HB445 Alabama 2018 Session

Summary

Primary Sponsor

Laura HallRepresentative

Democrat

Session

Regular Session 2018

Title

Taxation, income tax credit, against tax liability for the rehabilitation, preservation, or development of structures near certain higher education institutions, Historic University Neighborhood Rehabilitation Act

Summary

HB 445 would create a 25% state income tax credit for rehabilitating certified historic structures near certain historic higher education institutions in Alabama, with a structured process for approval, use, transfer, and reporting.

What This Bill Does

The bill establishes the Historic University Neighborhood Rehabilitation Act, creating a tax credit equal to 25% of qualified rehabilitation expenditures for certified structures within a half mile of historic higher education institutions. It sets caps, requires a rehabilitation plan and approval before work, and imposes timelines to begin and complete projects. It funds the credits through a dedicated Education Trust Fund account, allows credits to be transferred with restrictions, and requires documentation and audits after completion.

Who It Affects

• Property owners who own a certified structure within one-half mile of a historic higher education institution and plan to rehabilitate it; these owners could receive a 25% credit against their Alabama income tax for qualified rehabilitation expenditures, subject to caps and timing requirements.
• Taxpayers and entities that hold, transfer, or receive transferred tax credits (including partnerships and other pass-through or investment arrangements); transferees can use credits to offset Alabama income tax, but credits must be used by the transferee and are subject to value and transfer rules (minimum 85% of face value, transfer fees, and documentation).

Key Provisions

• Defines 'certified structure' as a building within one-half mile of a historic higher education institution and eligible for a tax credit for rehabilitation.
• Provides a tax credit equal to 25% of qualified rehabilitation expenditures for certified structures, with a lifetime cap of $5,000,000 per property type per tax year.
• Requires a rehabilitation plan and Commission review; credits are reserved by a committee based on project ranking, with annual reservation caps (2019-2023: $10,000,000 per year, plus rescinded credits; total reservations not to exceed $50,000,000 through 2023).
• Substantial rehabilitation is defined (costs > 50% of original purchase price or $25,000, whichever greater) and triggers additional standards and documentation, including cost certifications and independent appraisals.
• Disbursement of credits occurs after project completion, with a tax credit certificate issued for the lesser of the reserved amount or 25% of actual expenditures; excess credits may be requested if expenditures exceed reserved amounts.
• Credits can be transferred or sold to others (minimum 85% of face value); transfers require formal statements and documents, with fees and a 30-day period to complete the transfer.
• The Department of Revenue administers the credit, audits improper credits, and credits claimed in the tax year the rehabilitation is placed in service; credits claimed at the entity level for certain structures (not passed through to individual owners).
• Post-completion, the owner must notify the relevant ad valorem taxing authority for updated assessments; credits are subject to recapture rules and adjustments under state and federal law.
• An Alabama Historical Commission and a Tax Credit Evaluating Committee will establish rules and criteria for evaluating projects, including community impact, geographic distribution, and availability of other grants.
• Credits are not available for applications submitted after December 31, 2023, but previously reserved credits remain valid; the act includes sunset provisions and immediate effectiveness.

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