House Bill 1355c1

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    Florida House of Representatives - 1998             CS/HB 1355

        By the Committees on Finance & Taxation, Tourism and
    Representatives Barreiro, Bullard, Culp, Livingston,
    Harrington, Melvin, D. Prewitt and Murman




  1                      A bill to be entitled

  2         An act relating to corporate income tax;

  3         creating s. 220.185, F.S.; providing findings

  4         and purpose; authorizing a credit against such

  5         tax equal to a percentage of the costs of

  6         rehabilitation of a historic building used for

  7         commercial purposes; providing requirements and

  8         limitations; requiring certification with

  9         respect to the period during which the property

10         was used for a commercial purpose; providing

11         for carryover of the credit; providing

12         eligibility requirements for historic buildings

13         and improvements thereto; providing application

14         requirements; requiring a resolution by the

15         local government; providing duties of the

16         Division of Historical Resources, Department of

17         State, and Department of Revenue regarding

18         administration and monitoring of exemptions;

19         amending s. 220.02, F.S.; providing order of

20         credits against the tax; amending s. 220.13,

21         F.S., which provides for the determination of

22         adjusted federal income, to provide for the

23         addition of rehabilitation costs equal to the

24         credit under s. 220.185 to a taxpayer's taxable

25         income; providing an effective date.

26

27  Be It Enacted by the Legislature of the State of Florida:

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29         Section 1.  Section 220.185, Florida Statutes, is

30  created to read:

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  1         220.185  Credit for rehabilitation of historic

  2  buildings.--

  3         (1)  LEGISLATIVE FINDINGS.--The Legislature finds that:

  4         (a)  The abundant and valuable heritage reflected in

  5  the many historic properties around the state is significant

  6  and worthy of conservation and preservation.  Chapter 267

  7  clearly provides that the policy of this state regarding its

  8  nonrenewable historic resources is to include:

  9         1.  Providing leadership in the preservation of the

10  state's historic resources.

11         2.  Contributing to the preservation of non-state-owned

12  historic resources and giving encouragement to organizations

13  and individuals undertaking preservation by private means.

14         3.  Fostering conditions, using measures that include

15  financial and technical assistance, for a harmonious

16  coexistence of society and state historic resources.

17         4.  Encouraging the public and private preservation and

18  utilization of elements of the state's historically built

19  environment.

20         (b)  Many historic buildings in this state could be

21  rehabilitated in a manner that reflects their heritage, and be

22  used for commercial purposes, thereby facilitating and

23  promoting investment in, and preservation of, these valuable

24  historical resources.

25         (c)  In order to encourage and promote private

26  investment in historic buildings, it is necessary to establish

27  a program that provides incentives significant enough to

28  encourage participation.

29         (2)  POLICY AND PURPOSE.--It is the policy of this

30  state to encourage private corporations to invest in the

31  adaptive reuse and preservation of historic buildings.  The

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  1  purpose of this section is to establish a program that

  2  provides incentives for such investment by granting state

  3  corporate income tax credits to corporations that participate

  4  in the program.

  5         (3)  AUTHORIZATION TO GRANT HISTORIC BUILDINGS

  6  INVESTMENT TAX CREDITS; LIMITATIONS.--

  7         (a)  A credit shall be allowed to a corporate taxpayer

  8  against any tax due for a taxable year under this chapter in

  9  an amount equal to 50 percent of the costs of substantial

10  rehabilitation and preservation of a historic building that is

11  to be used for commercial purposes during the year following

12  the completion of the project.

13         (b)  No taxpayer shall be eligible to receive more than

14  $200,000 in tax credits for a rehabilitation project approved

15  pursuant to this section.

16         (c)  The total amount of tax credits which may be

17  granted for all projects approved under this section is $1

18  million annually.

19         (d)  All proposals for the granting of tax credits

20  pursuant to this section shall require the prior approval of

21  the Department of State.

22         (e)  Any corporate tax return which is required to be

23  filed under this chapter for any period within 1 year after

24  the date of completion shall include a certification by the

25  corporate taxpayer stating the period during such taxable year

26  that the historic property was used for a commercial purpose.

27  The amount of the approved credit that may be claimed for such

28  taxable year shall be computed based on the percentage such

29  period of commercial use occurred within the 12-month period

30  following the date of completion.

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  1         (f)  If the tax credit granted pursuant to this section

  2  is not fully used in any one year because of insufficient tax

  3  liability on the part of the taxpayer, the unused portion may

  4  be carried forward for a period not to exceed 5 years.  The

  5  carryover credit may be used in a subsequent year when the tax

  6  imposed by this chapter for such year exceeds the credit for

  7  such year under this section after applying the other credits

  8  and unused credit carryovers in the order provided in s.

  9  220.02(10).

10         (g)  No expenditure prior to January 1, 1999, shall

11  count as a qualified rehabilitation expenditure, which is

12  defined as any amount properly chargeable to capital accounts

13  in connection with the rehabilitation of a qualified historic

14  building.

15         (h)  It shall be the responsibility of the taxpayer to

16  affirmatively demonstrate to the satisfaction of the

17  Department of Revenue that it meets the requirements of this

18  section.

19         (4)  ELIGIBILITY.--

20         (a)  Any project undertaken pursuant to this section

21  must be used for a commercial purpose.

22         (b)  A historic building qualifies for this program if

23  the property at the time the exemption is granted:

24         1.  Is listed in the National Register of Historic

25  Places pursuant to the National Historic Preservation Act of

26  1966, as amended;

27         2.  Is a contributing property to a National Register

28  Historic District; or

29         3.  Is designated as a historic property, or as a

30  contributing property to a historic district, under the terms

31  of a local preservation ordinance.

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  1         (c)  In order for an improvement to a historic property

  2  to qualify the property for exemption, the improvement must:

  3         1.  Be consistent with the United States Secretary of

  4  the Interior's Standards for Rehabilitation.

  5         2.  Be a substantial rehabilitation, with qualified

  6  expenditures exceeding the greater of $5,000 or the adjusted

  7  basis of the building.  The adjusted basis is the actual cost

  8  of the property minus the cost of the land, plus any capital

  9  improvement already made, minus any depreciation already

10  taken.  The Department of Revenue shall determine whether or

11  not an improvement qualifies as a substantial rehabilitation.

12         3.  Be completed within a 24-month period following

13  approval of written architectural plans and specifications.

14         4.  Be determined by the Division of Historical

15  Resources to meet criteria established in rules adopted by the

16  Department of State.

17         (5)  APPLICATION.--Proposals to participate in the

18  program established by this section must be submitted to the

19  Division of Historical Resources of the Department of State in

20  accordance with rules prescribed by the Department of State.

21  A proposal must contain a resolution from the local

22  governmental unit in which the property is located certifying

23  that the proposal is consistent with local plans and

24  regulations.

25         (6)  ADMINISTRATION.--

26         (a)  The Department of State is authorized to

27  promulgate all rules necessary to administer this section,

28  including rules for the approval or disapproval of proposals.

29         (b)  The decision of the Secretary of State shall be in

30  writing, and, if approved, the proposal shall state the amount

31  of credit allowed to the business firm.  A copy of the

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  1  decision shall be transmitted to the executive director of the

  2  Department of Revenue, who shall apply such credit to the tax

  3  liability of the taxpayer.

  4         (c)  The Division of Historical Resources shall

  5  periodically monitor all projects in a manner consistent with

  6  available resources to ensure that resources are utilized in

  7  accordance with this section; however, each project shall be

  8  reviewed upon the completion of rehabilitation.

  9         (d)  The Department of Revenue shall promulgate any

10  rules necessary to ensure the orderly implementation and

11  administration of this section.

12         Section 2.  Subsection (10) of section 220.02, Florida

13  Statutes, is amended to read:

14         220.02  Legislative intent.--

15         (10)  It is the intent of the Legislature that credits

16  against either the corporate income tax or the franchise tax

17  be applied in the following order: those enumerated in s.

18  220.68, those enumerated in s. 631.719(1), those enumerated in

19  s. 631.705, those enumerated in s. 220.18, those enumerated in

20  s. 631.828, those enumerated in s. 220.181, those enumerated

21  in s. 220.183, those enumerated in s. 220.182, those

22  enumerated in s. 220.1895, those enumerated in s. 221.02,

23  those enumerated in s. 220.184, those enumerated in s.

24  220.186, and those enumerated in s. 220.188, and those

25  enumerated in s. 220.185.

26         Section 3.  Paragraph (a) of subsection (1) of section

27  220.13, Florida Statutes, is amended to read:

28         220.13  "Adjusted federal income" defined.--

29         (1)  The term "adjusted federal income" means an amount

30  equal to the taxpayer's taxable income as defined in

31  subsection (2), or such taxable income of more than one

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    Florida House of Representatives - 1998             CS/HB 1355

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  1  taxpayer as provided in s. 220.131, for the taxable year,

  2  adjusted as follows:

  3         (a)  Additions.--There shall be added to such taxable

  4  income:

  5         1.  The amount of any tax upon or measured by income,

  6  excluding taxes based on gross receipts or revenues, paid or

  7  accrued as a liability to the District of Columbia or any

  8  state of the United States which is deductible from gross

  9  income in the computation of taxable income for the taxable

10  year.

11         2.  The amount of interest which is excluded from

12  taxable income under s. 103(a) of the Internal Revenue Code or

13  any other federal law, less the associated expenses disallowed

14  in the computation of taxable income under s. 265 of the

15  Internal Revenue Code or any other law, excluding 60 percent

16  of any amounts included in alternative minimum taxable income,

17  as defined in s. 55(b)(2) of the Internal Revenue Code, if the

18  taxpayer pays tax under s. 220.11(3).

19         3.  In the case of a regulated investment company or

20  real estate investment trust, an amount equal to the excess of

21  the net long-term capital gain for the taxable year over the

22  amount of the capital gain dividends attributable to the

23  taxable year.

24         4.  That portion of the wages or salaries paid or

25  incurred for the taxable year which is equal to the amount of

26  the credit allowable for the taxable year under s. 220.181.

27  The provisions of this subparagraph shall expire and be void

28  on June 30, 2005.

29         5.  That portion of the ad valorem school taxes paid or

30  incurred for the taxable year which is equal to the amount of

31  the credit allowable for the taxable year under s. 220.182.

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  1  The provisions of this subparagraph shall expire and be void

  2  on June 30, 2005.

  3         6.  The amount of emergency excise tax paid or accrued

  4  as a liability to this state under chapter 221 which tax is

  5  deductible from gross income in the computation of taxable

  6  income for the taxable year.

  7         7.  That portion of assessments to fund a guaranty

  8  association incurred for the taxable year which is equal to

  9  the amount of the credit allowable for the taxable year.

10         8.  In the case of a nonprofit corporation which holds

11  a pari-mutuel permit and which is exempt from federal income

12  tax as a farmers' cooperative, an amount equal to the excess

13  of the gross income attributable to the pari-mutuel operations

14  over the attributable expenses for the taxable year.

15         9.  The amount taken as a credit for the taxable year

16  under s. 220.1895.

17         10.  That portion of the substantial rehabilitation and

18  preservation costs which is paid for the taxable year which is

19  equal to the credit allowable for the taxable year under s.

20  220.185.

21         Section 4.  This act shall take effect January 1, 1999.

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