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

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

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

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

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

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

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

(c) New building construction costs.

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

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

(5) "Registered historic district" means a historic district listed in the national register of historic places under 16 U.S.C. 470a, a historic district designated by a local government certified under 16 U.S.C. 470a(c), or a local historic district certified under 36 C.F.R. 67.8 and 67.9.

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

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

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

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

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

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

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

(b) July 1, 2008, through June 30, 2009.

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

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

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

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

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

(5) Reporting requirements and monitoring procedures;

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

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

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

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

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

(a) The applicant's decision to rehabilitate Rehabilitate the historic building; or

(b) To increase Increase the level of investment in such rehabilitation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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