Introduced Version
HOUSE BILL No. 1318
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 4-4-9.7-6; IC 6-3.1-16.
Synopsis: Tax credits. Transfers administration of the historic
rehabilitation tax credit from the division of historic preservation and
archeology of the department of natural resources to the office of
community and rural affairs (office). Provides that the credit applies to
the preservation or rehabilitation of historic properties that have been
vacant for at least one year. Establishes four new methodologies for
determining the amount of the tax credit. Provides that a property's
adjusted basis is not reduced by the amount of the credit if a person is
entitled to a federal low income housing tax credit. Changes numerous
spending floors and caps relating to the tax credit. Phases in increases
to the annual statewide cap on the tax credit until the cap is
$10,000,000. Specifies that the office may adopt emergency rules.
Voids a rule providing that the maximum amount of tax credits for a
particular project is $100,000. Prohibits the office from reallocating
available tax credits from year to year.
Effective: July 1, 2013.
Clere
January 15, 2013, read first time and referred to Committee on Ways and Means.
Introduced
First Regular Session 118th General Assembly (2013)
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HOUSE BILL No. 1318
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 4-4-9.7-6; (13)IN1318.1.1. -->
SECTION 1. IC 4-4-9.7-6, AS AMENDED BY P.L.144-2006,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 6. The office shall do the following:
(1) Administer the rural economic development fund under
section 9 of this chapter.
(2) Administer the Indiana main street program under IC 4-4-16.
(3) Administer the community development block grant program.
(4) Make certifications required under IC 6-3.1-16 with
respect to the historic rehabilitation tax credit.
SOURCE: IC 6-3.1-16-0.1; (13)IN1318.1.2. -->
SECTION 2. IC 6-3.1-16-0.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 0.1. (a) An amendment to this
chapter enacted in 2013 applies to tax credits awarded after June
30, 2013.
(b) A tax credit awarded under this chapter for a taxable year
ending before January 1, 2013, is subject to:
(1) this chapter (as in effect on January 1, 2013);
(2) the rules of the natural resources commission (as in effect
on January 1, 2013); and
(3) any terms and conditions imposed upon the tax credit by
the department of state revenue or the department of natural
resources, including a requirement that the tax credit must be
claimed in a taxable year beginning after December 31, 2013.
SOURCE: IC 6-3.1-16-1.5; (13)IN1318.1.3. -->
SECTION 3. IC 6-3.1-16-1.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 1.5. As used in this chapter,
"difficult development area" has the meaning set forth in Section
42(d)(5)(B)(iii) of the Internal Revenue Code.
SOURCE: IC 6-3.1-16-2.5; (13)IN1318.1.4. -->
SECTION 4. IC 6-3.1-16-2.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 2.5. As used in this chapter,
"office" refers to the office of community and rural affairs
established by IC 4-4-9.7-4.
SOURCE: IC 6-3.1-16-2.8; (13)IN1318.1.5. -->
SECTION 5. IC 6-3.1-16-2.8 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 2.8. As used in this chapter,
"person" means:
(1) an individual;
(2) a corporation;
(3) an S corporation;
(4) a partnership;
(5) a limited liability company;
(6) a limited liability partnership;
(7) a nonprofit organization; or
(8) a joint venture.
SOURCE: IC 6-3.1-16-3.5; (13)IN1318.1.6. -->
SECTION 6. IC 6-3.1-16-3.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 3.5. As used in this chapter,
"qualified census tract" has the meaning set forth in Section
42(d)(5)(B)(ii) of the Internal Revenue Code.
SOURCE: IC 6-3.1-16-5.5; (13)IN1318.1.7. -->
SECTION 7. IC 6-3.1-16-5.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 5.5. As used in this chapter,
"rurality index" refers to a ranking of Indiana counties from the
least to most rural as determined and updated from time to time by
the office.
SOURCE: IC 6-3.1-16-6.1; (13)IN1318.1.8. -->
SECTION 8. IC 6-3.1-16-6.1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 6.1. As used in this
chapter, "taxpayer" means:
an individual, a corporation, an S
corporation, a partnership, a limited liability company, a limited
liability partnership, a nonprofit organization, or a joint venture.
(1) a person that:
(A) is the holder of a credit that is awarded under this
chapter; and
(B) has a state tax liability against which any part of the
credit may be applied; or
(2) a shareholder, partner, or member of a pass through
entity that:
(A) is the holder of a credit that is awarded under this
chapter; and
(B) does not have any state tax liability against which any
part of the credit may be applied.
SOURCE: IC 6-3.1-16-6.5; (13)IN1318.1.9. -->
SECTION 9. IC 6-3.1-16-6.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 6.5. As used in this chapter,
"significant use" refers to the use of an historic property:
(1) as a residence; or
(2) in a trade or business for a purpose other than storage or
warehousing.
SOURCE: IC 6-3.1-16-6.6; (13)IN1318.1.10. -->
SECTION 10. IC 6-3.1-16-6.6 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 6.6. As used in this chapter,
"vacant" means, with respect to a historic property, that at least
fifty percent (50%) of the useable interior floor space of the
historic property is not occupied and used for a significant use.
SOURCE: IC 6-3.1-16-7; (13)IN1318.1.11. -->
SECTION 11. IC 6-3.1-16-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 7. (a) Subject to section
14 of this chapter, a taxpayer is entitled to a credit against the
taxpayer's state tax liability in the taxable year in which the taxpayer
completes the preservation or rehabilitation of historic property and
obtains the certifications required under section 8 of this chapter.
(b) The amount of the credit is equal to twenty percent (20%) of the
qualified expenditures that:
(1) the taxpayer makes for the preservation or rehabilitation of
historic property; and
(2) are approved by the division.
(b) The credit applies to qualified expenditures that:
(1) the taxpayer makes for the preservation or rehabilitation
of historic property; and
(2) are approved by the office.
(c) The amount of the credit must be determined under one (1)
of the following methods:
(1) If the total amount of the taxpayer's qualified expenditures
is less than two million dollars ($2,000,000), the amount of the
credit is equal to forty percent (40%) of either of the following
amounts:
(A) The total amount of the qualified expenditures made
by the taxpayer.
(B) The product of:
(i) the total amount of the qualified expenditures made
by the taxpayer; multiplied by
(ii) one and three-tenths (1.3);
in the case of a person that applies for a credit for the
preservation or rehabilitation of historic property located
in a difficult development area or a qualified census tract.
(2) If the property preserved or rehabilitated is a school, is a
hospital, or is subject to a grant received under the Indiana
main street program established under IC 4-4-16-1, the
amount of the credit is equal to forty percent (40%) of either
of the following amounts:
(A) The total amount of the qualified expenditures made
by the taxpayer.
(B) The product of:
(i) the total amount of the qualified expenditures made
by the taxpayer; multiplied by
(ii) one and three-tenths (1.3);
in the case of a person that applies for a credit for the
preservation or rehabilitation of historic property located
in a difficult development area or a qualified census tract.
(3) If the property preserved or rehabilitated obtains a
qualifying score under section 7.7 of this chapter, the amount
of the credit is equal to forty percent (40%) of either of the
following amounts:
(A) The total amount of the qualified expenditures made
by the taxpayer.
(B) The product of:
(i) the total amount of the qualified expenditures made
by the taxpayer; multiplied by
(ii) one and three-tenths (1.3);
in the case of a person that applies for a credit for the
preservation or rehabilitation of historic property located
in a difficult development area or a qualified census tract.
(4) If the property preserved or rehabilitated is not described
by subdivisions (1) through (3), the amount of the credit is
equal to twenty percent (20%) of the appropriate amount as
follows:
(A) The total amount of the qualified expenditures made
by the taxpayer.
(B) The product of:
(i) the total amount of the qualified expenditures made
by the taxpayer; multiplied by
(ii) one and three-tenths (1.3);
in the case of a person that applies for a credit for the
preservation or rehabilitation of historic property located
in a difficult development area or a qualified census tract.
(c) (d) In the case of a husband and wife who:
(1) own and rehabilitate a historic property jointly; and
(2) file separate tax returns;
the husband and wife may take the credit in equal shares or one (1)
spouse may take the whole credit.
SOURCE: IC 6-3.1-16-7.7; (13)IN1318.1.12. -->
SECTION 12. IC 6-3.1-16-7.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 7.7. (a) The office shall develop
a scoring system to evaluate preservation or rehabilitation projects
for purposes of qualifying for an enhanced credit under section
7(c)(3) of this chapter.
(b) A project scoring at least fifty (50) points in a system
developed under this section is entitled to receive the enhanced
credit under section 7(c)(3) of this chapter.
(c) The system must contain the following components:
(1) A score that is equal to the quotient of:
(A) the rurality index rank of the county in which the
preservation or rehabilitation project is located; divided by
(B) two (2).
(2) A score that is equal to the quotient of:
(A) the median household income rank of the county in
which the preservation or rehabilitation project is located
as determined by the United States Census Bureau; divided
by
(B) four (4).
However, the score determined under this subdivision is zero
(0) if the county's median household income is equal to or
greater than the Indiana median household income.
(3) A score for the quality of the building being preserved or
rehabilitated by the taxpayer as follows:
(A) Fifteen (15) points for a building rated outstanding in
the most recent interim report published by the division
for the county in which the property is located.
(B) Ten (10) points for a building rated notable in the most
recent interim report published by the division for the
county in which the property is located.
(C) Zero (0) points for a building that is neither
outstanding nor notable.
SOURCE: IC 6-3.1-16-8; (13)IN1318.1.13. -->
SECTION 13. IC 6-3.1-16-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 8. A taxpayer qualifies
for a credit under section 7 of this chapter if all of the following
conditions are met:
(1) The historic property: is:
(A) is located in Indiana;
(B) is at least fifty (50) years old; and
(C) has been vacant for at least one (1) year as of the date
the taxpayer submitted a proposed preservation or
rehabilitation plan to the division; and
(C) (D) except as provided in section 7(c) 7(d) of this chapter,
is owned by the taxpayer.
(2) The division office certifies that the historic property is listed
in the register of Indiana historic sites and historic structures.
(3) The division office certifies that the taxpayer submitted a
proposed preservation or rehabilitation plan to the division office
that complies with the standards of the division.
(4) The division office certifies that the preservation or
rehabilitation work that is the subject of the credit substantially
complies with the proposed plan referred to in subdivision (3).
(5) The preservation or rehabilitation work is completed in not
more than:
(A) two (2) years; or
(B) five (5) years if the preservation or rehabilitation plan
indicates that the preservation or rehabilitation is initially
planned for completion in phases.
The time in which work must be completed begins when the
physical work of construction or destruction in preparation for
construction begins.
(6) The historic property is:
(A) actively used in a trade or business;
(B) held for the production of income; or
(C) held for the rental or other use in the ordinary course of the
taxpayer's trade or business.
(7) The qualified expenditures for preservation or rehabilitation
of the historic property exceed ten twenty-five thousand dollars
($10,000). ($25,000).
SOURCE: IC 6-3.1-16-9; (13)IN1318.1.14. -->
SECTION 14. IC 6-3.1-16-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 9. (a) The division
office shall provide the certifications referred to in section 8(3) and
8(4) of this chapter if a taxpayer's proposed preservation or
rehabilitation plan complies with the standards of the division office
and the taxpayer's preservation or rehabilitation work complies with the
plan.
(b) The taxpayer may appeal a decision by the division office under
this chapter to the review board.
SOURCE: IC 6-3.1-16-10; (13)IN1318.1.15. -->
SECTION 15. IC 6-3.1-16-10 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 10. To obtain a credit
under this chapter, a taxpayer must claim the credit on the taxpayer's
annual state tax return or returns in the manner prescribed by the
department of state revenue. The taxpayer shall submit to the
department of state revenue the certifications by the division office
required under section 8 of this chapter and all information that the
department of state revenue determines is necessary for the calculation
of the credit provided by this chapter.
SOURCE: IC 6-3.1-16-10.5; (13)IN1318.1.16. -->
SECTION 16. IC 6-3.1-16-10.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 10.5. The division shall provide
the office with technical guidance and any assistance necessary to
implement this chapter.
SOURCE: IC 6-3.1-16-11; (13)IN1318.1.17. -->
SECTION 17. IC 6-3.1-16-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 11. (a) This section
does not apply to a person if the person is entitled to a credit under
Section 42 of the Internal Revenue Code for the historic property.
(b) For purposes of IC 6-3, the adjusted basis of:
(1) the structure, if the historic property is a structure; or
(2) the entire property, if the historic property is not a structure;
shall be reduced by the amount of a credit granted under this chapter.
SOURCE: IC 6-3.1-16-12; (13)IN1318.1.18. -->
SECTION 18. IC 6-3.1-16-12 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 12. (a)
Except as
provided in subsection (b), a credit claimed under this chapter shall
be recaptured from the taxpayer
who obtained the certifications
required under section 8 of this chapter if:
(1) the property is transferred less than five (5) years after
completion of the certified preservation or rehabilitation work; or
(2) less than five (5) years after completion of the certified
preservation or rehabilitation, additional modifications to the
property are undertaken that do not meet the standards of the
division.
(b) A historic property subject to a tax credit awarded under
this chapter may be transferred without subjecting the tax credit
to recapture under subsection (a) if the historic property is
transferred as a condominium (as defined by IC 32-25-2-7).
(b) (c) If the recapture of a credit is required under this section, an
amount equal to the credit recaptured shall be added to the tax liability
of the taxpayer for the taxable year during which the credit is
recaptured.
SOURCE: IC 6-3.1-16-14; (13)IN1318.1.19. -->
SECTION 19. IC 6-3.1-16-14 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 14.
(a) The amount of
tax credits allowed under this chapter may not exceed
the following
amounts:
(1) seven hundred fifty thousand dollars ($750,000) in the state
fiscal year beginning July 1, 1997, and the state fiscal year
beginning July 1, 1998; and
(2) (1) Four hundred fifty thousand dollars ($450,000) in a state
fiscal year that begins
July 1, after June 30, 1999,
or thereafter.
and ends before July 1, 2013.
(2) Two million five hundred thousand dollars ($2,500,000) in
the state fiscal year beginning July 1, 2013.
(3) Five million dollars ($5,000,000) in the state fiscal year
beginning July 1, 2014.
(4) Seven million five hundred thousand dollars ($7,500,000)
in the state fiscal year beginning July 1, 2015.
(5) Ten million dollars ($10,000,000) in a state fiscal year
beginning after June 30, 2016.
(b) The amount of the tax credit allowed under this chapter for
the preservation or rehabilitation of a particular property in a
particular state fiscal year may not exceed the product of:
(1) the total amount of credits that may be allowed to all
taxpayers in that state fiscal year; multiplied by
(2) twenty percent (20%).
(c) The office shall reserve twenty-five percent (25%) of the
total amount of available tax credits in each state fiscal year for
projects for which the qualified expenditures approved by the
office do not exceed five hundred thousand dollars ($500,000). If
the amount reserved under this subsection exceeds the amount of
tax credits actually allowed to taxpayers that are eligible to receive
tax credits from the reserved amount, the office may allow the
excess amount to be claimed by any taxpayer otherwise entitled to
a tax credit under this chapter.
(d) The office may not increase the amount of tax credits
allowed under subsection (a) in a particular state fiscal year by
reducing the amount specified by subsection (a) for any other state
fiscal year.
SOURCE: IC 6-3.1-16-15; (13)IN1318.1.20. -->
SECTION 20. IC 6-3.1-16-15 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 15. The following may
adopt rules under IC 4-22-2, including emergency rules in the
manner provided under IC 4-22-2-37.1, to carry out this chapter:
(1) The department of state revenue.
(2) The division. office.
SOURCE: IC 6-3.1-16-16; (13)IN1318.1.21. -->
SECTION 21. IC 6-3.1-16-16 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 16. (a) 312 IAC 23-3-4(b) is void.
(b) The publisher of the Indiana Administrative Code and
Indiana Register shall remove 312 IAC 23-3-4(b) from the Indiana
Administrative Code.
SOURCE: IC 6-3.1-16-17; (13)IN1318.1.22. -->
SECTION 22. IC 6-3.1-16-17 IS ADDED TO THE INDIANA
CODE AS A
NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]:
Sec. 17. The property, records, and
administrative rules maintained by the division to implement this
chapter are transferred to the office on July 1, 2013.