Bill Text: PA SB1150 | 2011-2012 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Providing tax credits for the rehabilitation of historic structures.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2012-07-02 - Laid on the table [SB1150 Detail]

Download: Pennsylvania-2011-SB1150-Introduced.html

---

PRINTER'S NO. 1432
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1150 Session of2011
INTRODUCED BY SMUCKER, ERICKSON, ARGALL, RAFFERTY, COSTA, ALLOWAY, FONTANA, WASHINGTON, BOSCOLA, YUDICHAK, WAUGH, YAW, SCHWANK AND FERLO, JUNE 26, 2011
REFERRED TO FINANCE, JUNE 26, 2011
AN ACT
Providing tax incentives and credits for rehabilitation of
blighted historic structures.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Historic
Rehabilitation Investment Incentive Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commission." The Pennsylvania Historical and Museum
Commission.
"DCED." The Department of Community and Economic Development
of the Commonwealth.
"Department." The Department of Revenue of the Commonwealth.
"Part 2." Part 2 of the application for a tax credit
provided for under section 47 of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 47), or any future similar
application requirement provided for under Federal law.
"Qualified expenditures." The costs and expenses incurred by
a qualified taxpayer in the restoration of a qualified historic
structure pursuant to a qualified rehabilitation plan which are
defined as qualified rehabilitation expenditures under section
47(c)(2) of the Internal Revenue Code of 1986 (Public Law
99-514, 26 U.S.C. § 47(c)(2)).
"Qualified historic structure." A commercial building
located in Pennsylvania that is defined as a certified historic
structure under section 47(c)(3) of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 47(c)(3)).
"Qualified rehabilitation plan." A project that is approved
by the Pennsylvania Historical and Museum Commission as being
consistent with the standards for rehabilitation and guidelines
for rehabilitation of historic buildings as adopted by the
United States Secretary of the Interior.
"Qualified tax liability." Tax liability imposed on a
taxpayer under Article III, IV, VI, VII, VIII, IX, XI or XV of
the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971, excluding any tax withheld by an employer under
Article III of the Tax Reform Code of 1971.
"Qualified taxpayer." The owner of a qualified historic
structure or any other person who may qualify for the Federal
rehabilitation tax credit allowable under section 47 of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
47).
Section 3. Credit allowed.
For all taxable years commencing after December 31, 2011,
20110SB1150PN1432 - 2 -
there shall be allowed a tax credit against qualified tax
liability in an amount equal to 25% of qualified expenditures
incurred by a qualified taxpayer pursuant to a qualified
rehabilitation plan.
Section 4. Limitations on credits.
(a) Aggregation of credits.--Credits may not exceed an
aggregate of $10,000,000 in any fiscal year in which tax credits
are allowed.
(b) Qualified historic structure.--Credits allowed to any
qualified historic structure owner shall not exceed $500,000 in
any fiscal year in which tax credits shall be allowed.
Section 5. Excess of credits.
(a) Seven-year carryover.--If the amount of the credits
exceeds the total of a qualified taxpayer's qualified tax
liability, the excess amount shall be carried over for offset
against such taxes in the next succeeding year or years until
the seventh taxable year succeeding the taxable year in which
the qualified rehabilitation plan was placed in service.
(b) Application.--A tax credit certificate issued by the
department shall first be applied against the applicant's
qualified tax liability for the current taxable year as of the
date on which the tax credit certificate was issued before the
tax credit can be applied against any tax liability under
subsection (a).
(c) No carryback or refund.--An applicant is not entitled to
carry back or obtain a refund of all or any portion of an unused
tax credit allowed to the taxpayer under this chapter.
Section 6. Pass-through entities.
If a qualified taxpayer is a corporation having an election
in effect under Subchapter S of the Federal Internal Revenue
20110SB1150PN1432 - 3 -
Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), a
partnership or a limited liability company, the credit provided
under this act shall be claimed by the shareholders of such
corporation, the partners of such partnership or the members of
such limited liability company, pro rata, in the same manner as
the shareholders, partners or members account for the
proportionate share of the income and loss of the corporation,
partnership or limited liability company, or as the
shareholders, partners or members may agree pursuant to an
executed agreement among the shareholders, partners or members
documenting an alternative distribution method, a copy of which
shall be furnished to the department.
Section 7. Transfer of credits.
(a) General rule.--Any person, hereafter designated the
assignor, may sell, assign, convey or otherwise transfer tax
credits allowed or earned under section 3. The taxpayer or
taxpayers acquiring credits, hereafter designated the assignee,
may use the amount of the acquired credits to offset 100% of its
qualified tax liability for either the taxable year in which the
qualified rehabilitation plan was first placed in service or for
the taxable year in which the credit was acquired.
(b) Carryover of seven years.--Unused credits may be carried
forward for seven years following the taxable year in which the
acquisition was made.
(c) Written agreement.--The assignor shall enter into a
written agreement with the assignee establishing the terms and
conditions of the agreement and shall perfect such transfer by
notifying the department and the commission within 90 days of
the effective date of the transfer and shall provide such
information as may be required by the department or the
20110SB1150PN1432 - 4 -
commission to administer and carry out the provisions of this
section.
Section 8. Applications; allocation of credits.
(a) Joint approval by department and commission required.--
Applications for credits shall be made jointly to DCED and the
commission, in such form as DCED and the commission shall
jointly approve. The commission shall be responsible for
reviewing the applications to determine whether the project
proposed qualifies for a credit under section 3. In the event
that the aggregate amount proposed to be claimed in any tax year
and tentatively approved by the commission exceeds the
limitation set forth in section 4, DCED shall be responsible for
allocating the credits among the applicants. In making such
allocation, DCED shall give priority to applications for
qualified historic structures so as to achieve equitable
geographic distribution of the credits throughout this
Commonwealth.
(b) Application deadline.--Applications shall be filed on or
before February 1 of each year for which tax credits are
allowed.
(c) Action on application.--The commission shall complete
its review of the application no later than April 1 or 30 days
following receipt of a complete Part 2 application, whichever
shall occur later, and shall promptly notify the applicant
whether the application has been tentatively approved or the
application has been disapproved and, if disapproved, the
reasons for disapproval. In the event the aggregate amount of
credits claimed on applications timely received by the
commission does not exceed the limitations set forth in section
4, approval by the commission shall be deemed final, and the
20110SB1150PN1432 - 5 -
commission shall issue a certificate to the applicant to that
effect. If the aggregate amount of credits reflected in
applications tentatively approved by the commission exceeds the
limitations set forth in section 4, any approval by the
commission shall be deemed tentative, and final approval may be
granted only by DCED. Upon final approval by DCED, DCED shall
issue a certificate to the applicant to that effect.
(d) Finding.--Before an application is approved, the
department must make a finding that the applicant has filed all
required State tax reports and returns for all applicable
taxable years and paid any balance of State tax due as
determined by assessment or final determination by the
department or court of law upon appeal from a determination of
the department.
Section 9. Fees.
DCED and the commission shall agree upon a schedule of fees
for applications which shall not exceed $5,000 for an
application. The proceeds of fees shall be applied to offset the
costs of administration of the program in such manner as DCED
and the commission agree.
Section 10. Certificates.
The developer of a project for which a certificate has been
issued shall notify the commission when the project has been
placed in service. Upon verifying that the project has been
placed in service and was allowed a Federal credit, the
commission shall endorse the certificate. The certificate shall
state the amount of the credit claimed. The developer or an
assignee of the credit shall attach a copy of the certificate,
as so endorsed, together with any other documentation specified
by the department to any tax return on which the credit or
20110SB1150PN1432 - 6 -
portion thereof is claimed.
Section 11. Repeals.
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the provisions of
this act.
(2) Section 6104(d.2)(2) of the act of July 13, 2005
(P.L.213, No.45), entitled "An act amending Title 27
(Environmental Resources) of the Pennsylvania Consolidated
Statutes, further providing for definitions, for allocation
of Environmental Stewardship Fund and for administrative
expenses; deleting provisions relating to environmental
infrastructure grants; providing for fee deposits;
authorizing indebtedness for environmental initiatives;
authorizing sale of bonds, temporary financing and debt
retirement; further providing for disposal fee for municipal
waste landfills and deposit of disposal fee; deleting certain
sunset provisions; and making a repeal relating to the
Hazardous Sites Cleanup Fund," is repealed.
Section 21. Effective date.
This act shall take effect immediately.
20110SB1150PN1432 - 7 -