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.
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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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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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