HB140 Alabama 2013 Session

Summary

Primary Sponsor

Victor Gaston

Republican

Co-Sponsors

Jack WilliamsAllen TreadawayDemetrius C. NewtonSteve McMillanPaul DeMarcoWes LongJim CarnsMike HillTerri CollinsJamie IsonRandy DavisMicky HammonAllen FarleyWilliam RobertsRichard BaughnDickie DrakePebblin W. WarrenBarbara Bigsby BoydDonnie ChesteenMark TuggleChad FincherJay LoveBecky NordgrenElaine BeechAlan HarperJohn MerrillKerry RichHoward SanderfordKen JohnsonThomas JacksonMike BallRod ScottMac McCutcheonDavid SessionsDuwayne BridgesSteve ClouseMike HubbardKurt WallaceMerika ColemanThad McClammyJames E. BuskeyMary Sue McClurkinRandy WoodLawrence McAdoryArthur PayneEd HenryMary MooreBill PooleGreg WrenPaul W. Lee

Session

Regular Session 2013

Title

Income tax, tax credit for rehabilitation, preservation, and development of certain historic structures

Summary

HB140 creates a state income tax credit program to encourage rehabilitation and preservation of historic structures in Alabama.

What This Bill Does

The bill provides a tax credit against Alabama income tax for qualified rehabilitation expenditures on certified historic structures and certain pre-1936 non-historic structures. The Alabama Historical Commission certifies eligible structures, approves rehabilitation plans, and reserves credits which are issued as tax credit certificates after completion. Credits are transferable and can be used by the owner or sold to others, subject to annual caps, and credits may be carried forward if not fully used. The program includes standards for substantial rehabilitation, required documentation, and a process for applying, reserving, and reporting, plus updates to local property tax assessments after rehabilitation.

Who It Affects

• Property owners, developers, or other entities that own certified historic structures or eligible pre-1936 structures in Alabama, who could receive a transferable state tax credit for rehabilitation expenditures.
• The Alabama Historical Commission and the Alabama Department of Revenue (and local assessors), which administer, certify, reserve, issue, and audit credits and oversee related reporting and property tax adjustments.

Key Provisions

• Provides a state income tax credit: 25% of qualified rehabilitation expenditures for certified historic structures, and 10% for qualified pre-1936 non-historic structures.
• Per-project credit limits: no credit may exceed $5,000,000 for all non-residential types (except certified historic residential structures, which have a $50,000 limit).
• Certification and standards: rehabilitation must meet standards set by the Alabama Historical Commission, including per-IRC references, and cost definitions specify eligible expenditures (e.g., architectural and engineering fees) while excluding certain items.
• Application and reservation process: owners must submit a rehabilitation plan; credits are reserved in order of formal submissions, with a lottery for ties; ownership changes are restricted unless a foreclosure or bankruptcy occurs with documentation; disapproved applications may be resubmitted as new submissions.
• Cap on reservations: total credits reserved in a tax year cannot exceed $30,000,000 (with related provisions for rescissions and carryovers); unused credits may be allocated in later years if not all are reserved.
• Commencement and timing: owners receiving reservations must begin rehabilitation within 18 months and incur at least 20% of estimated costs to constitute commencement; work may begin before listing on the National Register under certain risk allowances.
• Certification after completion: upon substantial rehabilitation, owners must provide cost/expense certifications, CPA attestations (audited if expenditures exceed $500,000), and an independent MAI appraisal; the commission then issues a tax credit certificate for the lesser of the reserved amount or specified percentages of actual expenditures.
• Credit transfer and use: credits are transferable and can be used to offset state taxes; pass-through treatment applies to partnerships and multi-owner structures; transferees may further transfer credits.
• Recapture and recourse: recapture amounts follow IRC rules; the initial credit recipient is liable for recapture, not any transferee.
• Ad valorem tax adjustments: local tax assessors must re-evaluate and adjust ad valorem taxes in the year a rehabilitation is placed in service.
• Fees and reporting: commissions may charge up to 1% of qualified rehabilitation expenses (max $10,000) to process applications; a joint report on economic impact is due to the Legislature starting in year three and annually thereafter.
• Eligibility window and timing: credits are not available to owners who submit an application after three years from the act’s effective date; the act becomes effective immediately upon approval.
• Administrative rules: the commission must promulgate necessary rules by Sept 1, 2013; reservations begin Oct 1, 2013; credits may not be claimed before the taxpayer’s 2014 return.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation