Introduced Version
SENATE BILL No. 405
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3.1-16; IC 14-8-2-107; IC 14-21-1-37.
Synopsis: Historic rehabilitation income tax credit. Provides that the
historic rehabilitation income tax credit may be assigned. Provides that
the credit may be recaptured from the person who receives the
certification or from an assignee to whom the property is transferred.
Provides that the transfer of the property as a condominium will not
cause the credit to be recaptured. (Current law provides the credit is
recaptured if the property is transferred within five years of the
completion of the rehabilitation or preservation.) Provides that the
adjusted basis of the property is not reduced by the amount of credit if
a person is entitled to a federal low income housing credit for the
historic property. Increases the amount of the credit to 40% of qualified
expenses for the rehabilitation or preservation of a historic property if
the qualified expenses are less than $2,000,000. (Current law provides
that the amount of the credit equals 20% of qualified expenses.)
Increases the credit to 40% of qualified expenses if the credit is
awarded to rehabilitate or preserve a: (1) school; (2) hospital; or (3)
project that receives a grant from the Indiana main street program.
Increases the basis of qualified expenses for the preservation or
rehabilitation of historic property which is located in a United States
Housing and Urban Development qualified census tract or difficult to
develop area. Provides that the division of historic preservation and
archeology of the department of natural resources may collect a fee
which equals 2.5% of qualified expenses for projects with over
$2,000,000 qualified expenses. Provides the fee is used to pay for
administrative costs associated with certifying historic property for the
tax credit. Establishes the historic rehabilitation credit fund. Provides
(Continued next page)
Effective: Upon passage; July 1, 2009.
Merritt
January 12, 2009, read first time and referred to Committee on Tax and Fiscal Policy.
Digest Continued
that the
fee collected by the division of historic preservation and
archeology shall be deposited into the fund. Provides that money in the
fund in excess of $10,000,000 reverts to the state general fund at the
end of a fiscal year. Repeals the annual state-wide limit for the credit.
Introduced
First Regular Session 116th General Assembly (2009)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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SENATE BILL No. 405
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 6-3.1-16-1.5; (09)IN0405.1.1. -->
SECTION 1. IC 6-3.1-16-1.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 1.5. (a) As used in this chapter,
"difficult development area" has the meaning set forth in Section
42(d)(5)(C)(iii) of the Internal Revenue Code.
SOURCE: IC 6-3.1-16-2.8; (09)IN0405.1.2. -->
SECTION 2. IC 6-3.1-16-2.8 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: 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; (09)IN0405.1.3. -->
SECTION 3. IC 6-3.1-16-3.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 3.5. (a) As used in this chapter,
"qualified census tract" has the meaning set forth in Section
42(d)(5)(C)(ii) of the Internal Revenue Code.
SOURCE: IC 6-3.1-16-6.2; (09)IN0405.1.4. -->
SECTION 4. IC 6-3.1-16-6.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 6.2. As used in this chapter,
"taxpayer" means:
(1) a person that:
(A) is the holder of a credit that is awarded or assigned
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 or assigned
under this chapter; and
(B) does not have any state tax liability against which any
part of the credit may be applied.
SOURCE: IC 6-3.1-16-7; (09)IN0405.1.5. -->
SECTION 5. IC 6-3.1-16-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: 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 division.
(c) Except as provided in section 7.1 of this chapter, the amount
of the credit is equal to the following:
(1) Forty percent (40%) of the qualified expenditures the
taxpayer makes if the qualified expenditures are less than two
million dollars ($2,000,000).
(2) Forty percent (40%) of the qualified expenditures the
taxpayer makes if the property:
(A) is a school;
(B) is a hospital; or
(C) receives a grant under the main street program
established under IC 4-4-16-1.
(3) Twenty percent (20%) of the qualified expenditures the
taxpayer makes if the property does not qualify under
subdivision (1) or (2).
(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 6-3.1-16-7.1; (09)IN0405.1.6. -->
SECTION 6. IC 6-3.1-16-7.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 7.1. (a) This section applies only
to a person who applies for a credit for the preservation or
rehabilitation of historic property located in a:
(1) difficult development area; or
(2) qualified census tract.
(b) This section does not apply to the calculation of a fee under
IC 14-21-1-37.
(c) A person's qualified expenses used to calculate the tax credit
provided in section 7 of this chapter equals the person's total
qualified expenses multiplied by one and three-tenths (1.3).
SOURCE: IC 6-3.1-16-8; (09)IN0405.1.7. -->
SECTION 7. IC 6-3.1-16-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 8. A
taxpayer person
qualifies for a credit under section 7 of this chapter if all of the
following conditions are met:
(1) The historic property is:
(A) located in Indiana;
(B) at least fifty (50) years old; and
(C) except as provided in section 7(c) of this chapter, owned
by the
taxpayer. person.
(2) The division certifies that the historic property is listed in the
register of Indiana historic sites and historic structures.
(3) The division certifies that the
taxpayer person submitted a
proposed preservation or rehabilitation plan to the division that
complies with the standards of the division.
(4) The division 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 person's trade or business.
(7) The qualified expenditures for preservation or rehabilitation
of the historic property exceed ten thousand dollars ($10,000).
(8) The division certifies that a fee required under
IC 14-21-1-37 has been paid.
SOURCE: IC 6-3.1-16-9; (09)IN0405.1.8. -->
SECTION 8. IC 6-3.1-16-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 9. (a) The division shall
provide the certifications referred to in section 8(3) and 8(4) of this
chapter if a taxpayer's person's proposed preservation or rehabilitation
plan complies with the standards of the division and the taxpayer's
person's preservation or rehabilitation work complies with the plan.
(b) The taxpayer person may appeal a decision by the division
under this chapter to the review board.
SOURCE: IC 6-3.1-16-11; (09)IN0405.1.9. -->
SECTION 9. IC 6-3.1-16-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: 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; (09)IN0405.1.10. -->
SECTION 10. IC 6-3.1-16-12 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 12. (a) A credit claimed
under this chapter shall be recaptured from the taxpayer person who
receives the certifications referred to in section 8(3) and 8(4) of this
chapter or, if applicable, from an assignee to which the property is
transferred, if:
(1) the property is transferred, other than:
(A) to an assignee; or
(B) as a condominium (as defined in IC 32-25-2-7);
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) 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 person who receives the certifications under section
8 of this chapter or, if applicable, an assignee to which the property
is transferred, for the taxable year during which the credit is
recaptured.
SOURCE: IC 6-3.1-16-13.5; (09)IN0405.1.11. -->
SECTION 11. IC 6-3.1-16-13.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 13.5. (a) The holder of a credit
may assign any part of the credit to which the holder is entitled
under this chapter to another person if the holder complies with
this section.
(b) The assignor must provide the assignee with a copy of the
certifications by the division required under sections 8 and 9 of this
chapter.
(c) The assignor must provide written notification of the
assignment to the:
(1) division; and
(2) department;
not later than thirty (30) days after the assignment.
(d) The notification provided under subsection (c) must contain:
(1) the name of the assignor;
(2) the name of the assignee;
(3) the date of assignment;
(4) the terms of the assignment; and
(5) any information requested by the division or the
department.
(e) The assignor may assign a credit under this chapter to an
assignee other than a holder of a credit under Section 47 of the
Internal Revenue Code for the same property.
(f) If any part of a credit is assigned under this section, the
assignor and the assignee shall report the assignment on their state
tax returns for the year in which the assignment is made, in the
manner prescribed by the department.
SOURCE: IC 6-3.1-16-13.7; (09)IN0405.1.12. -->
SECTION 12. IC 6-3.1-16-13.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 13.7. The holder of a credit that
is assigned in conformity with this chapter is entitled to a credit
against the holder's state tax liability to the same extent as if the
holder were the person to which the credit was awarded.
SOURCE: IC 14-8-2-107; (09)IN0405.1.13. -->
SECTION 13. IC 14-8-2-107, AS AMENDED BY P.L.85-2008,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 107. "Fund" has the following meaning:
(1) For purposes of IC 14-9-5, the meaning set forth in
IC 14-9-5-1.
(2) For purposes of IC 14-9-8-21, the meaning set forth in
IC 14-9-8-21.
(3) For purposes of IC 14-9-8-21.5, the meaning set forth in
IC 14-9-8-21.5.
(4) For purposes of IC 14-9-9, the meaning set forth in
IC 14-9-9-3.
(5) For purposes of IC 14-12-1, the meaning set forth in
IC 14-12-1-1.
(6) For purposes of IC 14-12-2, the meaning set forth in
IC 14-12-2-2.
(7) For purposes of IC 14-12-3, the meaning set forth in
IC 14-12-3-2.
(8) For purposes of IC 14-13-1, the meaning set forth in
IC 14-13-1-2.
(9) For purposes of IC 14-13-2, the meaning set forth in
IC 14-13-2-3.
(10) For purposes of IC 14-16-1, the meaning set forth in
IC 14-16-1-30.
(11) For purposes of IC 14-19-8, the meaning set forth in
IC 14-19-8-1.
(12) For purposes of IC 14-20-1, the meaning set forth in
IC 14-20-1-3.
(13) For purposes of IC 14-20-11, the meaning set forth in
IC 14-20-11-2.
(14) For purposes of IC 14-21-1-37, the meaning set forth in
IC 14-21-1-37(a).
(14) (15) For purposes of IC 14-21-4, the meaning set forth in
IC 14-21-4-10.
(15) (16) For purposes of IC 14-22-3, the meaning set forth in
IC 14-22-3-1.
(16) (17) For purposes of IC 14-22-4, the meaning set forth in
IC 14-22-4-1.
(17) (18) For purposes of IC 14-22-5, the meaning set forth in
IC 14-22-5-1.
(18) (19) For purposes of IC 14-22-8, the meaning set forth in
IC 14-22-8-1.
(19) (20) For purposes of IC 14-22-34, the meaning set forth in
IC 14-22-34-2.
(20) (21) For purposes of IC 14-23-3, the meaning set forth in
IC 14-23-3-1.
(21) (22) For purposes of IC 14-24-4.5, the meaning set forth in
IC 14-24-4.5-2(5).
(22) (23) For purposes of IC 14-25-2-4, the meaning set forth in
IC 14-25-2-4.
(23) (24) For purposes of IC 14-25-10, the meaning set forth in
IC 14-25-10-1.
(24) (25) For purposes of IC 14-25-11-19, the meaning set forth
in IC 14-25-11-19.
(25) (26) For purposes of IC 14-25.5, the meaning set forth in
IC 14-25.5-1-3.
(26) (27) For purposes of IC 14-28-5, the meaning set forth in
IC 14-28-5-2.
(27) (28) For purposes of IC 14-31-2, the meaning set forth in
IC 14-31-2-5.
(28) (29) For purposes of IC 14-25-12, the meaning set forth in
IC 14-25-12-1.
(29) (30) For purposes of IC 14-32-8, the meaning set forth in
IC 14-32-8-1.
(30) (31) For purposes of IC 14-33-14, the meaning set forth in
IC 14-33-14-3.
(31) (32) For purposes of IC 14-33-21, the meaning set forth in
IC 14-33-21-1.
(32) (33) For purposes of IC 14-34-6-15, the meaning set forth in
IC 14-34-6-15.
(33) (34) For purposes of IC 14-34-14, the meaning set forth in
IC 14-34-14-1.
(34) (35) For purposes of IC 14-37-10, the meaning set forth in
IC 14-37-10-1.
SOURCE: IC 14-21-1-37; (09)IN0405.1.14. -->
SECTION 14. IC 14-21-1-37 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 37. (a) As used in this section,
"fund" refers to the historic rehabilitation credit fund established
in subsection (d).
(b) As used in this section, "person" has the meaning set forth
in IC 6-3.1-16-2.8.
(c) As used in this section, "qualified expenditures" has the
meaning set forth in IC 6-3.1-16-4.
(d) The historic rehabilitation credit fund is established to fund
administrative costs associated with making certifications under
IC 6-3.1-16-8.
(e) The fund consists of the following:
(1) Fees collected under this section.
(2) Appropriations by the general assembly.
(3) Money transferred to the fund from other funds.
(4) Money from any other source deposited in the fund.
(f) The director shall manage the fund. The fund shall be used
for administrative costs:
(1) of the fund; and
(2) associated with making certifications under IC 6-3.1-16-8.
(g) Money in the fund at the end of a state fiscal year does not
revert to the state general fund or any other fund. However, if the
amount of money in the fund at the end of a particular fiscal year
exceeds ten million dollars ($10,000,000), the treasurer shall
transfer the excess from the fund into the state general fund.
(h) The treasurer of state shall invest the money in the fund not
currently needed to meet the obligations of the fund in the same
manner as other public trust funds are invested. Interest that
accrues from these investments shall be deposited in the fund.
(i) The division shall charge a person a fee to provide
certifications under IC 6-3.1-16-8 if the qualified expenses to
preserve or rehabilitate a historic property exceed two million
dollars ($2,000,000). The amount of the fee is two and five-tenths
percent (2.5%) of the amount of qualified expenses.
SOURCE: IC 6-3.1-16-6.1; IC 6-3.1-16-14.
; (09)IN0405.1.15. -->
SECTION 15. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2009]: IC 6-3.1-16-6.1; IC 6-3.1-16-14.
SOURCE: ; (09)IN0405.1.16. -->
SECTION 16. [EFFECTIVE UPON PASSAGE] The department
of state revenue or the department of natural resources may adopt
temporary rules in the manner provided for the adoption of
emergency rules under IC 4-22-2-37.1 to implement this act. A
temporary rule adopted under this SECTION expires on the
earliest of the following:
(1) The date that the department of state revenue or the
department of natural resources adopts another temporary
rule under this SECTION that repeals, amends, or supersedes
the previously adopted temporary rule.
(2) The date that the department of state revenue or the
department of natural resources adopts a permanent rule
under IC 4-22-2 that repeals, amends, or supersedes the
previously adopted temporary rule.
(3) The date specified in the temporary rule.
(4) December 31, 2010.
SOURCE: ; (09)IN0405.1.17. -->
SECTION 17.
An emergency is declared for this act.