Text: HF00481 Text: HF00483 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 404A.1 PROPERTY REHABILITATION 1 2 TAX CREDIT ELIGIBLE PROPERTY. 1 3 1. A property rehabilitation tax credit is granted against 1 4 the income tax imposed under chapter 422, division II or 1 5 division III for the rehabilitation of eligible property 1 6 located in this state as provided in this chapter. Tax 1 7 credits in excess of tax liabilities may be carried forward 1 8 for up to seven years or back for up to three years. 1 9 2. Eligible property for which a taxpayer may receive the 1 10 property rehabilitation tax credit computed under this chapter 1 11 includes all of the following: 1 12 a. Property constructed prior to 1935 which is located in 1 13 a HUD eligible area. 1 14 b. Property located outside of HUD eligible areas and that 1 15 meets any of the following: 1 16 (1) Is listed on the national register of historic places 1 17 or is eligible for such listing. 1 18 (2) Is designated as of historic significance to a 1 19 district listed in the national register of historic places or 1 20 is eligible for such designation. 1 21 (3) Is located in a historical preservation district as 1 22 defined in section 303.20. 1 23 (4) Is designated a local landmark by a city or county 1 24 ordinance. 1 25 (5) Is a barn constructed prior to 1935. 1 26 3. For purposes of this section, "HUD eligible area" means 1 27 an impoverished area in an entitlement city as designated by 1 28 the United States department of housing and urban development. 1 29 Sec. 2. NEW SECTION. 404A.2 AMOUNT OF CREDIT. 1 30 The amount of the credit equals twenty-five percent of the 1 31 qualified rehabilitation costs made to eligible property. In 1 32 the case of commercial property, rehabilitation costs must 1 33 equal at least fifty percent of the assessed value of the 1 34 property, excluding the land. In the case of residential 1 35 property or barns, the rehabilitation costs must equal at last 2 1 ten thousand dollars or fifteen percent of the fair market 2 2 value, excluding the land, whichever is less. In computing 2 3 the tax credit for eligible property that is classified as 2 4 residential or as commercial with multi-family residential 2 5 units, the rehabilitation costs used shall not exceed one 2 6 hundred twenty thousand dollars per residential unit. In 2 7 computing the tax credit, the only costs which may be included 2 8 are the rehabilitation costs incurred between the period 2 9 ending on the project completion date and beginning on the 2 10 later of either the date of issuance of the approval of the 2 11 project as provided in section 404A.3 or two years prior to 2 12 the project completion date. 2 13 Sec. 3. NEW SECTION. 404A.3 APPROVAL OF REHABILITATION 2 14 PROJECT. 2 15 1. a. In order for costs of a rehabilitation project to 2 16 qualify for a tax credit, the rehabilitation project must 2 17 receive approval from all of the following bodies: 2 18 (1) The governing bodies of the city, council, and council 2 19 of governments in which the eligible property exists and which 2 20 has established approved selection criteria and standards for 2 21 rehabilitation projects involving eligible property. 2 22 (2) The department of economic development. 2 23 b. Applications for approvals from the department and the 2 24 appropriate governing bodies shall be on forms approved by the 2 25 department and shall contain information as required by the 2 26 department. The information shall at least include the 2 27 approximate date of the start of rehabilitation, the 2 28 approximate date of completion, as well as the cost. 2 29 2. The governing body of a city, county, or council of 2 30 governments may establish selection criteria and standards for 2 31 rehabilitation projects involving eligible property. If 2 32 standards are established, the main emphasis of the standards 2 33 shall be to ensure that a rehabilitation project maintains the 2 34 integrity of the eligible property. To the extent applicable, 2 35 the standards shall be consistent with the standards of the 3 1 United States secretary of the interior for rehabilitation of 3 2 eligible property that is listed on the national register of 3 3 historic places or is designated as of historic significance 3 4 to a district listed in the national register of historic 3 5 places shall be consistent with standards for issuance of 3 6 certificates of appropriation under sections 303.27 through 3 7 303.32. Upon establishing selection criteria and standards, 3 8 the governing body shall seek approval from the department of 3 9 economic development. Until a governing body's selection 3 10 criteria and project standards have been approved by the 3 11 department, a rehabilitation project on eligible property 3 12 within the jurisdiction of the governing body does not need 3 13 the approval of that governing body for the project to receive 3 14 the tax credit. However, if construction on the project has 3 15 not begun within sixty days of receiving the approval of the 3 16 department, the project must meet the standards of a governing 3 17 body if the governing body's standards have received 3 18 department approval within that sixty-day period. 3 19 Sec. 4. NEW SECTION. 404A.4 PROJECT COMPLETION AND TAX 3 20 CREDIT CERTIFICATION CREDIT TRANSFER. 3 21 1. Upon completion of the rehabilitation project, a 3 22 certification of completion must be obtained from each of the 3 23 bodies which approved the project. The governing bodies each 3 24 shall determine that the project is actually complete and was 3 25 done according to the approved standards of each governing 3 26 body. Each governing body may issue a separate certificate of 3 27 completion or all of the governing bodies may issue a joint 3 28 certificate of completion. A completion certificate shall 3 29 identify the person claiming the tax credit under this chapter 3 30 and the rehabilitation costs incurred up to the two years 3 31 preceding the completion date. 3 32 2. Upon receipt of all separate certificates of completion 3 33 or a joint certificate of completion, the person claiming the 3 34 tax credit under this chapter shall present the completion 3 35 certificates or certificate to the department of economic 4 1 development. After verifying the eligibility for the tax 4 2 credit, the department shall issue a property rehabilitation 4 3 tax credit certificate to be attached to the person's tax 4 4 return. The tax credit certificate shall contain the 4 5 taxpayer's name, address, tax identification number, the date 4 6 of project completion, the amount of credit, other information 4 7 required by the department of revenue and finance, and a place 4 8 for the name and tax identification number of any transferee 4 9 and the amount of the tax credit being transferred. 4 10 3. A person receiving a property rehabilitation tax credit 4 11 under this chapter may transfer all or a portion of the unused 4 12 tax credit to any other person. The transferee may use the 4 13 amount of the tax credit transferred against the taxes imposed 4 14 under chapter 422, divisions II and III, for any tax year the 4 15 original transferor could have claimed the credit. Any 4 16 consideration received for the transfer of the tax credit 4 17 shall not be included as income under chapter 422, divisions 4 18 II and III. Any consideration paid for the transfer of the 4 19 tax credit shall not be deducted from income under chapter 4 20 422, divisions II and III. 4 21 Sec. 5. NEW SECTION. 404A.5 ECONOMIC IMPACT 4 22 RECOMMENDATIONS. 4 23 The department of economic development shall be responsible 4 24 for keeping the general assembly and the legislative fiscal 4 25 bureau informed on the overall economic impact to the state of 4 26 the rehabilitation of eligible properties. An annual report 4 27 shall be filed which shall include, but is not limited to, 4 28 data on the number and potential value of rehabilitation 4 29 projects begun during the latest twelve-month period, the 4 30 total property rehabilitation tax credits originally granted 4 31 during that period, the potential reduction in state tax 4 32 revenues as a result of all tax credits still unused, and the 4 33 potential increase in local property tax revenues as a result 4 34 of the rehabilitated projects. The department, to the extent 4 35 it is able, shall provide recommendations on whether a limit 5 1 on tax credits should be established, the need for a broader 5 2 or more restrictive definition of eligible property, and other 5 3 adjustments to the tax credits under this chapter. 5 4 Sec. 6. NEW SECTION. 422.11D PROPERTY REHABILITATION TAX 5 5 CREDIT. 5 6 1. The taxes imposed under this division, less the credits 5 7 allowed under sections 422.12 and 422.12B, shall be reduced by 5 8 a property rehabilitation tax credit equal to the amount as 5 9 computed under chapter 404A for rehabilitating eligible 5 10 property. Any credit in excess of the tax liability is 5 11 nonrefundable and may be carried forward for up to seven tax 5 12 years or backward up to three tax years. 5 13 2. An individual may claim a property rehabilitation tax 5 14 credit allowed a partnership, limited liability company, S 5 15 corporation, estate, or trust electing to have the income 5 16 taxed directly to the individual. The amount claimed by the 5 17 individual shall be based upon the pro rata share of the 5 18 individual's earnings of a partnership, limited liability 5 19 company, S corporation, estate, or trust. 5 20 3. However, if the original taxpayer who receives the 5 21 property rehabilitation tax credit transfers all or a portion 5 22 of the tax credit, any transferee shall only be entitled to 5 23 use the amount of the tax credit transferred for a tax year 5 24 for which the original taxpayer could have claimed the credit. 5 25 4. For purposes of this section, "eligible property" means 5 26 the same as used in section 404A.1. 5 27 Sec. 7. Section 422.33, Code 1999, is amended by adding 5 28 the following new subsection: 5 29 NEW SUBSECTION. 8. a. The taxes imposed under this 5 30 division shall be reduced by a property rehabilitation tax 5 31 credit equal to the amount as computed under chapter 404A for 5 32 rehabilitating eligible property. Any credit in excess of the 5 33 tax liability is nonrefundable but may be carried forward for 5 34 up to seven tax years or backward up to three tax years. 5 35 b. However, if the original taxpayer who receives the 6 1 property rehabilitation tax credit transfers all or a portion 6 2 of the tax credit, any transferee shall only be entitled to 6 3 use the amount of the tax credit transferred for a tax year 6 4 for which the original taxpayer could have claimed the credit. 6 5 c. For purposes of this subsection, "eligible property" 6 6 means the same as used in section 404A.1. 6 7 EXPLANATION 6 8 The bill provides for an individual and corporate income 6 9 tax credit equal to 25 percent of the costs of rehabilitating 6 10 eligible properties. Eligible properties are properties 6 11 constructed prior to 1935 in HUD eligible areas; properties 6 12 located out of HUD eligible areas which are listed or eligible 6 13 to be listed on the national register of historic properties, 6 14 a contributing element in a local historic district, or a 6 15 local landmark; or a barn constructed prior to 1935. In the 6 16 case of commercial property, rehabilitation costs must equal 6 17 at least 50 percent of the assessed value of the property, 6 18 excluding the land. In the case of residential property or 6 19 barns, the rehabilitation costs must equal at least $10,000 or 6 20 15 percent of the fair market value, excluding the land, 6 21 whichever is less. In addition, the rehabilitation project 6 22 must be approved by the governing body of the city, county, 6 23 and councils of government in which the property is located if 6 24 the governing bodies have established rehabilitation standards 6 25 and selection criteria which have been approved by the 6 26 department of economic development. 6 27 The tax credits may be carried forward seven years or 6 28 carried back three tax years. In addition, the taxpayer may 6 29 transfer to another any unused tax credit to be applied to the 6 30 individual or corporate income tax of the transferee. 6 31 The department of economic development is responsible for 6 32 keeping the general assembly and legislative fiscal bureau 6 33 appraised of the overall economic impact of the tax credit as 6 34 it relates to rehabilitation to eligible properties. 6 35 LSB 1656HH 78 7 1 mg/jw/5
Text: HF00481 Text: HF00483 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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