2023 Connecticut General Statutes › Title 10 - Education and Culture › Chapter 184b - Department of Economic and Community Development: Culture and Tourism › Section 10-416a. - Tax credits for rehabilitation of certified historic structures. No tax credit reserved on or after July 1, 2014.

(a) As used in this section, the following terms shall have the following meanings unless the context clearly indicates another meaning:
(1) “Officer” means the State Historic Preservation Officer designated pursuant to 36 CFR S. 61.2 (1978);
(2) “Certified historic structure” means an historic commercial, industrial, institutional, former municipal, state or federal government property, cultural building, or residential property of more than four units that: (A) Is listed individually on the National or State Register of Historic Places, or (B) is located in a district listed on the National or State Register of Historic Places, and has been certified by the officer as contributing to the historic character of such district;
(3) “Certified rehabilitation” means any rehabilitation of a certified historic structure for residential use consistent with the historic character of such property or the district in which the property is located as determined by regulations adopted by the Department of Economic and Community Development;
(4) “Owner” means any person, firm, limited liability company, nonprofit or for-profit corporation or other business entity which possesses title to an historic structure and undertakes the rehabilitation of such structure;
(5) “Placed in service” means that substantial rehabilitation work has been completed which would allow for issuance of a certificate of occupancy for the entire building or, in projects completed in phases, for individual residential units that are an identifiable portion of the building;
(6) “Qualified rehabilitation expenditures” means any costs incurred for the physical construction involved in the rehabilitation of a certified historic structure for residential use, excluding: (A) The owner's personal labor, (B) the cost of a new addition, except as required to comply with any provision of the State Building Code or the Fire Safety Code, and (C) any nonconstruction cost such as architectural fees, legal fees and financing fees;
(7) “Rehabilitation plan” means any construction plans and specifications for the proposed rehabilitation of a certified historic structure in sufficient detail for evaluation by compliance with the standards developed under the provisions of subsections (b) to (d), inclusive, of this section; and
(8) “Substantial rehabilitation” or “substantially rehabilitate” means the qualified rehabilitation expenditures of a certified historic structure that exceed twenty-five per cent of the assessed value of such structure.
(b) (1) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for owners rehabilitating certified historic structures.
(2) The credit authorized by this section shall be available in the tax year in which the substantially rehabilitated certified historic structure is placed in service. In the case of projects completed in phases, the tax credit shall be prorated to the substantially rehabilitated identifiable portion of the building placed in service. If the tax credit is more than the amount owed by the taxpayer for the year in which the substantially rehabilitated certified historic structure is placed in service, the amount that is more than the taxpayer's tax liability may be carried forward and credited against the taxes imposed for the succeeding five years or until the full credit is used, whichever occurs first.
(3) Any credits allowed under this section that are provided to multiple owners of certified historic structures shall be passed through to persons designated as partners, members or owners, pro rata or pursuant to an agreement among such persons designated as partners, members or owners documenting an alternative distribution method without regard to other tax or economic attributes of such entity. Any owner entitled to a credit under this section may assign, transfer or convey the credits, in whole or in part, by sale or otherwise to any individual or entity and such transferee shall be entitled to offset the tax imposed under chapter 207, 208, 209, 210, 211 or 212 as if such transferee had incurred the qualified rehabilitation expenditure.
(c) The officer shall develop standards for the approval of rehabilitation of certified historic structures for which a tax credit voucher is sought. Such standards shall take into account whether the rehabilitation of a certified historic structure will preserve the historic character of the building.
(d) The Department of Economic and Community Development may adopt regulations, in accordance with chapter 54, to carry out the purposes of this section. Such regulations shall include provisions for filing of applications, rating criteria and for timely approval by the department.
(e) Prior to beginning any rehabilitation work on a certified historic structure, the owner shall submit (1) a rehabilitation plan to the officer for a determination of whether or not such rehabilitation work meets the standards developed under the provisions of subsections (b) to (d), inclusive, of this section, and (2) an estimate of the qualified rehabilitation expenditures. The provisions of this subsection shall not disqualify applications for tax credits for certified historic structures for which rehabilitation commenced but were not placed in service before July 1, 2006.
(f) If the officer certifies that the rehabilitation plan conforms to the standards developed under the provisions of subsections (b) to (d), inclusive, of this section, the Department of Economic and Community Development shall reserve for the benefit of the owner an allocation for a tax credit equivalent to twenty-five per cent of the projected qualified rehabilitation expenditures, not exceeding two million seven hundred thousand dollars.
(g) Following the completion of rehabilitation of a certified historic structure, the owner shall notify the officer that such rehabilitation has been completed. The owner shall provide the officer with documentation of work performed on the certified historic structure and shall submit certification of the costs incurred in rehabilitating the certified historic structure. The officer shall review such rehabilitation and verify its compliance with the rehabilitation plan. Following such verification, the Department of Economic and Community Development shall issue a tax credit voucher to the owner rehabilitating the certified historic structure or to the taxpayer named by the owner as contributing to the rehabilitation. The tax credit voucher shall be in an amount equivalent to the lesser of the tax credit reserved upon certification of the rehabilitation plan under the provisions of subsection (f) of this section or twenty-five per cent of the actual qualified rehabilitation expenditures not exceeding two million seven hundred thousand dollars. In order to obtain a credit against any state tax due that is specified in subsections (h) to (j), inclusive, of this section, the holder of the tax credit voucher shall file the voucher with the holder's state tax return.
(h) The Commissioner of Revenue Services shall grant a tax credit to a taxpayer holding the tax credit voucher issued under subsections (e) to (i), inclusive, of this section against any tax due under chapter 207, 208, 209, 210, 211 or 212 in the amount specified in the tax credit voucher. Such taxpayer shall submit the voucher and the corresponding tax return to the Department of Revenue Services.
(i) The aggregate amount of all tax credits which may be reserved by the Department of Economic and Community Development upon certification of rehabilitation plans under subsections (b) to (d), inclusive, of this section shall not exceed fifteen million dollars in any one fiscal year.
(j) The Department of Economic and Community Development may charge an application fee in an amount not to exceed ten thousand dollars to cover the cost of administering the program established pursuant to this section.
(k) Notwithstanding subsection (f) of this section, no tax credit shall be reserved under this section on or after July 1, 2014.
(P.A. 06-186, S. 82; P.A. 07-217, S. 48; P.A. 11-8, S. 31; 11-48, S. 121; P.A. 14-217, S. 167.)
History: P.A. 06-186 effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 07-217 made a technical change in Subsec. (g), effective July 12, 2007; P.A. 11-8 made a technical change in Subsec. (a)(6), effective May 24, 2011; P.A. 11-48 replaced definition of “commission” with definition of “officer” in Subsec. (a)(1), redefined “certified historic structure” in Subsec. (a)(2), changed authority for adoption of regulations from mandatory to permissive in Subsec. (d) and replaced “commission” with “Department of Economic and Community Development”, “officer” or “department”, effective July 1, 2011, and applicable to income years commencing on or after January 1, 2011; P.A. 14-217 added Subsec. (k) re discontinuation of tax credit reservations, effective July 1, 2014.