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. 20 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, 45 46 Be It Enacted by the Legislature of the State of Florida: 47 48 Section 1. Section 220.197, Florida Statutes, is created to 49 read: 50 220.197 The 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. 197 198 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. 263 (8) AUDIT AUTHORITY; REVOCATION AND FORFEITURE OF TAX 264 CREDITS; FRAUDULENT CLAIMS.— 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.