Bill Text: MI SB0090 | 2009-2010 | 95th Legislature | Engrossed

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Bill Title: Michigan business tax; other; using historic credit carryforwards to offset recaptured credits; allow. Amends sec. 435 of 2007 PA 36 (MCL 208.1435).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2009-02-05 - Referred To Committee On Tax Policy [SB0090 Detail]

Download: Michigan-2009-SB0090-Engrossed.html

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SB-0090, As Passed Senate, February 5, 2009

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 90

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2007 PA 36, entitled

 

"Michigan business tax act,"

 

by amending section 435 (MCL 208.1435), as amended by 2008 PA 448.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 435. (1) A qualified taxpayer with a rehabilitation plan

 

certified after December 31, 2007 or a qualified taxpayer that has

 

a rehabilitation plan certified before January 1, 2008 under

 

section 39c of former 1975 PA 228 for the rehabilitation of an

 

historic resource for which a certification of completed

 

rehabilitation has been issued after the end of the taxpayer's last

 

tax year may credit against the tax imposed by this act the amount

 

determined pursuant to subsection (2) for the qualified

 

expenditures for the rehabilitation of an historic resource

 

pursuant to the rehabilitation plan in the year in which the

 

certification of completed rehabilitation of the historic resource

 

is issued. Only those expenditures that are paid or incurred during

 

the time periods prescribed for the credit under section 47(a)(2)

 

of the internal revenue code and any related treasury regulations

 

shall be considered qualified expenditures.

 

     (2) The credit allowed under this subsection shall be 25% of

 

the qualified expenditures that are eligible, or would have been

 

eligible except that the taxpayer entered into an agreement under

 

subsection (13), for the credit under section 47(a)(2) of the

 

internal revenue code if the taxpayer is eligible for the credit

 

under section 47(a)(2) of the internal revenue code or, if the

 

taxpayer is not eligible for the credit under section 47(a)(2) of

 

the internal revenue code, 25% of the qualified expenditures that

 

would qualify under section 47(a)(2) of the internal revenue code

 

except that the expenditures are made to an historic resource that

 

is not eligible for the credit under section 47(a)(2) of the

 

internal revenue code, subject to both of the following:

 

     (a) A taxpayer with qualified expenditures that are eligible

 

for the credit under section 47(a)(2) of the internal revenue code

 

may not claim a credit under this section for those qualified

 

expenditures unless the taxpayer has claimed and received a credit

 

for those qualified expenditures under section 47(a)(2) of the

 

internal revenue code or the taxpayer has entered into an agreement

 

under subsection (13).

 

     (b) A credit under this subsection shall be reduced by the

 

amount of a credit received by the taxpayer for the same qualified

 

expenditures under section 47(a)(2) of the internal revenue code.

 

     (3) To be eligible for the credit under subsection (2), the

 

taxpayer shall apply to and receive from the Michigan historical

 

center certification that the historic significance, the

 

rehabilitation plan, and the completed rehabilitation of the

 

historic resource meet the criteria under subsection (6) and either

 

of the following:

 

     (a) All of the following criteria:

 

     (i) The historic resource contributes to the significance of

 

the historic district in which it is located.

 

     (ii) Both the rehabilitation plan and completed rehabilitation

 

of the historic resource meet the federal secretary of the

 

interior's standards for rehabilitation and guidelines for

 

rehabilitating historic buildings, 36 CFR part 67.

 

     (iii) All rehabilitation work has been done to or within the

 

walls, boundaries, or structures of the historic resource or to

 

historic resources located within the property boundaries of the

 

property.

 

     (b) The taxpayer has received certification from the national

 

park service that the historic resource's significance, the

 

rehabilitation plan, and the completed rehabilitation qualify for

 

the credit allowed under section 47(a)(2) of the internal revenue

 

code.

 

     (4) If a qualified taxpayer is eligible for the credit allowed

 

under section 47(a)(2) of the internal revenue code, the qualified

 

taxpayer shall file for certification with the center to qualify

 

for the credit allowed under section 47(a)(2) of the internal

 

revenue code. If the qualified taxpayer has previously filed for

 

certification with the center to qualify for the credit allowed

 

under section 47(a)(2) of the internal revenue code, additional

 

filing for the credit allowed under this section is not required.

 

     (5) The center may inspect an historic resource at any time

 

during the rehabilitation process and may revoke certification of

 

completed rehabilitation if the rehabilitation was not undertaken

 

as represented in the rehabilitation plan or if unapproved

 

alterations to the completed rehabilitation are made during the 5

 

years after the tax year in which the credit was claimed. The

 

center shall promptly notify the department of a revocation.

 

     (6) Qualified expenditures for the rehabilitation of an

 

historic resource may be used to calculate the credit under this

 

section if the historic resource meets 1 of the criteria listed in

 

subdivision (a) and 1 of the criteria listed in subdivision (b):

 

     (a) The resource is 1 of the following during the tax year in

 

which a credit under this section is claimed for those qualified

 

expenditures:

 

     (i) Individually listed on the national register of historic

 

places or state register of historic sites.

 

     (ii) A contributing resource located within an historic

 

district listed on the national register of historic places or the

 

state register of historic sites.

 

     (iii) A contributing resource located within an historic

 

district designated by a local unit pursuant to an ordinance

 

adopted under the local historic districts act, 1970 PA 169, MCL

 

399.201 to 399.215.

 

     (b) The resource meets 1 of the following criteria during the

 

tax year in which a credit under this section is claimed for those

 

qualified expenditures:

 

     (i) The historic resource is located in a designated historic

 

district in a local unit of government with an existing ordinance

 

under the local historic districts act, 1970 PA 169, MCL 399.201 to

 

399.215.

 

     (ii) The historic resource is located in an incorporated local

 

unit of government that does not have an ordinance under the local

 

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and

 

has a population of less than 5,000.

 

     (iii) The historic resource is located in an unincorporated

 

local unit of government.

 

     (iv) The historic resource is located in an incorporated local

 

unit of government that does not have an ordinance under the local

 

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and is

 

located within the boundaries of an association that has been

 

chartered under 1889 PA 39, MCL 455.51 to 455.72.

 

     (v) The historic resource is subject to a historic

 

preservation easement.

 

     (7) For projects for which a certificate of completed

 

rehabilitation is issued for a tax year beginning before January 1,

 

2009, if a qualified taxpayer is a partnership, limited liability

 

company, or subchapter S corporation, the qualified taxpayer may

 

assign all or any portion of a credit allowed under this section to

 

its partners, members, or shareholders, based on the partner's,

 

member's, or shareholder's proportionate share of ownership or

 

based on an alternative method approved by the department. A credit

 

assignment under this subsection is irrevocable and shall be made

 

in the tax year in which a certificate of completed rehabilitation

 

is issued. A qualified taxpayer may claim a portion of a credit and

 

assign the remaining credit amount. A partner, member, or

 

shareholder that is an assignee shall not subsequently assign a

 

credit or any portion of a credit assigned to the partner, member,

 

or shareholder under this subsection. A credit amount assigned

 

under this subsection may be claimed against the partner's,

 

member's, or shareholder's tax liability under this act or under

 

the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532. A

 

credit assignment under this subsection shall be made on a form

 

prescribed by the department. The qualified taxpayer and assignees

 

shall attach a copy of the completed assignment form to the

 

department in the tax year in which the assignment is made and

 

attach a copy of the completed assignment form to the annual return

 

required to be filed under this act for that tax year.

 

     (8) For projects for which a certificate of completed

 

rehabilitation is issued for a tax year beginning after December

 

31, 2008, a qualified taxpayer may assign all or any portion of the

 

credit allowed under this section. A credit assignment under this

 

subsection is irrevocable and shall be made in the tax year in

 

which a certificate of completed rehabilitation is issued. A

 

qualified taxpayer may claim a portion of a credit and assign the

 

remaining amount. If the qualified taxpayer both claims and assigns

 

portions of the credit, the qualified taxpayer shall claim the

 

portion it claims in the tax year in which a certificate of

 

completed rehabilitation is issued pursuant to this section. An

 

assignee may subsequently assign the credit or any portion of the

 

credit assigned under this subsection to 1 or more assignees. An

 

assignment or subsequent reassignment of a credit can be made in

 

the year the certificate of completed rehabilitation is issued. A

 

credit assignment or subsequent reassignment under this section

 

shall be made on a form prescribed by the department. The

 

department or its designee shall review and issue a completed

 

assignment or reassignment certificate to the assignee or

 

reassignee. A credit amount assigned under this subsection may be

 

claimed against the assignees' tax under this act or under the

 

income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532. An

 

assignee or subsequent reassignee shall attach a copy of the

 

completed assignment certificate to the annual return required to

 

be filed under this act or under the income tax act of 1967, 1967

 

PA 281, MCL 206.1 to 206.532, for the tax year in which the

 

assignment or reassignment is made and the assignee or reassignee

 

first claims the credit, which shall be the same tax year.

 

     (9) If the credit allowed under this section for the tax year

 

and any unused carryforward of the credit allowed by this section

 

exceed the taxpayer's tax liability for the tax year, that portion

 

that exceeds the tax liability for the tax year shall not be

 

refunded but may be carried forward to offset tax liability in

 

subsequent tax years for 10 years or until used up, whichever

 

occurs first. If a qualified taxpayer has an unused carryforward of

 

a credit under this section, the amount otherwise added under

 

subsection (10), (11), or (12) to the qualified taxpayer's tax

 

liability may instead be used to reduce the qualified taxpayer's

 

carryforward under this section. An unused carryforward of a credit

 

under section 39c of former 1975 PA 228 that was unused at the end

 

of the last tax year for which former 1975 PA 228 was in effect may

 

be claimed against the tax imposed under this act for the years the

 

carryforward would have been available under section 39c of former

 

1975 PA 228. For projects for which a certificate of completed

 

rehabilitation is issued for a tax year beginning after December

 

31, 2008 and for which the credit amount allowed is less than

 

$250,000.00, a qualified taxpayer may elect to forgo the carryover

 

period and receive a refund of the amount of the credit that

 

exceeds the qualified taxpayer's tax liability. The amount of the

 

refund shall be equal to 90% of the amount of the credit that

 

exceeds the qualified taxpayer's tax liability. An election under

 

this subsection shall be made in the year that a certificate of

 

completed rehabilitation is issued and shall be irrevocable.

 

     (10) For tax years beginning before January 1, 2009, if the

 

taxpayer sells an historic resource for which a credit was claimed

 

under this section or under section 39c of former 1975 PA 228 less

 

than 5 years after the year in which the credit was claimed, the

 

following percentage of the credit amount previously claimed

 

relative to that historic resource shall be added back to the tax

 

liability of the taxpayer in the year of the sale:

 

     (a) If the sale is less than 1 year after the year in which

 

the credit was claimed, 100%.

 

     (b) If the sale is at least 1 year but less than 2 years after

 

the year in which the credit was claimed, 80%.

 

     (c) If the sale is at least 2 years but less than 3 years

 

after the year in which the credit was claimed, 60%.

 

     (d) If the sale is at least 3 years but less than 4 years

 

after the year in which the credit was claimed, 40%.

 

     (e) If the sale is at least 4 years but less than 5 years

 

after the year in which the credit was claimed, 20%.

 

     (f) If the sale is 5 years or more after the year in which the

 

credit was claimed, an addback to the taxpayer's tax liability

 

shall not be made.

 

     (11) For tax years beginning before January 1, 2009, if a

 

certification of completed rehabilitation is revoked under

 

subsection (5) less than 5 years after the year in which a credit

 

was claimed under this section or under section 39c of former 1975

 

PA 228, the following percentage of the credit amount previously

 

claimed relative to that historic resource shall be added back to

 

the tax liability of the taxpayer in the year of the revocation:

 

     (a) If the revocation is less than 1 year after the year in

 

which the credit was claimed, 100%.

 

     (b) If the revocation is at least 1 year but less than 2 years

 

after the year in which the credit was claimed, 80%.

 

     (c) If the revocation is at least 2 years but less than 3

 

years after the year in which the credit was claimed, 60%.

 

     (d) If the revocation is at least 3 years but less than 4

 

years after the year in which the credit was claimed, 40%.

 

     (e) If the revocation is at least 4 years but less than 5

 

years after the year in which the credit was claimed, 20%.

 

     (f) If the revocation is 5 years or more after the year in

 

which the credit was claimed, an addback to the taxpayer's tax

 

liability shall not be made.

 

     (12) Except as otherwise provided under subsection (13), for

 

tax years beginning after December 31, 2008, if a certificate of

 

completed rehabilitation is revoked under subsection (5) or (22)

 

(23)(b) or an historic resource is sold or disposed of less than 5

 

years after the historic resource is placed in service as defined

 

in section 47(b)(1) of the internal revenue code and related

 

treasury regulations or if a certificate of completed

 

rehabilitation issued after December 1, 2008 is revoked under

 

subsection (5) or (22) (23)(b) during a tax year beginning after

 

December 31, 2008 or an historic resource is sold or disposed of

 

less than 5 years after the historic resource is placed in service

 

during a tax year beginning after December 31, 2008, the following

 

percentage of the credit amount previously claimed relative to that

 

historic resource shall be added back to the tax liability of the

 

qualified taxpayer that received the certificate of completed

 

rehabilitation and not the assignee in the year of the revocation:

 

     (a) If the revocation is less than 1 year after the historic

 

resource is placed in service, 100%.

 

     (b) If the revocation is at least 1 year but less than 2 years

 

after the historic resource is placed in service, 80%.

 

     (c) If the revocation is at least 2 years but less than 3

 

years after the historic resource is placed in service, 60%.

 

     (d) If the revocation is at least 3 years but less than 4

 

years after the historic resource is placed in service, 40%.

 

     (e) If the revocation is at least 4 years but less than 5

 

years after the historic resource is placed in service, 20%.

 

     (f) If the revocation is at least 5 years or more after the

 

historic resource is placed in service, an addback to the qualified

 

taxpayer tax liability shall not be required.

 

     (13) Subsection (12) shall not apply if the qualified taxpayer

 

enters into a written agreement with the state historic

 

preservation office that will allow for the transfer or sale of the

 

historic resource and provides the following:

 

     (a) Reasonable assurance that subsequent to the transfer the

 

property will remain a historic resource during the 5-year period

 

after the historic resource is placed in service.

 

     (b) A method that the department can recover an amount from

 

the taxpayer equal to the appropriate percentage of credit added

 

back as described under subsection (12).

 

     (c) An encumbrance on the title to the historic resource being

 

sold or transferred, stating that the property must remain a

 

historic resource throughout the 5-year period after the historic

 

resource is placed in service.

 

     (d) A provision for the payment by the taxpayer of all legal

 

and professional fees associated with the drafting, review, and

 

recording of the written agreement required under this subsection.

 

     (14) The department of history, arts, and libraries through

 

the Michigan historical center may impose a fee to cover the

 

administrative cost of implementing the program under this section.

 

     (15) The qualified taxpayer shall attach all of the following

 

to the qualified taxpayer's annual return required under this act

 

or under the income tax act of 1967, 1967 PA 281, MCL 206.1 to

 

206.532, if applicable, on which the credit is claimed:

 

     (a) Certification of completed rehabilitation.

 

     (b) Certification of historic significance related to the

 

historic resource and the qualified expenditures used to claim a

 

credit under this section.

 

     (c) A completed assignment form if the qualified taxpayer or

 

assignee has assigned any portion of a credit allowed under this

 

section or if the taxpayer is an assignee of any portion of a

 

credit allowed under this section.

 

     (16) The department of history, arts, and libraries shall

 

promulgate rules to implement this section pursuant to the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328.

 

     (17) The total of the credits claimed under subsection (2) and

 

section 266 of the income tax act of 1967, 1967 PA 281, MCL

 

206.266, for a rehabilitation project shall not exceed 25% of the

 

total qualified expenditures eligible for the credit under

 

subsection (2) for that rehabilitation project.

 

     (18) The department of history, arts, and libraries through

 

the Michigan historical center shall report all of the following to

 

the legislature annually for the immediately preceding state fiscal

 

year:

 

     (a) The fee schedule used by the center and the total amount

 

of fees collected.

 

     (b) A description of each rehabilitation project certified.

 

     (c) The location of each new and ongoing rehabilitation

 

project.

 

     (19) In addition to the credit allowed under subsection (2)

 

and subject to the criteria under this subsection and subsections

 

(21), (22), and (23), for tax years that begin on and after January

 

1, 2009 a qualified taxpayer that has a preapproval letter issued

 

on or before December 31, 2013 may claim an additional credit that

 

has been approved under this subsection or subsection (20) against

 

the tax imposed by this act equal to a percentage established in

 

the taxpayer's preapproval letter of the qualified taxpayer's

 

qualified expenditures for the rehabilitation of an historic

 

resource or the actual amount of the qualified taxpayer's qualified

 

expenditures incurred during the completion of the rehabilitation

 

of an historic resource, whichever is less. The total amount of all

 

additional credits approved under this subsection shall not exceed

 

$8,000,000.00 in calendar year ending December 31, 2009;

 

$9,000,000.00 in calendar year ending December 31, 2010;

 

$10,000,000.00 in calendar year ending December 31, 2011;

 

$11,000,000.00 in calendar year ending December 31, 2012; and

 

$12,000,000.00 in calendar year ending December 31, 2013 and,

 

except as otherwise provided under this subsection, at least, 25%

 

of the allotted amount for additional credits approved under this

 

subsection during each calendar year shall be allocated to

 

rehabilitation plans that have $1,000,000.00 or less in qualified

 

expenditures. On October 1 of each calendar year, if the total of

 

all credits approved under subsection (19)(a) subdivision (a) for

 

the calendar year is less than the minimum allotted amount, the

 

department of history, arts, and libraries may use the remainder of

 

that allotted amount to approve applications for additional credits

 

submitted under subsection (19)(b) subdivision (b) for that

 

calendar year. To be eligible for the additional credit under this

 

subsection, the taxpayer shall apply to and receive a preapproval

 

letter and comply with the following:

 

     (a) For a rehabilitation plan that has $1,000,000.00 or less

 

in qualified expenditures, the taxpayer shall apply to the

 

department of history, arts, and libraries for approval of the

 

additional credit under this subsection. Subject to the limitation

 

provided under this subsection, the director of the department of

 

history, arts, and libraries or his or her designee is authorized

 

to approve an application under this subdivision and determine the

 

percentage of at least 10% but not more than 15% of the taxpayer's

 

qualified expenditures for which he or she may claim an additional

 

credit. If the director of the department of history, arts, and

 

libraries or his or her designee approves the application under

 

this subdivision, then he or she shall issue a preapproval letter

 

to the taxpayer that states that the taxpayer is a qualified

 

taxpayer and the maximum percentage of the qualified expenditures

 

on which a credit may be claimed for the rehabilitation plan when

 

it is complete and a certification of completed rehabilitation is

 

issued.

 

     (b) For a rehabilitation plan that has more than $1,000,000.00

 

in qualified expenditures, the taxpayer shall apply to the

 

department of history, arts, and libraries for approval of the

 

additional credit under this subsection. The director of the

 

department of history, arts, and libraries or his or her designee,

 

subject to the approval of the president of the Michigan strategic

 

fund or his or her designee, is authorized to approve an

 

application under this subdivision and determine the percentage of

 

up to 15% of the taxpayer's qualified expenditures for which he or

 

she may claim an additional credit. An application shall be

 

approved or denied not more than 15 business days after the

 

director of the department of history, arts, and libraries or his

 

or her designee has reviewed the application, determined the

 

percentage amount of the credit for that applicant, and submitted

 

the same to the president of the Michigan strategic fund or his or

 

her designee. If the president of the Michigan strategic fund or

 

his or her designee does not approve or deny the application within

 

15 business days after the application is received from the

 

department of history, arts, and libraries, the application is

 

considered approved and the credit awarded in the amount as

 

determined by the director of the department of history, arts, and

 

libraries or his or her designee. If the president of the Michigan

 

strategic fund or his or her designee approves the application

 

under this subdivision, the director of the department of history,

 

arts, and libraries or his or her designee shall issue a

 

preapproval letter to the taxpayer that states that the taxpayer is

 

a qualified taxpayer and the maximum percentage of the qualified

 

expenditures on which a credit may be claimed for the

 

rehabilitation plan when it is complete and a certification of

 

completed rehabilitation is issued.

 

     (20) The director of the department of history, arts, and

 

libraries or his or her designee, subject to the approval of the

 

president of the Michigan strategic fund and the state treasurer,

 

may approve 3 additional credits during the 2009 calendar year of

 

up to 15% of the qualified taxpayer's qualified expenditures, and 2

 

additional credits during the 2010, 2011, 2012, and 2013 calendar

 

years of up to 15% of the qualified taxpayer's qualified

 

expenditures, for certain rehabilitation plans that the director of

 

the department of history, arts, and libraries or his or her

 

designee determines is a high community impact rehabilitation plan

 

that will have a significantly greater historic, social, and

 

economic impact than those plans described under subsection (19)(a)

 

and (b). To be eligible for the additional credit under this

 

subsection, the taxpayer shall apply to and receive a preapproval

 

letter from the department of history, arts, and libraries. An

 

application shall be approved or denied not more than 15 business

 

days after the director of the department of history, arts, and

 

libraries or his or her designee has reviewed the application,

 

determined the percentage amount of the credit for that applicant,

 

and submitted the same to the president of the Michigan strategic

 

fund and the state treasurer. If the president of the Michigan

 

strategic fund and the state treasurer do not approve or deny the

 

application within 15 business days after the application is

 

received from the department of history, arts, and libraries, the

 

application is considered approved and the credit awarded in the

 

amount as determined by the director of the department of history,

 

arts, and libraries or his or her designee. If the president of the

 

Michigan strategic fund and the state treasurer approve the

 

application under this subdivision, the director of the department

 

of history, arts, and libraries or his or her designee shall issue

 

a preapproval letter to the taxpayer that states that the taxpayer

 

is a qualified taxpayer and the maximum percentage of the qualified

 

expenditures on which a credit may be claimed for the high

 

community impact rehabilitation plan when it is complete and a

 

certification of completed rehabilitation is issued. Before

 

approving a credit under this subsection, the director of the

 

department of history, arts, and libraries or his or her designee

 

shall consider all of the following criteria to the extent

 

reasonably applicable:

 

     (a) The importance of the historic resource to the community

 

in which it is located.

 

     (b) If the rehabilitation of the historic resource will act as

 

a catalyst for additional rehabilitation or revitalization of the

 

community in which it is located.

 

     (c) The potential that the rehabilitation of the historic

 

resource will have for creating or preserving jobs and employment

 

in the community in which it is located.

 

     (d) Other social benefits the rehabilitation of the historic

 

resource will bring to the community in which it is located.

 

     (e) The amount of local community and financial support for

 

the rehabilitation of the historic resource.

 

     (f) The taxpayer's financial need of the additional credit.

 

     (g) Whether the taxpayer is eligible for the credit allowed

 

under section 47(a)(2) of the internal revenue code.

 

     (h) Any other criteria that the director of the department of

 

history, arts, and libraries, the president of the Michigan

 

strategic fund, and the state treasurer consider appropriate for

 

the determination of approval under this subsection.

 

     (21) The maximum amount of credit that a taxpayer or an

 

assignee may claim under subsection (20) during a tax year is

 

$3,000,000.00. If the amount of the credit approved in the

 

taxpayer's certificate of completed renovation is greater than

 

$3,000,000.00 that portion that exceeds the cap shall be carried

 

forward to offset tax liability in subsequent tax years until used

 

up.

 

     (22) Before approving a credit, determining the amount of such

 

credit, and issuing a preapproval letter for such credit under

 

subsection (19) or before considering an amendment to the

 

preapproval letter, the director of the department of history,

 

arts, and libraries or his or her designee shall consider the

 

following criteria to the extent reasonably applicable:

 

     (a) The importance of the historic resource to the community.

 

     (b) The physical condition of the historic resource.

 

     (c) The taxpayer's financial need of the additional credit.

 

     (d) The overall economic impact the renovation will have on

 

the community.

 

     (e) Any other criteria that the director of the department of

 

history, arts, and libraries and the president of the Michigan

 

strategic fund, as applicable, consider appropriate for the

 

determination of approval under subsection (19).

 

     (23) The director of the department of history, arts, and

 

libraries or his or her designee may at any time before a

 

certification of completed rehabilitation is issued for a credit

 

for which a preapproval letter was issued pursuant to subsection

 

(19) do the following:

 

     (a) Subject to the limitations and parameters under subsection

 

(19), make amendments to the preapproval letter, which may include

 

revising the amount of qualified expenditures for which the

 

taxpayer may claim the additional credit under subsection (19).

 

     (b) Revoke the preapproval letter if he or she determines that

 

there has not been substantial progress toward completion of the

 

rehabilitation plan or that the rehabilitation plan cannot be

 

completed. The director of the department of history, arts, and

 

libraries or his or her designee shall provide the qualified

 

taxpayer with a notice of his or her intent to revoke the

 

preapproval letter 45 days prior to the proposed date of

 

revocation.

 

     (24) If a preapproval letter is revoked under subsection

 

(23)(b), the amount of the credit approved under that preapproval

 

letter shall be added to the annual cap in the calendar year that

 

the preapproval letter is revoked. After a certification of

 

completed rehabilitation is issued for a rehabilitation plan

 

approved under subsection (19), if the director of the department

 

of history, arts, and libraries or his or her designee determines

 

that the actual amount of the additional credit to be claimed by

 

the taxpayer for the calendar year is less than the amount approved

 

under the preapproval letter, the difference shall be added to the

 

annual cap in the calendar year that the certification of completed

 

rehabilitation is issued.

 

     (25) Unless otherwise specifically provided under subsections

 

(19) through (24), all other provisions under this section such as

 

the recapture of credits, assignment of credits, and refundability

 

of credits in excess of a qualified taxpayer's tax liability apply

 

to the additional credits issued under subsections (19) and (20).

 

     (26) In addition to meeting the criteria in subsection (20)(a)

 

through (h), 2 of the 3 credits available under subsection (20)

 

during the 2009 calendar year for a high community impact

 

rehabilitation plan shall be for an application meeting 1 of the

 

following criteria:

 

     (a) All of the following:

 

     (i) The historic resource must be at least 80 years old.

 

     (ii) The historic resource must comprise at least 75,000 total

 

square feet.

 

     (iii) The historic resource must be located in a county with a

 

population of more than 1,500,000.

 

     (iv) The historic resource must be located in a city with an

 

unemployment rate that is at least 2% higher than the current state

 

average unemployment rate at the time of the application.

 

     (v) The historic resource receives a federal earmark

 

appropriation and is the former home of a former professional

 

sports team.

 

     (b) All of the following:

 

     (i) The historic resource must be at least 85 years old.

 

     (ii) The historic resource must comprise at least 120,000 total

 

square feet.

 

     (iii) The historic resource must be located in a county with a

 

population of more than 400,000 and less than 500,000.

 

     (iv) The historic resource must be located in a city with a

 

population of more than 100,000 and less than 125,000.

 

     (v) The historic resource must be located in a city with an

 

unemployment rate that is at least 2% higher than the current state

 

average unemployment rate at the time of the application.

 

     (27) For purposes of this section, taxpayer includes a person

 

subject to the tax imposed under chapter 2A or 2B.

 

     (28) As used in this section:

 

     (a) "Contributing resource" means an historic resource that

 

contributes to the significance of the historic district in which

 

it is located.

 

     (b) "Historic district" means an area, or group of areas not

 

necessarily having contiguous boundaries, that contains 1 resource

 

or a group of resources that are related by history, architecture,

 

archaeology, engineering, or culture.

 

     (c) "Historic resource" means a publicly or privately owned

 

historic building, structure, site, object, feature, or open space

 

located within an historic district designated by the national

 

register of historic places, the state register of historic sites,

 

or a local unit acting under the local historic districts act, 1970

 

PA 169, MCL 399.201 to 399.215, or that is individually listed on

 

the state register of historic sites or national register of

 

historic places, and includes all of the following:

 

     (i) An owner-occupied personal residence or a historic resource

 

located within the property boundaries of that personal residence.

 

     (ii) An income-producing commercial, industrial, or residential

 

resource or an historic resource located within the property

 

boundaries of that resource.

 

     (iii) A resource owned by a governmental body, nonprofit

 

organization, or tax-exempt entity that is used primarily by a

 

taxpayer lessee in a trade or business unrelated to the

 

governmental body, nonprofit organization, or tax-exempt entity and

 

that is subject to tax under this act.

 

     (iv) A resource that is occupied or utilized by a governmental

 

body, nonprofit organization, or tax-exempt entity pursuant to a

 

long-term lease or lease with option to buy agreement.

 

     (v) Any other resource that could benefit from rehabilitation.

 

     (d) "Last tax year" means the taxpayer's tax year under former

 

1975 PA 228 that begins after December 31, 2006 and before January

 

1, 2008.

 

     (e) "Local unit" means a county, city, village, or township.

 

     (f) "Long-term lease" means a lease term of at least 27.5

 

years for a residential resource or at least 31.5 years for a

 

nonresidential resource.

 

     (g) "Michigan historical center" or "center" means the state

 

historic preservation office of the Michigan historical center of

 

the department of history, arts, and libraries or its successor

 

agency.

 

     (h) "Michigan strategic fund" means the Michigan strategic

 

fund created under the Michigan strategic fund act, 1984 PA 270,

 

MCL 125.2001 to 125.2094.

 

     (i) "Open space" means undeveloped land, a naturally

 

landscaped area, or a formal or man-made landscaped area that

 

provides a connective link or a buffer between other resources.

 

     (j) "Person" means an individual, partnership, corporation,

 

association, governmental entity, or other legal entity.

 

     (k) "Preapproval letter" means a letter issued by the director

 

of the department of history, arts, and libraries or his or her

 

designee that indicates the date that the complete part 2

 

application was received and the amount of the credit allocated to

 

the project based on the estimated rehabilitation cost included in

 

the application.

 

     (l) "Qualified expenditures" means capital expenditures that

 

qualify, or would qualify except that the taxpayer entered into an

 

agreement under subsection (13), for a rehabilitation credit under

 

section 47(a)(2) of the internal revenue code if the taxpayer is

 

eligible for the credit under section 47(a)(2) of the internal

 

revenue code or, if the taxpayer is not eligible for the credit

 

under section 47(a)(2) of the internal revenue code, the qualified

 

expenditures that would qualify under section 47(a)(2) of the

 

internal revenue code except that the expenditures are made to an

 

historic resource that is not eligible for the credit under section

 

47(a)(2) of the internal revenue code that were paid. Qualified

 

expenditures do not include capital expenditures for nonhistoric

 

additions to an historic resource except an addition that is

 

required by state or federal regulations that relate to historic

 

preservation, safety, or accessibility.

 

     (m) "Qualified taxpayer" means a person that either owns the

 

resource to be rehabilitated or has a long-term lease agreement

 

with the owner of the historic resource and that has qualified

 

expenditures for the rehabilitation of the historic resource equal

 

to or greater than 10% of the state equalized valuation of the

 

property. If the historic resource to be rehabilitated is a portion

 

of an historic or nonhistoric resource, the state equalized

 

valuation of only that portion of the property shall be used for

 

purposes of this subdivision. If the assessor for the local tax

 

collecting unit in which the historic resource is located

 

determines the state equalized valuation of that portion, that

 

assessor's determination shall be used for purposes of this

 

subdivision. If the assessor does not determine that state

 

equalized valuation of that portion, qualified expenditures, for

 

purposes of this subdivision, shall be equal to or greater than 5%

 

of the appraised value as determined by a certified appraiser. If

 

the historic resource to be rehabilitated does not have a state

 

equalized valuation, qualified expenditures for purposes of this

 

subdivision shall be equal to or greater than 5% of the appraised

 

value of the resource as determined by a certified appraiser.

 

     (n) "Rehabilitation plan" means a plan for the rehabilitation

 

of an historic resource that meets the federal secretary of the

 

interior's standards for rehabilitation and guidelines for

 

rehabilitation of historic buildings under 36 CFR part 67.

 

     Enacting section 1. This amendatory act is retroactive and is

 

effective for tax years beginning after December 31, 2007.