Florida Senate - 2022                                    SB 1310
       By Senator Rodriguez
       39-01155A-22                                          20221310__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Main Street Program and
    3         historic preservation tax credits; creating s.
    4         220.197, F.S.; providing a short title; defining
    5         terms; specifying eligibility requirements for
    6         receiving specified tax credits for taxpayers that
    7         rehabilitate certified historic structures; specifying
    8         requirements for claiming or transferring specified
    9         tax credits; specifying the amount of tax credits;
   10         authorizing the carryforward, sale, and transfer of
   11         tax credits; providing the Department of Revenue audit
   12         and examination powers for specified purposes related
   13         to certified rehabilitation expenses; requiring the
   14         return of forfeited tax credits under certain
   15         circumstances; providing penalties; requiring the
   16         department to provide specified annual reports to the
   17         Legislature; providing duties of the department;
   18         authorizing the department to adopt rules; providing
   19         an effective date.
   21         WHEREAS, historic revitalization creates highly paid local
   22  construction jobs, and
   23         WHEREAS, historic rehabilitation increases the value of
   24  buildings and results in a growing state and local tax base, and
   25         WHEREAS, historic revitalization boosts heritage tourism
   26  and creates thriving downtowns that are attractive to main
   27  street businesses, and
   28         WHEREAS, reusing historic buildings creates affordable
   29  spaces for small business incubation, and
   30         WHEREAS, repurposing historic buildings saves resources and
   31  activates vacant spaces, and
   32         WHEREAS, historic rehabilitation projects leverage
   33  significant private investment, and
   34         WHEREAS, leveraging state tax incentives increases the
   35  effectiveness of federal Historic Preservation Tax Incentives
   36  and the Opportunity Zones Program to encourage the historic
   37  preservation of existing buildings, and
   38         WHEREAS, an increase in rehabilitation activity occurs when
   39  a state incentive is combined with federal Historic Preservation
   40  Tax Incentives, and
   41         WHEREAS, many historic buildings in the state need safety
   42  upgrades and other improvements that require both public and
   43  private investment to return these buildings as assets of their
   44  local communities, NOW, THEREFORE,
   46  Be It Enacted by the Legislature of the State of Florida:
   48         Section 1. Section 220.197, Florida Statutes, is created to
   49  read:
   50         220.197The Main Street Historic Tourism and Revitalization
   51  Act; tax credits; reports.—
   52         (1)SHORT TITLE.—This act may be cited as the “Main Street
   53  Historic Tourism and Revitalization Act.”
   54         (2)DEFINITIONS.—As used in this section, the term:
   55         (a)“Accredited Main Street Program” means an active
   56  Florida Main Street Program or the Orlando Main Streets program,
   57  provided that such program meets the Main Street America
   58  accreditation standards. An Accredited Main Street Program must:
   59         1.Have broad-based community support for the commercial
   60  district revitalization process with strong support from the
   61  public and private sectors.
   62         2.Have a developed vision and mission statement relevant
   63  to community conditions and to Main Street America’s
   64  organizational stage.
   65         3.Have a comprehensive Main Street America work plan.
   66         4.Possess a historic preservation ethic.
   67         5.Have an active board of directors and committees.
   68         6.Have an adequate operating budget.
   69         7.Have a paid professional program manager.
   70         8.Conduct a program of ongoing training for staff and
   71  volunteers.
   72         9.Report key statistics.
   73         10.Be a current member of Main Street America.
   74         (b)“Certified historic structure” means a building and its
   75  structural components as defined in 36 C.F.R. s. 67.2 which is
   76  of a character subject to the allowance for depreciation
   77  provided in s. 167 of the Internal Revenue Code of 1986, as
   78  amended, and which is:
   79         1.Individually listed in the National Register of Historic
   80  Places; or
   81         2.Located within a registered historic district and
   82  certified by the United States Secretary of the Interior as
   83  being of historic significance to the registered historic
   84  district as set forth in 36 C.F.R. s. 67.2.
   85         (c)“Certified rehabilitation” means the rehabilitation of
   86  a certified historic structure that the United States Secretary
   87  of the Interior has certified to the United States Secretary of
   88  the Treasury as being consistent with the historic character of
   89  the certified historic structure and, if applicable, consistent
   90  with the registered historic district in which the certified
   91  historic structure is located as set forth in 36 C.F.R. s. 67.2.
   92         (d)“Division” means the Division of Historical Resources
   93  of the Department of State.
   94         (e)“Florida Main Street Program” means a statewide
   95  historic preservation-based downtown revitalization assistance
   96  program created, maintained, and administered by the division
   97  under s. 267.031(5).
   98         (f)“Local program area” means the specific geographic area
   99  in which an Accredited Main Street Program is conducted as
  100  approved and maintained by the division or in which the Orlando
  101  Main Streets program is conducted.
  102         (g)“Main Street America” means a national network of
  103  grassroots organizations revitalizing historic downtown areas
  104  under the leadership of the National Main Street Center, Inc., a
  105  subsidiary of the National Trust for Historic Preservation.
  106         (h)“National Register of Historic Places” means the list
  107  of historic properties significant in American history,
  108  architecture, archeology, engineering, and culture maintained by
  109  the United States Secretary of the Interior as authorized in 54
  110  U.S.C. s. 3021.
  111         (i)“Orlando Main Streets” means a historic preservation
  112  based district revitalization program administered by the City
  113  of Orlando.
  114         (j)“Qualified expenses” means qualified rehabilitation
  115  expenditures as defined in 26 U.S.C. s. 47(c)(2) and structural
  116  components as defined in 26 C.F.R. s. 1.48-1(e)(2) at the time
  117  of project certification by the United States Secretary of the
  118  Interior and the United States Internal Revenue Service.
  119         (k)“Registered historic district” means a district listed
  120  in the National Register of Historic Places or a district:
  121         1.Designated under general law or local ordinance and
  122  certified by the United States Secretary of the Interior as
  123  containing criteria that will substantially achieve the purposes
  124  of preserving and rehabilitating buildings of historic
  125  significance to the district; and
  126         2.Certified by the United States Secretary of the Interior
  127  as meeting substantially all of the requirements for listing a
  128  district in the National Register of Historic Places.
  129         (3)ELIGIBILITY FOR TAX CREDIT.—To claim and receive a tax
  130  credit under this section, a taxpayer must first apply to the
  131  department for a tax credit for qualified expenses in the amount
  132  and under the conditions and limitations provided in this
  133  section against the tax due for a taxable year under this
  134  chapter and must document that:
  135         (a)The rehabilitation is a certified rehabilitation.
  136         (b)The structure is a certified historic structure, is
  137  income-producing, is located within the state, and was
  138  rehabilitated and placed into service on or after July 1, 2022.
  139         (c)The taxpayer had an ownership interest in the certified
  140  historic structure in the year during which the certified
  141  historic structure was placed into service after the certified
  142  rehabilitation was completed.
  143         (d)The total amount of qualified expenses incurred in
  144  rehabilitating the certified historic structure exceeded $5,000.
  145         (4)TAX CREDIT FILING REQUIREMENTS.—Before claiming or
  146  transferring a tax credit under this section, the taxpayer must
  147  provide the department with the following information:
  148         (a)An official certificate of eligibility from the
  149  division signed by the State Historic Preservation Officer or
  150  the Deputy State Historic Preservation Officer attesting that
  151  the project has been approved by the National Park Service and
  152  confirming whether the project is or is not located within a
  153  Main Street local program area.
  154         (b)National Park Service Form 10-168c (Rev. 2019), titled
  155  “Historic Preservation Certification Application–Part 3-Request
  156  for Certification of Completed Work,” signed by the National
  157  Park Service attesting that the completed rehabilitation meets
  158  the United States Secretary of the Interior’s Standards for
  159  Rehabilitation and is consistent with the historic character of
  160  the property and, if applicable, the district in which the
  161  completed rehabilitation is located. The form may be obtained
  162  through the National Park Service.
  163         (c)An identification of the dates during which the
  164  certified historic structure was rehabilitated, the date the
  165  certified historic structure was first placed into service after
  166  the certified rehabilitation was completed, and evidence that
  167  the certified historic structure was placed into service after
  168  the certified rehabilitation was completed.
  169         (d)A list of total qualified expenses incurred by the
  170  taxpayer in rehabilitating the certified historic structure. For
  171  certified rehabilitations with qualified expenses that exceeded
  172  $750,000, the taxpayer must submit an audited cost report issued
  173  by a certified public accountant that itemizes the qualified
  174  expenses incurred in rehabilitating the certified historic
  175  structure as provided in s. 215.97.
  176         (e)An attestation of the total qualified expenses incurred
  177  by the taxpayer in rehabilitating the certified historic
  178  structure.
  179         (f)A completed Form F-1120, titled “Florida Corporate
  180  Income/Franchise Tax Return,” or other appropriate tax form
  181  issued by the department for insurance premium tax reporting.
  182         (g)The information required to be reported by the
  183  department in subsection (9) to enable the department to compile
  184  its annual report.
  185         (5)AMOUNT OF TAX CREDIT.—The total tax credit claimed
  186  annually may not exceed the amount of tax due after any other
  187  applicable tax credits and may not exceed the following:
  188         (a) Twenty percent of the total qualified expenses incurred
  189  in rehabilitating a certified historic structure that has been
  190  approved by the National Park Service to receive the federal
  191  historic rehabilitation tax credit; or
  192         (b) Thirty percent of the total qualified expenses incurred
  193  in rehabilitating a certified historic structure that has been
  194  approved by the National Park Service to receive the federal
  195  historic rehabilitation tax credit and that is located within a
  196  local program area of an Accredited Main Street Program.
  198  The tax credit may be used to offset the corporate income tax
  199  imposed in s. 220.11 and the insurance premium tax imposed in s.
  200  624.509.
  201         (6) CARRYFORWARD OF TAX CREDIT.—
  202         (a) If a taxpayer is eligible for a tax credit that exceeds
  203  taxes owed, the taxpayer may carry the unused tax credit forward
  204  for a period of up to 10 years.
  205         (b) A carryforward is considered the remaining portion of a
  206  tax credit that cannot be claimed in the current tax year.
  207         (7) SALE OR TRANSFER OF TAX CREDIT.—
  208         (a) A taxpayer that incurs qualified expenses may sell or
  209  transfer all or part of the tax credit that may otherwise be
  210  claimed to another taxpayer.
  211         (b) A taxpayer to which all or part of the tax credit is
  212  sold or transferred may sell or transfer all or part of the tax
  213  credit that may otherwise be claimed to another taxpayer.
  214         (c) A taxpayer that sells or transfers a tax credit to
  215  another taxpayer must provide a copy of the certificate of
  216  eligibility together with the audited cost report to the
  217  purchaser or transferee.
  218         (d) Qualified expenses may only be counted once in
  219  determining the amount of an available tax credit, and more than
  220  one taxpayer may not claim a tax credit for the same qualified
  221  expenses.
  222         (e) There is no limit on the total number of transactions
  223  for the sale or transfer of all or part of a tax credit.
  224         (f)1. A taxpayer that sells or transfers a tax credit under
  225  this subsection and the purchaser or transferee shall jointly
  226  submit written notice of the sale or transfer to the department
  227  on a form adopted by the department no later than the 30th day
  228  after the date of the sale or transfer. The notice must include
  229  all of the following:
  230         a. The date of the sale or transfer.
  231         b. The amount of the tax credit sold or transferred.
  232         c. The name and federal tax identification number of the
  233  taxpayer that sold or transferred the tax credit and the
  234  purchaser or transferee.
  235         d. The amount of the tax credit owed by the taxpayer before
  236  the sale or transfer and the amount the selling or transferring
  237  taxpayer retained, if any, after the sale or transfer.
  238         2. The sale or transfer of a tax credit under this
  239  subsection does not extend the period for which a tax credit may
  240  be carried forward and does not increase the total amount of the
  241  tax credit that may be claimed.
  242         3. If a taxpayer claims a tax credit for qualified
  243  expenses, another taxpayer may not use the same expenses as the
  244  basis for claiming a tax credit.
  245         4. Notwithstanding the requirements of this subsection, a
  246  tax credit earned by, purchased by, or transferred to a
  247  partnership, limited liability company, S corporation, or other
  248  pass-through taxpayer may be allocated to the partners, members,
  249  or shareholders of that taxpayer and claimed under this section
  250  in accordance with any agreement among the partners, members, or
  251  shareholders and without regard to the ownership interest of the
  252  partners, members, or shareholders in the rehabilitated
  253  certified historic structure.
  254         (g) If the tax credit is reduced due to a determination,
  255  examination, or audit by the department, the tax deficiency
  256  shall be recovered from the taxpayer that sold or transferred
  257  the tax credit or the purchaser or transferee that claimed the
  258  tax credit up to the amount of the tax credit taken.
  259         (h) Any subsequent deficiencies shall be assessed against
  260  the purchaser or transferee that claimed the tax credit or, in
  261  the case of multiple succeeding entities, in the order of tax
  262  credit succession.
  265         (a) The department may perform any additional financial and
  266  technical audits and examinations, including examining the
  267  accounts, books, or records of the tax credit applicant, to
  268  verify the legitimacy of the qualified expenses included in a
  269  tax credit return and to ensure compliance with this section.
  270         (b) It is grounds for forfeiture of previously claimed and
  271  received tax credits if the department determines, as a result
  272  of an audit or information received from the division or the
  273  United States Department of the Interior, that a taxpayer
  274  received a tax credit pursuant to this section to which the
  275  taxpayer was not entitled. In the case of fraud, the taxpayer
  276  may not claim any future tax credits under this section.
  277         (c) The taxpayer must return forfeited tax credits to the
  278  department and such funds shall be paid into the General Revenue
  279  Fund.
  280         (d) The taxpayer shall file with the department an amended
  281  tax return or such other report as the department prescribes and
  282  shall pay any required tax within 60 days after the taxpayer
  283  receives notification from the United States Internal Revenue
  284  Service that a previously approved tax credit has been revoked
  285  or modified, if uncontested, or within 60 days after a final
  286  order is issued following proceedings involving a contested
  287  revocation or modification order.
  288         (e) A notice of deficiency may be issued by the department
  289  at any time within 5 years after the date on which the taxpayer
  290  receives notification from the United States Internal Revenue
  291  Service that a previously approved tax credit has been revoked
  292  or modified.
  293         (f) If a taxpayer fails to notify the department of any
  294  change in its tax credit claimed, a notice of deficiency may be
  295  issued at any time. In either case, the amount of any proposed
  296  assessment set forth in such notice of deficiency is limited to
  297  the amount of any deficiency resulting under this section from
  298  the precomputation of the taxpayer’s tax for the taxable year.
  299         (g) A taxpayer that fails to report and timely pay any tax
  300  due as a result of the forfeiture of its tax credit violates
  301  this section and is subject to applicable penalties and
  302  interest.
  303         (9) ANNUAL REPORTS.—Each year, based on the applications
  304  submitted and approved, the department must issue a report to
  305  the President of the Senate and the Speaker of the House of
  306  Representatives that identifies, in the aggregate, all of the
  307  following:
  308         (a) The number of employees hired during construction
  309  phases.
  310         (b) The use of each newly rehabilitated building and the
  311  expected number of employees hired.
  312         (c) The number of affordable housing units created or
  313  preserved.
  314         (d) The property values before and after the certified
  315  rehabilitations.
  316         (10) DEPARTMENT DUTIES.—The department shall:
  317         (a) Establish any necessary forms required to claim a tax
  318  credit under this section.
  319         (b) Provide administrative guidelines and procedures
  320  required to administer this section, including rules
  321  establishing an entitlement to and sale or transfer of a tax
  322  credit under this section.
  323         (c) Provide examination and audit procedures required to
  324  administer this section.
  325         (11) RULES.—The department may adopt rules to administer
  326  this section.
  327         Section 2. This act shall take effect July 1, 2022.