Senate
File
521
-
Introduced
SENATE
FILE
521
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SSB
1204)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
property
1
rehabilitation
tax
credit
program
by
the
department
of
2
cultural
affairs
and
including
retroactive
applicability
3
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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1335SV
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521
Section
1.
Section
404A.1,
Code
2011,
is
amended
to
read
as
1
follows:
2
404A.1
Historic
preservation
and
cultural
and
entertainment
3
district
tax
credit
——
eligible
property
definitions
.
4
1.
a.
A
historic
preservation
and
cultural
and
5
entertainment
district
tax
credit,
subject
to
the
availability
6
of
the
credit,
is
granted
against
the
tax
imposed
under
7
chapter
422,
division
II
,
III
,
or
V
,
or
chapter
432
,
for
the
8
substantial
rehabilitation
of
eligible
property
located
in
this
9
state
as
provided
in
this
chapter
.
10
b.
Tax
credits
in
excess
of
tax
liabilities
shall
be
11
refunded
or
credited
as
provided
in
section
404A.4,
subsection
12
3
.
13
2.
For
purposes
of
this
chapter,
unless
the
context
14
otherwise
requires:
15
2.
a.
Eligible
property
“Eligible
property”
means
property
16
for
which
a
taxpayer
may
receive
the
historic
preservation
and
17
cultural
and
entertainment
district
tax
credit
computed
under
18
this
chapter
and
includes
all
of
the
following:
19
a.
(1)
Property
listed
on
the
national
register
of
historic
20
places
or
eligible
for
such
listing.
21
b.
(2)
Property
designated
as
of
historic
significance
to
a
22
district
listed
in
the
national
register
of
historic
places
or
23
eligible
for
such
designation.
24
c.
(3)
Property
or
district
designated
a
local
landmark
by
25
a
city
or
county
ordinance.
26
d.
(4)
A
barn
constructed
prior
to
1937.
27
b.
“Placed
in
service”
means
the
same
as
used
in
section
47
28
of
the
Internal
Revenue
Code.
29
c.
“Qualified
rehabilitation
costs”
means
expenditures
30
made
for
the
rehabilitation
of
eligible
property
and
includes
31
qualified
rehabilitation
expenditures
as
defined
in
section
47
32
of
the
Internal
Revenue
Code.
33
(1)
Qualified
rehabilitation
costs
include
amounts
if
they
34
are
properly
includable
in
computing
the
basis
for
tax
purposes
35
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521
of
the
eligible
property.
1
(2)
Amounts
treated
as
an
expense
and
deducted
in
the
2
tax
year
in
which
they
are
paid
or
incurred
and
amounts
that
3
are
otherwise
not
added
to
the
basis
for
tax
purposes
of
the
4
eligible
property
are
not
qualified
rehabilitation
costs.
5
(3)
Amounts
incurred
for
architectural
and
engineering
6
fees,
site
survey
fees,
legal
expenses,
insurance
premiums,
7
development
fees,
and
other
construction-related
costs
are
8
qualified
rehabilitation
costs
to
the
extent
they
are
added
to
9
the
basis
for
tax
purposes
of
the
eligible
property.
10
(4)
Costs
of
sidewalks,
parking
lots,
and
landscaping
do
not
11
constitute
qualified
rehabilitation
costs.
12
d.
“Rehabilitation
period”
means
the
period
of
time
during
13
which
an
eligible
property
is
rehabilitated
commencing
from
14
the
date
on
which
the
first
qualified
rehabilitation
cost
is
15
incurred
and
ending
with
the
end
of
the
taxable
year
in
which
16
the
property
is
placed
in
service.
A
project’s
rehabilitation
17
period
may
include
dates
that
precede
approval
of
a
project
18
under
section
404A.3,
but
any
costs
incurred
prior
to
such
19
approval
must
be
qualified
rehabilitation
expenditures
as
20
defined
in
section
47(c)(2)
of
the
Internal
Revenue
Code
in
21
order
to
be
qualified
rehabilitation
costs
under
this
chapter.
22
e.
“Substantial
rehabilitation”
means
qualified
23
rehabilitation
costs
that
meet
or
exceed
the
following:
24
(1)
In
the
case
of
commercial
property,
costs
totaling
at
25
least
fifty
percent
of
the
assessed
value
of
the
property,
26
excluding
the
land,
prior
to
the
rehabilitation.
27
(2)
In
the
case
of
residential
property
or
barns,
costs
28
totaling
at
least
twenty-five
thousand
dollars
or
twenty-five
29
percent
of
the
assessed
value,
excluding
the
land,
prior
to
30
rehabilitation,
whichever
is
less.
31
Sec.
2.
Section
404A.2,
Code
2011,
is
amended
to
read
as
32
follows:
33
404A.2
Amount
of
credit.
34
1.
The
amount
of
the
credit
equals
twenty-five
percent
of
35
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521
the
qualified
rehabilitation
costs
made
to
incurred
for
the
1
substantial
rehabilitation
of
eligible
property.
2
a.
In
the
case
of
commercial
property,
rehabilitation
costs
3
must
equal
at
least
fifty
percent
of
the
assessed
value
of
the
4
property,
excluding
the
land,
prior
to
the
rehabilitation.
5
b.
In
the
case
of
residential
property
or
barns,
the
6
rehabilitation
costs
must
equal
at
least
twenty-five
thousand
7
dollars
or
twenty-five
percent
of
the
assessed
value,
excluding
8
the
land,
prior
to
the
rehabilitation,
whichever
is
less.
9
c.
In
computing
the
tax
credit
for
eligible
property
that
10
is
classified
as
residential
or
as
commercial
with
multifamily
11
residential
units,
the
rehabilitation
costs
used
shall
not
12
exceed
one
hundred
thousand
dollars
per
residential
unit.
13
d.
In
computing
the
tax
credit,
the
only
costs
which
may
14
be
included
are
the
qualified
rehabilitation
costs
incurred
15
between
the
period
ending
on
the
project
completion
date
and
16
beginning
on
the
date
two
years
prior
to
the
project
completion
17
date,
provided
that
any
qualified
rehabilitation
costs
incurred
18
prior
to
the
date
of
approval
of
the
project
as
provided
in
19
section
404A.3
must
be
qualified
rehabilitation
expenditures
20
under
the
federal
rehabilitation
credit
in
section
47
of
the
21
Internal
Revenue
Code.
22
2.
For
purposes
of
this
chapter
,
qualified
rehabilitation
23
costs
include
amounts
if
they
are
properly
includable
in
24
computing
the
basis
for
tax
purposes
of
the
eligible
property.
25
a.
Amounts
treated
as
an
expense
and
deducted
in
the
tax
26
year
in
which
they
are
paid
or
incurred
and
amounts
that
are
27
otherwise
not
added
to
the
basis
for
tax
purposes
of
the
28
eligible
property
are
not
qualified
rehabilitation
costs.
29
b.
Amounts
incurred
for
architectural
and
engineering
30
fees,
site
survey
fees,
legal
expenses,
insurance
premiums,
31
development
fees,
and
other
construction-related
costs
are
32
qualified
rehabilitation
costs
to
the
extent
they
are
added
to
33
the
basis
for
tax
purposes
of
the
eligible
property.
34
c.
Costs
of
sidewalks,
parking
lots,
and
landscaping
do
not
35
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521
constitute
qualified
rehabilitation
costs.
1
3.
2.
For
purposes
of
individual
and
corporate
income
2
taxes
and
the
franchise
tax,
the
increase
in
the
basis
of
the
3
rehabilitated
property
that
would
otherwise
result
from
the
4
qualified
rehabilitation
costs
shall
be
reduced
by
the
amount
5
of
the
credit
computed
under
this
chapter
.
6
Sec.
3.
Section
404A.3,
subsection
3,
paragraph
b,
Code
7
2011,
is
amended
to
read
as
follows:
8
b.
The
eligible
property
shall
be
placed
in
service
within
9
thirty-six
sixty
months
of
the
date
on
which
the
project
10
application
was
approved
under
this
section
.
For
purposes
of
11
this
section
,
“placed
in
service”
has
the
same
meaning
as
used
12
for
purposes
of
section
47
of
the
Internal
Revenue
Code.
The
13
department
may
provide
by
rule
for
the
allowance
of
additional
14
time
to
complete
a
project.
15
Sec.
4.
Section
404A.4,
subsection
1,
Code
2011,
is
amended
16
to
read
as
follows:
17
1.
Upon
completion
of
the
rehabilitation
project,
a
18
certification
of
completion
must
be
obtained
from
the
state
19
historic
preservation
office
of
the
department
of
cultural
20
affairs.
A
completion
certificate
shall
identify
the
person
21
claiming
the
tax
credit
under
this
chapter
and
the
qualified
22
rehabilitation
costs
incurred
up
to
the
two
years
preceding
the
23
completion
date
during
the
rehabilitation
period
.
24
Sec.
5.
Section
404A.4,
subsection
2,
paragraph
d,
Code
25
2011,
is
amended
to
read
as
follows:
26
d.
For
the
fiscal
year
beginning
July
1,
2012,
and
for
each
27
fiscal
year
thereafter,
the
department
office
shall
reserve
not
28
more
than
forty-five
million
dollars
worth
of
tax
credits
for
29
any
one
taxable
year.
30
Sec.
6.
RETROACTIVE
APPLICABILITY.
The
following
provision
31
or
provisions
of
this
Act
apply
retroactively
to
July
1,
2009,
32
for
projects
approved
and
tax
credits
reserved
on
or
after
that
33
date:
34
1.
The
sections
of
this
Act
amending
section
404A.1.
35
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521
2.
The
sections
of
this
Act
amending
section
404A.2.
1
3.
The
sections
of
this
Act
amending
section
404A.3.
2
EXPLANATION
3
This
bill
relates
to
the
administration
of
the
historic
4
preservation
property
rehabilitation
tax
credit
program
5
administered
by
the
department
of
cultural
affairs.
6
The
bill
makes
the
following
changes
to
the
administration
7
of
the
program:
8
(1)
Currently,
property
classified
as
residential
or
as
9
commercial
with
multifamily
residential
units
may
not
exceed
10
$100,000
in
rehabilitation
costs
used
per
residential
unit.
11
The
bill
eliminates
this
requirement.
12
(2)
Currently,
the
program
uses
a
24-month
period
for
13
purposes
of
determining
the
costs
that
qualify
for
purposes
14
of
computing
the
amount
of
the
tax
credit.
The
bill
provides
15
for
a
rehabilitation
period
commencing
from
the
date
the
first
16
qualified
rehabilitation
cost
is
incurred
and
ending
with
the
17
end
of
the
taxable
year
in
which
the
property
is
placed
in
18
service.
19
(3)
Currently,
all
rehabilitation
projects
must
be
20
completed
and
placed
in
service
within
36
months
of
approval.
21
The
bill
allows
projects
up
to
60
months
in
which
to
be
22
completed.
23
(4)
A
reference
to
the
department
of
cultural
affairs
is
24
changed
to
the
state
historic
preservation
office.
25
The
changes
numbered
(1),
(2),
and
(3)
apply
retroactively
26
to
July
1,
2009,
for
projects
approved
and
tax
credits
reserved
27
on
or
after
that
date.
28
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