SB257 Alabama 2014 Session

Summary

Primary Sponsor

Tammy Irons

Democrat

Session

Regular Session 2014

Title

Taxation, transfer of tax credit for rehabilitation, income tax credits for rehabilitation of historic structures, Act 2013-241, 2013 Reg. Sess., am'd; Secs. 40-9F-2, 40-9F-3, 40-9F-5 am'd.; Sec. 40-9F-7 repealed

Summary

SB257 would let historic preservation tax credits be transferred between taxpayers and remove the credits' expiration date.

What This Bill Does

It expands the existing tax credit by allowing credits to be transferred or sold, and it repeals the expiration of the credit. It defines key terms (like certified historic structure and qualified rehabilitation expenditures), sets credit rates (25% for certified historic structures and 10% for qualified pre-1936 non-historic structures) with annual caps, and creates a system to reserve, issue, and certify credits. It establishes requirements for rehabilitation plans, timelines, documentation, and a tracking/transfer process, including rules for ownership changes and recapture.

Who It Affects

• Property owners or developers undertaking rehabilitation of historic structures in Alabama, who would be eligible to claim credits and may transfer credits to others.
• Investors and ownership entities (partners, LLCs, or nonprofits) that acquire, hold, or transfer the tax credits and may pass them through to partners or other recipients.

Key Provisions

• Allows transfer and assignment of the historic rehabilitation tax credit and repeals the expiration date of the credit.
• Defines terms: certified historic structure, certified rehabilitation, qualified rehabilitation expenditures, qualified structure, owner, rehabilitation plan, and substantial rehabilitation.
• Creates a reservation/issuance system for credits with priority rules and a lottery for tie-breakers; sets ownership-change restrictions (generally up to 50% change allowed; exceptions for certain reorganizations or foreclosures).
• Sets credit amounts and caps: 25% of qualified rehabilitation expenditures for certified historic structures; 10% for certified pre-1936 non-historic structures; caps of $5,000,000 per type (historic) except $50,000 for certified historic residential structures.
• Requires rehabilitation plans, cost estimates, and initiation timelines; owners must begin rehabilitation within 18 months of reservation and incur at least 20% of estimated costs to start.
• Requires CPA cost/expense certification and, for larger projects, an independent MAI appraisal; commissioner issues a tax credit certificate within 90 days of receiving documentation.
• Credits are transferable and can be passed through to partners or transferred to other holders; transfers must be reported to the commission; systems for tracking ownership are established.
• Recapture rules tie to federal tax code Section 50; only the initial owner is liable for any recaptured amount.
• Ad valorem tax re-assessment: local tax assessors must re-evaluate the property for ad valorem taxes when a rehabilitation credit is certified.
• Processing fees may be charged to applicants (up to 1% of qualified rehabilitation expenses, not to exceed $10,000).
• Annual reporting to the Legislature on economic impact and usage of the credits; the act repeals Section 7 of the prior act.
• Effective date is three months after passage/approval; the act outlines procedures for handling reservations, credits, and transfers.

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