383 75 (3) (a) The office shall issue a historic preservation credit certificate to a taxpayer if the
8484 76office:
8585 77 (i) approves all rehabilitation work for which a taxpayer may claim a tax credit as
8686 78meeting the Secretary of the Interior's Standards for Rehabilitation before completion of the
8787 79rehabilitation project so that the office can provide corrective comments to the taxpayer to
8888 80preserve the historic qualities of the building;
8989 81 (ii) determines that the rehabilitation project conforms with the approved rehabilitation
9090 82work; and
9191 83 (iii) verifies the property is a residential or commercial certified historic building and
9292 84the amount of the taxpayer's qualified rehabilitation expenditures.
9393 85 (b) The tax credit certificate shall list the amount of the historic preservation credit that
9494 86the taxpayer is eligible to claim.
9595 87 (4) (a) To assign a historic preservation credit to another person, a qualified claimant
9696 88shall provide a written notice to the State Historic Preservation Office, in a form established by
9797 89the State Historic Preservation Office, that includes: H.B. 424 02-08-23 3:52 PM
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9999 90 (i) the qualified claimant's written certificate and other proof that the qualified claimant
100100 91is assigning all or a portion of the historic preservation credit to which the qualified claimant is
101101 92entitled;
102102 93 (ii) the amount of the historic preservation credit that the qualified claimant is
103103 94assigning; and
104104 95 (iii) contact information for the person to whom the qualified claimant is assigning all
105105 96or a portion of the historic preservation tax credit.
106106 97 (b) If the qualified claimant meets the requirements of Subsection (4)(a), the State
107107 98Historic Preservation Office shall issue an assigned historic preservation credit certificate to the
108108 99person identified by the qualified claimant for the amount specified in the qualified claimant's
109109 100written notice described in Subsection (4)(a).
110110 101 (5) A person who is issued a historic preservation credit certificate in accordance with
111111 102Subsection (4) may claim the historic preservation credit as if:
112112 103 (a) the person had met the requirements of this section to claim the historic
113113 104preservation credit, if the person files a return under this chapter; or
114114 105 (b) the person had met the requirements of Section 59-10-1006 to claim the historic
115115 106preservation credit under Section 59-10-1006, if the person files a return under Chapter 10,
116116 107Individual Income Tax Act.
117117 108 (6) (a) The office shall issue a historic preservation credit certificate to a qualified
118118 109claimant that assigns a historic preservation credit for any remaining amount of the historic
119119 110preservation credit that was not assigned; or
120120 111 (b) if there is no credit remaining, the office shall remove the qualified claimant from
121121 112the list of qualified claimants sent to the commission according to Subsection (8).
122122 113 [(c)] (7) [Any amount of credit remaining may be carried forward to each of the five
123123 114taxable years following the qualified expenditures.] A qualified claimant may carry forward the
124124 115amount of the historic preservation credit that exceeds the qualified claimant's liability for five
125125 116taxable years after the year in which the qualified claimant claims a tax credit under this
126126 117section.
127127 118 (8) The office shall provide the with commission an electronic report that includes for
128128 119each qualified claimant to which the office issued a historic preservation credit certificate under
129129 120this section for a taxable year: 02-08-23 3:52 PM H.B. 424
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131131 121 (a) the name of the qualified claimant;
132132 122 (b) the identifying information of the qualified claimant; and
133133 123 (c) the amount of the historic preservation credit that the qualified claimant is eligible
134134 124to claim.
135135 125 (9) A qualified claimant shall retain a certificate issued under this section as described
136136 126in Section 59-1-1406.
137137 127 [(d)] (10) The commission, in consultation with the [Division of State History] State
138138 128Historic Preservation Office, shall [promulgate rules] make rules to implement this section.
139139 129 [(2) As used in this section:]
140140 130 [(a) "Certified historic building" means a building that is listed on the National
141141 131Register of Historic Places within three years of taking the credit under this section or that is
142142 132located in a National Register Historic District and the building has been designated by the
143143 133Division of State History as being of significance to the district.]
144144 134 [(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
145145 135to the rehabilitation and restoration of the physical elements of the building, including the
146146 136historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
147147 137plumbing systems to applicable codes.]
148148 138 [(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
149149 139 [(A) the taxpayer's personal labor;]
150150 140 [(B) cost of acquisition of the property;]
151151 141 [(C) any expenditure attributable to the enlargement of an existing building;]
152152 142 [(D) rehabilitation of a certified historic building without the approval required in
153153 143Subsection (1)(b); or]
154154 144 [(E) any expenditure attributable to landscaping and other site features, outbuildings,
155155 145garages, and related features.]
156156 146 [(c) "Residential" means a building used for residential use, either owner occupied or
157157 147income producing.]
158158 148 Section 2. Section 59-10-1006 is amended to read:
159159 149 59-10-1006. Historic preservation tax credit.
160160 150 (1) As used in this section:
161161 151 (a) "Certified historic building" means a building that: H.B. 424 02-08-23 3:52 PM
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163163 152 (i) is listed on the National Register of Historic Places within three years of taking the
164164 153credit under this section; or
165165 154 (ii) (A) is located in a National Register Historic District; and
166166 155 (B) has been designated by the State Historic Preservation Office as being of
167167 156significance to the district.
168168 157 (b) "Commercial" means a building used to conduct business.
169169 158 (c) "Historic preservation credit" means the tax credit described in Subsection (2).
170170 159 (d) "Qualified claimant" means:
171171 160 (i) (A) a claimant, estate, or trust that qualifies for a historic preservation credit; or
172172 161 (B) a person that is assigned a historic preservation credit; and
173173 162 (ii) has a written certification as provided in Subsection (3) or (4).
174174 163 (e) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
175175 164the rehabilitation and restoration of the physical elements of the building, including the historic
176176 165decorative elements, and the upgrading of the structural, mechanical, electrical, and plumbing
177177 166systems to applicable codes.
178178 167 (ii) "Qualified rehabilitation expenditures" does not include expenditures related to:
179179 168 (A) the taxpayer's personal labor;
180180 169 (B) cost of acquisition of the property;
181181 170 (C) any expenditure attributable to the enlargement of an existing building;
182182 171 (D) rehabilitation of a certified historic building without the approval required in
183183 172Subsection (3); or
184184 173 (E) any expenditure attributable to landscaping and other site features, outbuildings,
185185 174garages, and related features.
186186 175 (f) "Residential" means a building used for residential use, either owner occupied or
187187 176income producing.
188188 177 [(1)] (2) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed
189189 178to a claimant, estate, or trust,] A claimant, estate, or trust may claim as a nonrefundable tax
190190 179credit [against the income tax due,] in an amount equal to 20% of qualified rehabilitation
191191 180expenditures, [costing] if the qualified rehabilitation expenditures:
192192 181 (i) cost more than $10,000[,]; and
193193 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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195195 183building. [When qualifying expenditures of more than $10,000 are incurred, the tax credit
196196 184allowed by this section shall apply to the full amount of expenditures.]
197197 185 [(b) All rehabilitation work to which the tax credit may be applied shall be approved
198198 186by the State Historic Preservation Office prior to completion of the rehabilitation project as
199199 187meeting the Secretary of the Interior's Standards for Rehabilitation so that the office can
200200 188provide corrective comments to the claimant, estate, or trust in order to preserve the historical
201201 189qualities of the building.]
202202 190 (b) (i) A qualified claimant may assign all or a portion of a historic preservation credit
203203 191to which the qualified claimant is entitled.
204204 192 (ii) There is no limit on the number of transactions for the sale or assignment of all or a
205205 193portion of a historic preservation credit under this section.
206206 194 (3) (a) The office shall issue a historic preservation credit certificate to a claimant,
207207 195estate, or trust if the office:
208208 196 (i) approves all rehabilitation work for which a claimant, estate, or trust may claim a
209209 197tax credit as meeting the Secretary of the Interior's Standards for Rehabilitation before
210210 198completion of the rehabilitation project so that the office can provide corrective comments to
211211 199the taxpayer to preserve the historic qualities of the building;
212212 200 (ii) determines that the rehabilitation project conforms with the approved rehabilitation
213213 201work; and
214214 202 (iii) verifies the property is a residential or commercial certified historic building and
215215 203the amount of the taxpayer's qualified rehabilitation expenditures.
216216 204 (4) (a) To assign a historic preservation credit to another person, a qualified claimant
217217 205shall provide written notice to the State Historic Preservation Office, in a form established by
218218 206the State Historic Preservation Office, that includes:
219219 207 (i) the qualified claimant's written certificate and other proof that the qualified claimant
220220 208is assigning all or a portion of the historic preservation credit to which the qualified claimant is
221221 209entitled;
222222 210 (ii) the amount of the historic preservation credit that the qualified claimant is
223223 211assigning; and
224224 212 (iii) contact information for the person to whom the qualified claimant is assigning all
225225 213or a portion of the historic preservation credit. H.B. 424 02-08-23 3:52 PM
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227227 214 (b) If the qualified claimant meets the requirements of Subsection (4)(a), the State
228228 215Historic Preservation Office shall issue an assigned historic preservation credit certificate to the
229229 216person identified by the qualified claimant for the amount specified in the written notice
230230 217described in Subsection (4)(a).
231231 218 (5) A person who is issued a historic preservation credit certificate in accordance with
232232 219Subsection (4)(b) may claim the historic preservation credit as if:
233233 220 (a) the person had met the requirements of this section to claim the historic
234234 221preservation credit, if the person files a return under this chapter; or
235235 222 (b) the person had met the requirements of Section 59-7-609 to claim the historic
236236 223preservation credit under Section 59-7-609, if the person files a return under Chapter 7,
237237 224Corporate Franchise and Income Taxes, Chapter 8, Gross Receipts Tax on Certain
238238 225Corporations Not Required to Pay Corporate Franchise or Income Tax Act, or Chapter 9,
239239 226Taxation of Admitted Insurers.
240240 227 [(c) Any amount of tax credit remaining may be carried forward to each of the five
241241 228taxable years following the qualified expenditures.]
242242 229 (6) (a) The office shall issue a historic preservation credit certificate to a qualified
243243 230claimant that assigns a historic preservation credit for any remaining amount of the historic
244244 231preservation credit that was not assigned; or
245245 232 (b) if there is no credit remaining, the office shall remove the qualified claimant from
246246 233the list of qualified claimants sent to the commission according to Subsection (8).
247247 234 (7) A qualified claimant may carry forward the amount of the historic preservation
248248 235credit that exceeds the qualified claimant's liability for five taxable years after the year in which
249249 236the qualified claimant claims a tax credit under this section.
250250 237 (8) The office shall provide the commission with an electronic report that includes for
251251 238each qualified claimant to which the office issued a historic preservation credit certificate under
252252 239this section for a taxable year:
253253 240 (a) the name of the qualified claimant;
254254 241 (b) the identifying information of the qualified claimant; and
255255 242 (c) the amount of the historic preservation credit that the qualified claimant is eligible
256256 243to claim.
257257 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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259259 245promulgate rules to implement this section.
260260 246 [(2) As used in this section:]
261261 247 [(a) "Certified historic building" means a building that is listed on the National
262262 248Register of Historic Places within three years of taking the credit under this section or that is
263263 249located in a National Register Historic District and the building has been designated by the
264264 250Division of State History as being of significance to the district.]
265265 251 [(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
266266 252to the rehabilitation and restoration of the physical elements of the building, including the
267267 253historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
268268 254plumbing systems to applicable codes.]
269269 255 [(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
270270 256 [(A) a claimant's, estate's, or trust's personal labor;]
271271 257 [(B) cost of acquisition of the property;]
272272 258 [(C) any expenditure attributable to the enlargement of an existing building;]
273273 259 [(D) rehabilitation of a certified historic building without the approval required in
274274 260Subsection (1)(b); or]
275275 261 [(E) any expenditure attributable to landscaping and other site features, outbuildings,
276276 262garages, and related features.]
277277 263 [(c) "Residential" means a building used for residential use, either owner occupied or
278278 264income producing.]
279279 265 Section 3. Effective date.
280280 266 This bill takes effect for a taxable year beginning on or after January 1, 2024.