As Introduced

127th General Assembly
Regular Session
2007-2008
H. B. No. 455


Representatives Ujvagi, Gardner 

Cosponsors: Representatives Huffman, Hagan, R., McGregor, J., Yuko, Brown, Lundy, Szollosi, Barrett 

A BILL
To amend sections 149.311, 5725.151, 5733.47, and 1
5747.76 and to enact section 5703.75 of the 2
Revised Code to authorize a county that is issued 3
a historic building rehabilitation tax credit 4
certificate to assign the certificate to another 5
person. 6


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 149.311, 5725.151, 5733.47, and 7
5747.76 be amended and section 5703.75 of the Revised Code be 8
enacted to read as follows:9

       Sec. 149.311.  (A) As used in this section:10

       (1) "Historic building" means a building, including its 11
structural components, that is located in this state and that is 12
either individually listed on the national register of historic 13
places under 16 U.S.C. 470a, located in a registered historic 14
district, and certified by the state historic preservation officer 15
as being of historic significance to the district, or is 16
individually listed as a historic landmark designated by a local 17
government certified under 16 U.S.C. 470a(c).18

       (2) "Qualified rehabilitation expenditures" means 19
expenditures paid or incurred during the rehabilitation period, 20
and before and after that period as determined under 26 U.S.C. 47, 21
by an owner of a historic building to rehabilitate the building. 22
"Qualified rehabilitation expenditures" includes architectural or 23
engineering fees paid or incurred in connection with the 24
rehabilitation, and expenses incurred in the preparation of 25
nomination forms for listing on the national register of historic 26
places. "Qualified rehabilitation expenditures" does not include 27
any of the following:28

       (a) The cost of acquiring, expanding, or enlarging a historic 29
building;30

       (b) Expenditures attributable to work done to facilities 31
related to the building, such as parking lots, sidewalks, and 32
landscaping;33

       (c) New building construction costs.34

       (3) "Owner" of a historic building means a person holding, 35
including a board of county commissioners, that holds the fee 36
simple interest in the building.37

       (4) "Certificate owner" means the owner of a historic 38
building to which a rehabilitation tax credit certificate was 39
issued under this section or an assignee of the certificate 40
registered with the tax commissioner under section 5703.75 of the 41
Revised Code.42

       (5) "Registered historic district" means a historic district 43
listed in the national register of historic places under 16 U.S.C. 44
470a, a historic district designated by a local government 45
certified under 16 U.S.C. 470a(c), or a local historic district 46
certified under 36 C.F.R. 67.8 and 67.9.47

       (6) "Rehabilitation" means the process of repairing or 48
altering a historic building or buildings, making possible an 49
efficient use while preserving those portions and features of the 50
building and its site and environment that are significant to its 51
historic, architectural, and cultural values.52

       (7) "Rehabilitation period" means one of the following:53

       (a) If the rehabilitation initially was not planned to be 54
completed in stages, a period chosen by the owner not to exceed 55
twenty-four months during which rehabilitation occurs;56

       (b) If the rehabilitation initially was planned to be 57
completed in stages, a period chosen by the owner not to exceed 58
sixty months during which rehabilitation occurs.59

       (8) "State historic preservation officer" or "officer" means 60
the state historic preservation officer appointed by the governor 61
under 16 U.S.C. 470a.62

       (9) "Application period" means either of the following time 63
periods during which an application for a rehabilitation tax 64
credit certificate may be filed under this section:65

       (a) July 1, 2007, through June 30, 2008;66

       (b) July 1, 2008, through June 30, 2009.67

       (B) On or after July 1, 2007, but before July 1, 2009, the 68
owner of a historic building may apply to the state historic 69
preservation officer for a rehabilitation tax credit certificate 70
for qualified rehabilitation expenditures paid or incurred after 71
April 4, 2007, for rehabilitation of a historic building. The 72
form and manner of filing such applications shall be prescribed 73
by rule of the director of development, and applications expire 74
at the end of each application period. Before July 1, 2007, the 75
director, after consultation with the tax commissioner and in 76
accordance with Chapter 119. of the Revised Code, shall adopt 77
rules that establish all of the following:78

        (1) Forms and procedures by which applicants may apply for 79
rehabilitation tax credit certificates;80

        (2) Criteria for reviewing, evaluating, and approving 81
applications for certificates within the limitation on the number 82
of applications that may be approved in an application period 83
under division (D) of this section, criteria for assuring that the 84
certificates issued encompass a mixture of high and low qualified 85
rehabilitation expenditures, and criteria for issuing certificates 86
under division (C)(3)(b) of this section;87

        (3) Eligibility requirements for obtaining a certificate 88
under this section;89

        (4) The form of rehabilitation tax credit certificates, each 90
one of which shall bear a unique registration number;91

        (5) Reporting requirements and monitoring procedures;92

        (6) Any other rules necessary to implement and administer 93
this section.94

       (C) The state historic preservation officer shall accept 95
applications in the order in which they are filed. Within seven 96
days after an application is filed, the officer shall forward it 97
to the director of development who shall review the application 98
and determine whether all of the following criteria are met:99

       (1) That the building that is the subject of the application 100
is a historic building and the applicant is the owner of the 101
building;102

       (2) That the rehabilitation will satisfy standards prescribed 103
by the United States secretary of the interior under 16 U.S.C. 104
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to 105
that section;106

       (3) That receiving a rehabilitation tax credit certificate 107
under this section is a major factor in the applicant's decision 108
to do either of the following:109

       (a) The applicant's decision to rehabilitateRehabilitate the 110
historic building; or111

       (b) To increaseIncrease the level of investment in such 112
rehabilitation.113

       An applicant shall demonstrate to the satisfaction of the 114
state historic preservation officer and director of development 115
that the rehabilitation will satisfy the standards described in 116
division (C)(2) of this section before the applicant begins the 117
physical rehabilitation of the historic building.118

       (D) If(1) Except as provided in division (D)(2) of this 119
section, if the director of development determines that the 120
criteria in divisions (C)(1), (2), and (3) of this section are 121
met, the director, in conjunction with the tax commissioner, shall 122
conduct a cost and benefit analysis for the historic building that 123
is the subject of an application filed under this section to 124
determine whether rehabilitation of the historic building, 125
including activities during the construction phase of the 126
rehabilitation, will result in a net revenue gain in state and 127
local taxes. The director shall not approve an application and 128
issue a rehabilitation tax credit certificate to an applicant 129
unless the cost and benefit analysis of the historic building 130
determines that there will be a net revenue gain in state and 131
local taxes once the building is used. A132

       (2) The director shall not conduct a cost and benefit 133
analysis for a historic building that is the subject of an 134
application filed by a board of county commissioners under this 135
section, but the board's application must meet the criteria in 136
divisions (C)(1), (2), and (3) of this section.137

        (3) A rehabilitation tax credit certificate shall not be 138
issued before rehabilitation of a historic building is 139
completed. The director shall not approve more than one hundred 140
applications in an application period, and may not approve more 141
than a total of five applications filed by boards of county 142
commissioners in an application period.143

        (E) Issuance of a certificate represents a finding by the 144
director of development of the matters described in divisions 145
(C)(1), (2), and (3) of this section only; issuance of a 146
certificate does not represent a verification or certification by 147
the director of the amount of qualified rehabilitation 148
expenditures for which a tax credit may be claimed under section 149
5725.151, 5733.47, or 5747.76 of the Revised Code. The amount of 150
qualified rehabilitation expenditures for which a tax credit may 151
be claimed is subject to inspection and examination by the tax 152
commissioner or employees of the commissioner under section 153
5703.19 of the Revised Code and any other applicable law. Upon the 154
issuance of a certificate, the director shall certify to the tax 155
commissioner, in the form and manner requested by the tax 156
commissioner, the name of the applicant, the amount of qualified 157
rehabilitation expenditures shown on the certificate, the 158
registration number of the certificate, and any other information 159
required by the rules adopted under this section.160

       (F) A board of county commissioners to which a rehabilitation 161
tax credit certificate is issued under this section may assign the 162
certificate to any other person for such consideration as is 163
mutually agreeable. Upon assignment, the assignee shall register 164
with the tax commissioner as the certificate owner. A tax credit 165
may not be claimed under section 5725.151, 5733.47, or 5747.76 of 166
the Revised Code by a person who is not the certificate owner. A 167
certificate owner may not assign a certificate after claiming a 168
credit under any of those sections.169

        (G)(1) On or before the first day of December in 2007, 2008, 170
and 2009, the director of development and tax commissioner jointly 171
shall submit to the president of the senate and the speaker of the 172
house of representatives a report on the tax credit program 173
established under this section and sections 5725.151, 5733.47, and 174
5747.76 of the Revised Code. The report shall present an overview 175
of the program and shall include information on the number of 176
rehabilitation tax credit certificates issued under this section 177
during an application period, an update on the status of each 178
historic building for which an application was approved under this 179
section, the dollar amount of the tax credits granted under 180
sections 5725.151, 5733.47, and 5747.76 of the Revised Code, and 181
any other information the director and commissioner consider 182
relevant to the topics addressed in the report.183

        (2) On or before December 1, 2010, the director of 184
development and tax commissioner jointly shall submit to the 185
president of the senate and the speaker of the house of 186
representatives a comprehensive report that includes the 187
information required by division (F)(G)(1) of this section and a 188
detailed analysis of the effectiveness of issuing tax credits for 189
rehabilitating historic buildings. The report shall be prepared 190
with the assistance of an economic research organization jointly 191
chosen by the director and commissioner.192

       Sec. 5703.75. For the purpose of sections 5725.151, 5733.47, 193
and 5747.76 of the Revised Code, the tax commissioner shall 194
compile and maintain a register of rehabilitation tax credit 195
certificates that are issued under section 149.311 of the Revised 196
Code and assigned under that section to another person by a board 197
of county commissioners. The register shall record, according to 198
the registration number of each certificate so issued and 199
assigned, the name of the board of county commissioners to which 200
the certificate was issued, the name of the person to which the 201
certificate was assigned, and the dollar amount of qualified 202
rehabilitation expenditures shown on the certificate.203

       Sec. 5725.151.  (A) As used in this section, "certificate 204
owner" has the same meaning as in section 149.311 of the Revised 205
Code.206

       (B) There is allowed a refundable credit against the tax 207
imposed by section 5707.03 and assessed under section 5725.15 of 208
the Revised Code for a dealer in intangibles subject to that tax 209
that is a certificate owner of a rehabilitation tax credit 210
certificate issued under section 149.311 of the Revised Code. The 211
credit shall equal twenty-five per cent of the dollar amount 212
indicated on the certificate, but in no case shall the credit 213
exceed two million dollars if the certificate owner is an assignee 214
of a board of county commissioners. The credit shall be claimed in 215
the calendar year specified in the certificate.216

       (C) A dealer in intangibles claiming a credit under this 217
section shall retain the rehabilitation tax credit certificate for 218
four years following the end of the year in which the credit was 219
claimed, and shall make the certificate available for inspection 220
by the tax commissioner upon the request of the tax commissioner 221
during that period.222

       (D) For the purpose of division (C) of section 5725.24 of the 223
Revised Code, reductions in the amount of taxes collected on 224
account of credits allowed under this section shall be applied to 225
reduce the amount credited to the general revenue fund and shall 226
not be applied to reduce the amount to be credited to the 227
undivided local government funds of the counties in which such 228
taxes originate.229

       Sec. 5733.47. (A) As used in this section, "certificate 230
owner" has the same meaning as in section 149.311 of the Revised 231
Code.232

       (B) There is allowed a refundable credit against the tax 233
imposed under section 5733.06 of the Revised Code for a taxpayer 234
that is a certificate owner of a rehabilitation tax credit 235
certificate issued under section 149.311 of the Revised Code. The 236
credit shall equal twenty-five per cent of the dollar amount 237
indicated on the certificate, but in no case shall the credit 238
exceed two million dollars if the certificate owner is an assignee 239
of a board of county commissioners. The credit shall be claimed 240
for the tax year specified in the certificate and in the order 241
required under section 5733.98 of the Revised Code. For purposes 242
of making tax payments under this chapter, taxes equal to the 243
amount of the refundable credit shall be considered to be paid to 244
the state on the first day of the tax year.245

       (C) A taxpayer claiming a credit under this section shall 246
retain the rehabilitation tax credit certificate for four years 247
following the end of the tax year to which the credit was applied, 248
and shall make the certificate available for inspection by the tax 249
commissioner upon the request of the tax commissioner during that 250
period.251

       (D) If, pursuant to division (G) of section 5733.01 of the 252
Revised Code, a taxpayer no longer pays a tax under this chapter, 253
the taxpayer may nonetheless file an annual report under section 254
5733.02 of the Revised Code and claim the refundable credit 255
authorized by this section. Nothing in this division allows a 256
taxpayer to claim the credit under this section more than once.257

       Sec. 5747.76. (A) As used in this section, "certificate 258
owner" has the same meaning as in section 149.311 of the Revised 259
Code.260

       (B) There is allowed a refundable credit against the tax 261
imposed under section 5747.02 of the Revised Code for a taxpayer 262
that is the certificate owner of a rehabilitation tax credit 263
certificate issued under section 149.311 of the Revised Code. The 264
credit shall equal twenty-five per cent of the dollar amount 265
indicated on the certificate, but in no case shall the credit 266
exceed two million dollars if the certificate owner is an assignee 267
of a board of county commissioners. The credit shall be claimed 268
for the taxable year specified in the certificate and in the order 269
required under section 5747.98 of the Revised Code. For purposes 270
of making tax payments under this chapter, taxes equal to the 271
amount of the refundable credit shall be considered to be paid to 272
the state on the first day of the taxable year.273

       (C) Nothing in this section limits or disallows pass-through 274
treatment of the credit if the certificate owner is a pass-through 275
entity.276

       (D) A taxpayer claiming a credit under this section shall 277
retain the rehabilitation tax credit certificate for four years 278
following the end of the taxable year to which the credit was 279
applied, and shall make the certificate available for inspection 280
by the tax commissioner upon the request of the tax commissioner 281
during that period.282

       Section 2. That existing sections 149.311, 5725.151, 5733.47, 283
and 5747.76 of the Revised Code are hereby repealed.284