GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	1 

SENATE BILL 817*

Short Title:  Reinvestment Tax Credits.	(Public)
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Sponsors: Senators Shaw of Cumberland; Ballantine, Blust, Carpenter, Jordan, Kincaid, Lucas, Martin of Guilford, Shaw of Guilford, and Weinstein.
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Referred to:  Finance.
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April 14, 1997

A BILL TO BE ENTITLED
AN ACT TO ALLOW AN INCOME TAX CREDIT FOR EXPENDITURES TO REHABILITATE HISTORIC STRUCTURES AND BUILDINGS THAT WERE BUILT BEFORE 1936.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-130.42 reads as rewritten:
"§ 105-130.42.  Credit for rehabilitating an historic structure.
(a)	Income-Producing Historic Structure. –A taxpayer who is allowed a credit against federal income tax under section 47(a)(2) of the Code with respect to a certified historic structure located in this State is allowed a credit against the tax imposed by this Division.  For the purposes of this subsection, the term 'qualifying rehabilitation expenditure' has the same meaning as defined in section 47 of the Code.
(b)	Nonincome-Producing Historic Structure. – A taxpayer who makes qualifying rehabilitation expenditures with respect to a certified historic structure located in this State is allowed a credit against the tax imposed by this Division.  To claim the credit allowed by this subsection, the taxpayer must attach to the return a copy of the certification obtained from the State Historic Preservation Officer verifying that the historic structure has been rehabilitated in accordance with this subsection.  The following definitions apply in this subsection:
(1)	Certified historic structure. – A structure that is individually listed in the National Register of Historic Places or is certified by the State Historic Preservation Officer as contributing to the historic significance of a National Register Historic District or a locally designated historic district certified by the United States Department of the Interior.
(2)	Certified rehabilitation. – Repairs or alterations consistent with the Secretary of the Interior's Standards for Rehabilitation and certified as such  by the State Historic Preservation Officer prior to the commencement of the work.  The expenditures must, within a 24-month period, exceed ten thousand dollars ($10,000).  The North Carolina Historical Commission, in consultation with the State Historic Preservation Officer, may adopt rules needed to administer the certification process.
(3)	Qualifying rehabilitation expenditures. – Expenses incurred in the certified rehabilitation of a certified historic structure and added to the property's basis.  The term does not include the cost of acquiring the property, the cost attributable to the enlargement of an existing building, the cost of sitework expenditures, or the cost of personal property.
(4)	State Historic Preservation Officer. – The Director of the Division of Archives and History or the Director's designee who acts to administer the historic preservation programs within the State.
(c)	Credit. – The amount of the credit allowed is equal to thirty percent (30%) of the qualifying rehabilitation expenditures.  The entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service.  Any unused portion of the credit may be carried forward for the succeeding five years.  The credit allowed under this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed under this Division, except payments of tax made by or on behalf of the taxpayer."
Section 2.  Division I of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-130.43.  Credit for rehabilitating a preexisting nonhistoric income-producing building.
A taxpayer who is allowed a credit against federal income tax under section 47(a)(1) of the Code with respect to a building located in this State is allowed a credit against the tax imposed by this Division.  The amount of credit allowed is equal to twenty-five percent (25%) of the qualified rehabilitation expenditures.  The term 'qualified rehabilitation expenditures' has the same meaning as defined in section 47 of the Code.
The entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service.  Any unused portion of the credit may be carried forward for the succeeding five years.  The credit allowed under this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed under this Division, except payments of tax made by or on behalf of the taxpayer."
Section 3.  G.S. 105-151.23 reads as rewritten:
"§ 105-151.23.  Credit for rehabilitating an historic structure.
(a)	Income-Producing Historic Structure. –A taxpayer who is allowed a credit against federal income tax under section 47(a)(2) of the Code with respect to a certified historic structure located in this State is allowed a credit against the tax imposed by this Division.  For the purposes of this subsection, the term 'qualifying rehabilitation expenditure' has the same meaning as defined in section 47 of the Code.
(b)	Nonincome-Producing Historic Structure. – A taxpayer who makes qualifying rehabilitation expenditures with respect to a certified historic structure located in this State is allowed a credit against the tax imposed by this Division.  To claim the credit allowed by this subsection, the taxpayer must attach to the return a copy of the certification obtained from the State Historic Preservation Officer verifying that the historic structure has been rehabilitated in accordance with this subsection.  The following definitions apply in this subsection:
(1)	Certified historic structure. – A structure that is individually listed in the National Register of Historic Places or is certified by the State Historic Preservation Officer as contributing to the historic significance of a National Register Historic District or a locally designated historic district certified by the United States Department of the Interior.
(2)	Certified rehabilitation. – Repairs or alterations consistent with the Secretary of the Interior's Standards for Rehabilitation and certified as such  by the State Historic Preservation Officer prior to the commencement of the work.  The expenditures must, within a 24-month period, exceed ten thousand dollars ($10,000).  The North Carolina Historical Commission, in consultation with the State Historic Preservation Officer, may adopt rules needed to administer the certification process.
(3)	Qualifying rehabilitation expenditures. – Expenses incurred in the certified rehabilitation of a certified historic structure and added to the property's basis.  The term does not include the cost of acquiring the property, the cost attributable to the enlargement of an existing building, the cost of sitework expenditures, or the cost of personal property.
(4)	State Historic Preservation Officer. – The Director of the Division of Archives and History or the Director's designee who acts to administer the historic preservation programs within the State.
(c)	Credit. – The amount of the credit allowed is equal to thirty percent (30%) of the qualifying rehabilitation expenditures.  The entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service.  Any unused portion of the credit may be carried forward for the succeeding five years.  The credit allowed under this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed under this Division, except payments of tax made by or on behalf of the taxpayer."
Section 4.  Division II of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section
to read: 
"§ 105-151.23A.  Credit for rehabilitating a preexisting nonhistoric income-producing building.
A taxpayer who is allowed a credit against federal income tax under section 47(a)(1) of the Code with respect to a building located in this State is allowed a credit against the tax imposed by this Division.  The amount of credit allowed is equal to twenty-five percent (25%) of the qualified rehabilitation expenditures.  The term 'qualified rehabilitation expenditures' has the same meaning as defined in section 47 of the Code.
The entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service.  Any unused portion of the credit may be carried forward for the succeeding five years.  The credit allowed under this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed under this Division, except payments of tax made by or on behalf of the taxpayer."
Section 5.  This act is effective for taxable years beginning on or after January 1, 1998.