HOUSE BILL No. 4669 April 23, 1997, Introduced by Reps. Profit, Palamara, Wallace, Quarles, Brater, Hanley, Cassis and Perricone and referred to the Committee on Tax Policy. A bill to amend 1975 PA 228, entitled "Single business tax act," (MCL 208.1 to 208.145) by adding section 39c. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 SEC. 39C. (1) FOR THE 1997 TAX YEAR AND EACH TAX YEAR AFTER 2 1997, A QUALIFIED TAXPAYER MAY CREDIT AGAINST THE TAX IMPOSED BY 3 THIS ACT THE AMOUNT DETERMINED UNDER SUBSECTION (2) FOR THE QUAL- 4 IFIED EXPENDITURES FOR THE REHABILITATION OF A HISTORIC RESOURCE 5 PURSUANT TO A REHABILITATION PLAN FOR 1 OF THE FOLLOWING TIME 6 PERIODS: 7 (A) THE YEAR IN WHICH THE REHABILITATED HISTORIC RESOURCE IS 8 PLACED IN SERVICE. 9 (B) THE YEAR OR YEARS IN WHICH A FINAL PAYMENT OF QUALIFIED 10 EXPENDITURES IS MADE IF THE PROJECT IS A PHASED PROJECT AND 11 CONSTRUCTION IS PLANNED FOR 2 TO 5 YEARS. 02653'97 RJA 2 1 (2) THE CREDIT ALLOWED UNDER THIS SECTION SHALL BE 25% OF 2 THE QUALIFIED EXPENDITURES SUBJECT TO BOTH OF THE FOLLOWING: 3 (A) A TAXPAYER WITH QUALIFIED EXPENDITURES THAT ARE ELIGIBLE 4 FOR THE CREDIT UNDER SECTION 47 OF THE INTERNAL REVENUE CODE MAY 5 NOT CLAIM A CREDIT UNDER THIS SECTION FOR THOSE QUALIFIED EXPEN- 6 DITURES UNLESS THE TAXPAYER HAS CLAIMED AND RECEIVED A CREDIT FOR 7 THOSE QUALIFIED EXPENDITURES UNDER SECTION 47 OF THE INTERNAL 8 REVENUE CODE. 9 (B) A CREDIT UNDER THIS SECTION SHALL BE REDUCED BY THE 10 AMOUNT OF A CREDIT RECEIVED BY THE TAXPAYER FOR THE SAME QUALI- 11 FIED EXPENDITURES UNDER SECTION 47 OF THE INTERNAL REVENUE CODE 12 IN THE SAME TAX YEAR. 13 (3) TO BE ELIGIBLE FOR THE CREDIT UNDER THIS SECTION, THE 14 TAXPAYER SHALL APPLY TO AND RECEIVE FROM THE BUREAU OF MICHIGAN 15 HISTORY CERTIFICATION THAT THE HISTORIC SIGNIFICANCE, THE REHA- 16 BILITATION PLAN, AND THE COMPLETED REHABILITATION OF THE HISTORIC 17 RESOURCE MEET THE CRITERIA UNDER SUBSECTION (6) AND EITHER OF THE 18 FOLLOWING: 19 (A) ALL OF THE FOLLOWING CRITERIA: 20 (i) THE HISTORIC RESOURCE CONTRIBUTES TO THE SIGNIFICANCE OF 21 THE HISTORIC DISTRICT IN WHICH IT IS LOCATED. 22 (ii) BOTH THE REHABILITATION PLAN AND COMPLETED REHABILITA- 23 TION OF THE HISTORIC RESOURCE MEET THE SECRETARY OF THE 24 INTERIOR'S STANDARDS FOR REHABILITATION AND GUIDELINES FOR REHA- 25 BILITATING HISTORIC BUILDINGS, 36 C.F.R. 67. 02653'97 3 1 (iii) ALL REHABILITATION WORK HAS BEEN DONE TO OR WITHIN THE 2 ENVELOPE OF THE HISTORIC RESOURCE OR TO HISTORIC RESOURCES 3 LOCATED WITHIN THE PROPERTY BOUNDARIES OF THE PROPERTY. 4 (B) THE TAXPAYER HAS RECEIVED CERTIFICATION FROM THE 5 NATIONAL PARK SERVICE THAT THE HISTORIC RESOURCE'S SIGNIFICANCE, 6 THE REHABILITATION PLAN, AND THE COMPLETED REHABILITATION QUALIFY 7 FOR THE FEDERAL INVESTMENT TAX CREDIT. 8 (4) IF THE QUALIFIED TAXPAYER HAS FILED FOR CERTIFICATION 9 WITH THE BUREAU TO QUALIFY FOR THE FEDERAL TAX CREDIT, ADDITIONAL 10 FILING FOR THE CREDIT ALLOWED UNDER THIS SECTION IS NOT 11 REQUIRED. 12 (5) THE BUREAU MAY INSPECT A HISTORIC RESOURCE AT ANY TIME 13 DURING THE REHABILITATION PROCESS AND MAY REVOKE CERTIFICATION IF 14 THE REHABILITATION WAS NOT UNDERTAKEN AS REPRESENTED IN THE REHA- 15 BILITATION PLAN OR IF UNAPPROVED ALTERATIONS TO THE COMPLETED 16 REHABILITATION ARE MADE DURING THE 5 YEARS AFTER THE TAX YEAR IN 17 WHICH THE CREDIT WAS CLAIMED. THE BUREAU SHALL PROMPTLY NOTIFY 18 THE DEPARTMENT OF A REVOCATION. 19 (6) QUALIFIED EXPENDITURES FOR THE REHABILITATION OF A HIS- 20 TORIC RESOURCE MAY BE USED TO CALCULATE THE CREDIT UNDER THIS 21 SECTION IF THE HISTORIC RESOURCE MEETS 1 OF THE CRITERIA LISTED 22 IN SUBDIVISION (A) AND 1 OF THE CRITERIA LISTED IN SUBDIVISION 23 (B): 24 (A) THE RESOURCE IS 1 OF THE FOLLOWING WITHIN 30 MONTHS 25 AFTER THE END OF THE TAX YEAR IN WHICH A CREDIT FOR QUALIFIED 26 EXPENDITURES FOR THE REHABILITATION IS CLAIMED: 02653'97 4 1 (i) INDIVIDUALLY LISTED ON THE NATIONAL REGISTER OF HISTORIC 2 PLACES OR STATE REGISTER OF HISTORIC SITES. 3 (ii) A CONTRIBUTING RESOURCE LOCATED WITHIN A HISTORIC DIS- 4 TRICT LISTED ON THE NATIONAL REGISTER OF HISTORIC PLACES OR THE 5 STATE REGISTER OF HISTORIC SITES. 6 (iii) A CONTRIBUTING RESOURCE LOCATED WITHIN A HISTORIC DIS- 7 TRICT DESIGNATED BY A LOCAL UNIT PURSUANT TO AN ORDINANCE ADOPTED 8 UNDER THE LOCAL HISTORIC DISTRICTS ACT, 1970 PA 169, MCL 399.201 9 TO 399.215. 10 (B) THE RESOURCE MEETS 1 OF THE FOLLOWING CRITERIA WITHIN 30 11 MONTHS AFTER THE END OF THE TAX YEAR IN WHICH A CREDIT FOR QUALI- 12 FIED EXPENDITURES FOR THE REHABILITATION IS CLAIMED: 13 (i) IF THE HISTORIC RESOURCE IS LOCATED IN A LOCAL UNIT OF 14 GOVERNMENT WITH AN EXISTING ORDINANCE UNDER THE LOCAL HISTORIC 15 DISTRICTS ACT, 1970 PA 169, MCL 399.201 TO 399.215, THE RESOURCE 16 SHALL BE LOCATED IN A HISTORIC DISTRICT DESIGNATED UNDER THAT 17 ORDINANCE. 18 (ii) IF THE HISTORIC RESOURCE IS LOCATED IN AN INCORPORATED 19 LOCAL UNIT OF GOVERNMENT THAT DOES NOT HAVE AN ORDINANCE UNDER 20 THE LOCAL HISTORIC DISTRICTS ACT, 1970 PA 169, MCL 399.201 TO 21 399.215, AND HAS A POPULATION OF LESS THAN 5,000, A HISTORIC DES- 22 IGNATION BY THE LOCAL UNIT OF GOVERNMENT IS NOT REQUIRED. 23 (iii) THE HISTORIC RESOURCE IS LOCATED IN AN INCORPORATED 24 LOCAL UNIT OF GOVERNMENT THAT DOES NOT HAVE AN ORDINANCE UNDER 25 THE LOCAL HISTORIC DISTRICTS ACT, 1970 PA 169, MCL 399.201 TO 26 399.215, AND THE POPULATION OF THE LOCAL UNIT OF GOVERNMENT IS 27 5,000 OR MORE, BUT ONLY IF THE RESOURCE IS LOCATED IN A HISTORIC 02653'97 5 1 DISTRICT DESIGNATED UNDER AN ORDINANCE UNDER THE LOCAL HISTORIC 2 DISTRICTS ACT, 1970 PA 169, MCL 399.201 TO 399.215. 3 (iv) IF THE HISTORIC RESOURCE IS LOCATED IN AN UNINCORPOR- 4 ATED LOCAL UNIT OF GOVERNMENT THAT HAS NO ORDINANCE UNDER THE 5 LOCAL HISTORIC DISTRICTS ACT, 1970 PA 169, MCL 399.201 TO 6 399.215, AN ORDINANCE IS NOT REQUIRED. 7 (7) IF THE CREDIT ALLOWED UNDER THIS SECTION FOR THE TAX 8 YEAR AND ANY UNUSED CARRYFORWARD OF THE CREDIT ALLOWED BY THIS 9 SECTION EXCEED THE TAXPAYER'S TAX LIABILITY FOR THE TAX YEAR, 10 THAT PORTION THAT EXCEEDS THE TAX LIABILITY FOR THE TAX YEAR 11 SHALL NOT BE REFUNDED BUT MAY BE CARRIED FORWARD TO OFFSET TAX 12 LIABILITY IN SUBSEQUENT TAX YEARS FOR 10 YEARS OR UNTIL USED UP, 13 WHICHEVER OCCURS FIRST. 14 (8) IF THE TAXPAYER SELLS THE HISTORIC RESOURCE FOR WHICH A 15 CREDIT UNDER THIS SECTION WAS TAKEN LESS THAN 5 YEARS AFTER THE 16 YEAR IN WHICH THE CREDIT WAS CLAIMED, THE FOLLOWING PERCENTAGE OF 17 THE CREDIT SHALL BE ADDED BACK TO THE TAX BASE OF THE TAXPAYER IN 18 THE YEAR OF THE SALE: 19 (A) IF THE SALE IS LESS THAN 1 YEAR AFTER THE YEAR IN WHICH 20 THE CREDIT WAS CLAIMED, 100%. 21 (B) IF THE SALE IS AT LEAST 1 YEAR BUT LESS THAN 2 YEARS 22 AFTER THE YEAR IN WHICH THE CREDIT WAS CLAIMED, 80%. 23 (C) IF THE SALE IS AT LEAST 2 YEARS BUT LESS THAN 3 YEARS 24 AFTER THE YEAR IN WHICH THE CREDIT WAS CLAIMED, 60%. 25 (D) IF THE SALE IS AT LEAST 3 YEARS BUT LESS THAN 4 YEARS 26 AFTER THE YEAR IN WHICH THE CREDIT WAS CLAIMED, 40%. 02653'97 6 1 (E) IF THE SALE IS AT LEAST 4 YEARS BUT LESS THAN 5 YEARS 2 AFTER THE YEAR IN WHICH THE CREDIT WAS CLAIMED, 20%. 3 (F) IF THE SALE IS 5 YEARS OR MORE AFTER THE YEAR IN WHICH 4 THE CREDIT WAS CLAIMED, AN ADDBACK TO THE TAXPAYER'S TAX BASE 5 SHALL NOT BE MADE. 6 (9) THE DEPARTMENT OF STATE THROUGH THE BUREAU OF MICHIGAN 7 HISTORY MAY IMPOSE A FEE TO COVER THE COST OF IMPLEMENTING THE 8 PROGRAM UNDER THIS SECTION. 9 (10) BEFORE JANUARY 1, 1996, THE DEPARTMENT OF STATE SHALL 10 SUBMIT RULES TO IMPLEMENT THIS SECTION FOR PUBLIC HEARING PURSU- 11 ANT TO THE ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, 12 MCL 24.201 TO 24.328. 13 (11) THE TOTAL CREDIT ALLOWABLE UNDER THIS ACT AND SECTION 14 266 OF THE INCOME TAX ACT OF 1967, 1967 PA 281, MCL 206.266, 15 SHALL NOT EXCEED THE TOTAL QUALIFIED EXPENDITURES OF THE TAXPAYER 16 FOR THE TAX YEAR. 17 (12) THE DEPARTMENT OF STATE THROUGH THE BUREAU OF MICHIGAN 18 HISTORY SHALL REPORT ALL OF THE FOLLOWING TO THE LEGISLATURE 19 ANNUALLY FOR THE IMMEDIATELY PRECEDING STATE FISCAL YEAR: 20 (A) THE FEE SCHEDULE USED BY THE BUREAU AND THE TOTAL AMOUNT 21 OF FEES COLLECTED. 22 (B) A DESCRIPTION OF EACH PROJECT CERTIFIED. 23 (C) THE LOCATION OF EACH NEW AND ONGOING PROJECT. 24 (13) AS USED IN THIS SECTION: 25 (A) "BUREAU OF MICHIGAN HISTORY" OR "BUREAU" MEANS THE STATE 26 HISTORIC PRESERVATION OFFICE OF THE BUREAU OF MICHIGAN HISTORY OF 27 THE DEPARTMENT OF STATE OR ITS SUCCESSOR AGENCY. 02653'97 7 1 (B) "HISTORIC RESOURCE" OR "RESOURCE" MEANS A PUBLICLY OR 2 PRIVATELY OWNED HISTORIC BUILDING, STRUCTURE, SITE, OBJECT, FEA- 3 TURE, OR OPEN SPACE LOCATED WITHIN A HISTORIC DISTRICT DESIGNATED 4 BY THE NATIONAL REGISTER OF HISTORIC PLACES, THE STATE REGISTER 5 OF HISTORIC SITES, OR A LOCAL UNIT ACTING UNDER THE LOCAL HIS- 6 TORIC DISTRICTS ACT, 1970 PA 169, MCL 399.201 TO 399.215; OR THAT 7 IS INDIVIDUALLY LISTED ON THE STATE REGISTER OF HISTORIC SITES OR 8 NATIONAL REGISTER OF HISTORIC PLACES AND INCLUDES ALL OF THE 9 FOLLOWING: 10 (i) AN OWNER-OCCUPIED PERSONAL RESIDENCE OR A HISTORIC 11 RESOURCE LOCATED WITHIN THE PROPERTY BOUNDARIES OF THAT PERSONAL 12 RESIDENCE. 13 (ii) AN INCOME-PRODUCING COMMERCIAL, INDUSTRIAL, OR RESIDEN- 14 TIAL RESOURCE OR A HISTORIC RESOURCE LOCATED WITHIN THE PROPERTY 15 BOUNDARIES OF THAT RESOURCE. 16 (iii) A RESOURCE OWNED BY A GOVERNMENTAL BODY, NONPROFIT 17 ORGANIZATION, OR TAX-EXEMPT ENTITY THAT IS USED PRIMARILY BY A 18 TAXPAYER LESSEE IN A TRADE OR BUSINESS UNRELATED TO THE GOVERN- 19 MENTAL BODY, NONPROFIT ORGANIZATION, OR TAX-EXEMPT ENTITY AND 20 THAT IS SUBJECT TO TAX UNDER THIS ACT. 21 (iv) A RESOURCE THAT IS OCCUPIED OR UTILIZED BY A GOVERNMEN- 22 TAL BODY, NONPROFIT ORGANIZATION, OR TAX-EXEMPT ENTITY PURSUANT 23 TO A LONG-TERM LEASE OR LEASE WITH OPTION TO BUY AGREEMENT. 24 (v) ANY OTHER RESOURCE THAT COULD BENEFIT FROM 25 REHABILITATION. 26 (C) "LOCAL UNIT" MEANS A COUNTY, CITY, VILLAGE, OR 27 TOWNSHIP. 02653'97 8 1 (D) "LONG-TERM LEASE" MEANS A LEASE TERM OF AT LEAST 27.5 2 YEARS FOR A RESIDENTIAL RESOURCE OR AT LEAST 31.5 YEARS FOR A 3 NONRESIDENTIAL RESOURCE. 4 (E) "PERSON" MEANS AN INDIVIDUAL, PARTNERSHIP, CORPORATION, 5 ASSOCIATION, GOVERNMENTAL ENTITY, OR OTHER LEGAL ENTITY. 6 (F) "QUALIFIED EXPENDITURES" MEANS CAPITAL EXPENDITURES THAT 7 WERE PAID NOT MORE THAN 5 YEARS AFTER THE INITIAL CERTIFICATION 8 OF THE REHABILITATION PLAN WAS APPROVED BY THE BUREAU, AND THAT 9 WERE PAID AFTER DECEMBER 31, 1996 FOR THE REHABILITATION OF A 10 HISTORIC RESOURCE. QUALIFIED EXPENDITURES DO NOT INCLUDE CAPITAL 11 EXPENDITURES FOR NONHISTORIC ADDITIONS TO A RESOURCE EXCEPT AN 12 ADDITION THAT IS REQUIRED BY STATE OR FEDERAL REGULATIONS THAT 13 RELATE TO HISTORIC PRESERVATION, SAFETY, OR ACCESSIBILITY. 14 (G) "QUALIFIED TAXPAYER" MEANS A PERSON THAT OWNS THE 15 RESOURCE TO BE REHABILITATED OR THAT HAS A LONG-TERM LEASE AGREE- 16 MENT WITH THE OWNER OF THE RESOURCE AND THAT HAS QUALIFIED EXPEN- 17 DITURES FOR THE REHABILITATION OF THE RESOURCE EQUAL TO OR 18 GREATER THAN 10% OF THE STATE EQUALIZED VALUATION OF THE 19 PROPERTY. IF THE HISTORIC RESOURCE TO BE REHABILITATED IS A POR- 20 TION OF A HISTORIC OR NONHISTORIC RESOURCE, THE ASSESSOR FOR THE 21 APPROPRIATE LOCAL TAX ASSESSING UNIT SHALL DETERMINE THE STATE 22 EQUALIZED VALUATION OF ONLY THAT PORTION. IF THE STATE EQUALIZED 23 VALUATION OF THAT PORTION CANNOT BE DETERMINED, QUALIFIED EXPEN- 24 DITURES, FOR PURPOSES OF THIS SUBDIVISION, SHALL BE EQUAL TO OR 25 GREATER THAN 10% OF THE APPRAISED VALUE AS DETERMINED BY A CERTI- 26 FIED APPRAISER. 02653'97 Final page. RJA