The bill amends the Income Tax Act of 1967, specifically section 266a, to establish a framework for tax credits aimed at qualified taxpayers who rehabilitate historic resources. It allows taxpayers with a certificate of completed rehabilitation issued after December 31, 2020, to claim credits based on their qualified expenditures, with varying credit amounts: 25% for large and medium nonresidential resources and 30% for small nonresidential and residential resources. The bill sets a cap on total credits reserved under preapproval letters at $5 million per calendar year until December 31, 2025, increasing to $100 million per year starting January 1, 2026. It also outlines the application process, requiring a rehabilitation plan submission to the state historic preservation office and establishing timeframes for processing applications.

Additionally, the bill introduces provisions for the assignment or reassignment of tax credits, allowing both original assignees and subsequent reassignees to claim credits, with a completed assignment certificate required for tax returns. It permits qualified taxpayers to receive a refund of 90% of the credit amount exceeding their tax liability for projects under $500,000, contingent on the issuance of a certificate of completed rehabilitation for tax years beginning after December 31, 2025. The bill clarifies conditions for adding credits back to a taxpayer's liability if a certificate is revoked or if the historic resource is sold within five years. It also updates the definition of the "State historic preservation office" and stipulates that the enactment of this act is contingent upon the passage of related legislation from the 103rd Legislature.

Statutes affected:
House Introduced Bill: 206.266