HB 253 — Relating to taxation; to amend Sections 40-9F-31, 40-9F-33, and 40-9F-38, Code of Alabama 1975; to further provide certain age restrictions for structures to qualify for tax credits; to allow rehabilitation credits to be tied to the year in which the reservation is allocated; to provide for additional rehabilitation credit allocations; to further provide for the membership of the Historic Tax Credit Evaluating Committee and the factors considered by the committee; and to make nonsubstantive, technical revisions to update the existing code language to current style.

HB253 ENGROSSEDENROLLED AY8I77-2AY8I77-3 By Representatives Clarke, Drummond, Chestnut, Gray, Pringle, Simpson, Bracy, Jackson, Blackshear, Clouse, Baker, Wilcox, Hall RFD:

04-Apr-23 2023 Regular Session Page 0 HB253 EngrossedEnrolled 2Enrolled, 4An 6Act, A3 BILL TO BE ENTITLED AN ACT Relating to taxation;

to further provide certain age restrictions for structures to qualify for tax credits;

A property located in Alabama this state which is at least 60 years of age, unless the structure is a historic structure located within the boundaries of a National Monument or Park as declared by the Page 1 HB253 Engrossed United States Congress or the President of the United States, in which case the federal age provisions shall apply, and is certified by the Alabama Historical Commission as being individually listed in the National Register of Historic Places, eligible for listing in the National Register of Page 1 HB253 Enrolled Historic Places, or certified by the commission as contributing to the historic significance of a Registered Historic District.

For applications submitted after June 1, 2023, a property must be 75 years of age.

Any taxpayer filing a State of Alabama income tax return or any entity that is exempt from federal Page 2 HB253 Engrossed income taxation pursuant to Section 501(c) of the Internal Revenue Code26 U.S.C.

Owns owns a leasehold interest in a qualified Page 2 HB253 Enrolled structure for a term of not less than 39 years.

Qualified rehabilitation expenditures do not include the cost of acquisition of the qualified structure, the personal labor by the owner, or any cost associated with the rehabilitation of an outbuilding of Page 3 HB253 Engrossed the qualified structure, unless the outbuilding is certified by the commission to contribute to the historical significance of the qualified structure.

Certified historic Page 3 HB253 Enrolled structures which are certified by the commission as meeting the requirements contained in Section 47(c)(1)(A)(i) and (ii) of the Internal Revenue Code26 U.S.C.

Any district listed in the National Register of Historic Places and any 95 district which is either of the following:

Designated under Alabama or local law as containing criteria which substantially achieves the purpose of preserving and rehabilitating buildings of historic 95 significance to the district.

Rehabilitation of a qualified structure for which the qualified rehabilitation expenditures exceed 50 percent of the owner's original purchase price of the qualified structure or twenty-five thousand dollars ($25,000), whichever is greater." Page 4 HB253 Engrossed "§40-9F-33 (a) The state portion of any tax credit against the tax imposed by Chapter 18 for the taxable year in which the reservation is allocated to a project or the certified Page 4 HB253 Enrolled rehabilitation is placed in service shall be equal to 25 percent of the qualified rehabilitation expenditures for certified historic structures.

Tax credits shall not be claimed prior to Page 5 HB253 Engrossed the taxable year in which the certified rehabilitation is placed in service.

In the event that any Page 5 HB253 Enrolled additional credit is allocated to the taxpayer for a given project, the additional credit must be claimed in the taxable year the additional credit is allocated to the taxpayer.

(2) For the tax years 2023 through 2027, the aggregate Page 6 HB253 Engrossed amount of all tax credits that may be reserved in any one of such years by the commission and certification of rehabilitation plans under Section 40-9F-32(c) shall not exceed forty million dollars ($40,000,000)twenty million Page 6 HB253 Enrolled dollars ($20,000,000), plus any amount of previous reservations of tax credits that were rescinded under Section 40-9F-32(c) during the tax year.

(5) In addition to the limits in subdivision (2), for tax years 2024 through 2027, the commission may utilize an additional amount up to a total of five million dollars ($5,000,000) to reduce the backlog of qualified applications.

Page 7 HB253 EngrossedEnrolled (f) Tax credits granted to a partnership, a limited liability company, S corporations, trusts, or estates, shall be claimed at the entity level and shall not pass through to the partners, members, or owners.

The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be Page 8 HB253 EngrossedEnrolled transferred to each transferee listed on the form.

The department may adopt additional rules as are necessary to permit verification of the ownership of the tax credits, but shall not adopt any rules which unduly restrict or hinder the transfer of the tax credits." "§40-9F-38 (a) There is established the Historic Tax Credit Page 9 HB253 EngrossedEnrolled Evaluating Committee, which shall review qualifying projects, approve credits for projects, and rank projects in the order in which the projects should receive tax credit reservations based on criteria established by the commission.

(9) The Chair of the House Ways and Means Education Page 10 HB253 EngrossedEnrolled Committee or his or her designee.

(2) Included in the information to be required for the evaluation submitted in the application of any project shall be any additional tax credits or state, federal, or local government grants that the applicant expects to utilize for Page 11 HB253 EngrossedEnrolled the construction of the project.

Page 12 HB253 EngrossedEnrolled House________________________________________________ Speaker of Representativesthe ReadHouse forof theRepresentatives first________________________________________________ timePresident and referredPresiding ................04-Apr-23Officer toof the Senate House of Representatives committeeI onhereby Wayscertify andthat Meansthe Educationwithin ReadAct fororiginated thein second time and placedwas ................03-May-23passed onby the calendar:House 09-May-23, as amended.

amendmentJohn ReadTreadwell forClerk theSenate third06-Jun-23 timePassed andHouse passed06-Jun-23 ................09-May-23Concurred asin amendedSenate YeasAmendment 102 Nays 0 Abstains 1 John Treadwell Clerk Page 13