Sec. 10-416b. Tax credits for rehabilitation of certified historic structures for mixed-use or affordable housing.
Sec. 10-416b. Tax credits for rehabilitation of certified historic structures for
mixed-use or affordable housing. (a) As used in this section, the following terms shall
have the following meanings unless the context clearly indicates another meaning:
(1) "Commission" means the Connecticut Commission on Culture and Tourism
established pursuant to section 10-392;
(2) "Certified historic structure" means an historic commercial or industrial property 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 commission as contributing to the historic character of
such district;
(3) "Certified rehabilitation" means any rehabilitation of a certified historic structure for mixed residential and nonresidential uses consistent with the historic character of
such property or the district in which the property is located as determined by regulations
adopted by the commission;
(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 mixed
residential and nonresidential uses where at least thirty-three per cent of the total square
footage of the rehabilitation is placed into service 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 State 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 commission 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 commission 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 commission shall adopt regulations, in accordance with chapter 54, to carry
out the purposes of this section. Such regulations shall include provisions for the filing
of applications, rating criteria and for timely approval by the commission.
(e) Prior to beginning any rehabilitation work on a certified historic structure, the
owner shall submit (1) a rehabilitation plan to the commission 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, (2) an estimate of the qualified
rehabilitation expenditures, and (3) for projects pursuant to subdivision (2) of subsection
(f) of this section, (A) the number of units of affordable housing, as defined in section
8-39a, to be created, (B) the proposed rents or sale prices of such units, and (C) the
median income for the municipality where the project is located. In the case of a project
pursuant to subdivision (2) of subsection (f) of this section the owner shall submit a
copy of data required under subdivision (3) of this subsection to the Department of
Economic and Community Development.
(f) If the commission certifies that the rehabilitation plan conforms to the standards
developed under the provisions of subsections (b) to (d), inclusive, of this section, the
commission shall reserve for the benefit of the owner an allocation for a tax credit
equivalent to (1) twenty-five per cent of the projected qualified rehabilitation expenditures, or (2) for rehabilitation plans submitted pursuant to subsection (e) of this section
on or after June 14, 2007, thirty per cent of the projected qualified rehabilitation expenditures if (A) at least twenty per cent of the units are rental units and qualify as affordable
housing, as defined in section 8-39a, or (B) at least ten per cent of the units are individual
homeownership units and qualify as affordable housing, as defined in section 8-39a.
No tax credit shall be allocated for the purposes of this subdivision unless an applicant
has submitted to the commission a certificate from the Department of Economic and
Community Development pursuant to subsections (k) and (l) of this section confirming
that the project complies with affordable housing requirements under section 8-39a.
(g) Following the completion of rehabilitation of a certified historic structure, the
owner shall notify the commission that such rehabilitation has been completed. The
owner shall provide the commission 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 commission shall review such rehabilitation
and verify its compliance with the rehabilitation plan. Following such verification, the
commission 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 (1) twenty-five per cent of the actual qualified rehabilitation
expenditures, or (2) for projects including affordable housing pursuant to subdivision
(2) of subsection (f) of this section, thirty per cent of the actual qualified rehabilitation
expenditures. In order to obtain a credit against any state tax due that is specified in
subsection (h) 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 commission 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.
(j) The aggregate amount of all tax credits which may be reserved by the Commission on Culture and Tourism upon certification of rehabilitation plans under subsections
(a) to (i), inclusive, of this section shall not exceed fifty million dollars for the fiscal
three-year period beginning July 1, 2008, and ending June 30, 2011, inclusive, and each
fiscal three-year period thereafter. No project may receive tax credits in an amount
exceeding ten per cent of such aggregate amount.
(k) On or before October 1, 2009, and annually thereafter, the Commission on Culture and Tourism shall report the total amount of historic preservation tax credits and
affordable housing tax credits reserved for the previous fiscal year under subsections
(a) to (i), inclusive, of this section, to the joint standing committees of the General
Assembly having cognizance of matters relating to commerce and to finance, revenue
and bonding. Each such report shall include the following information for each project
for which tax credit has been reserved: (1) The total project costs, (2) the value of the
tax credit reservation for the purpose of historic preservation, (3) a statement whether
the reservation is for mixed-use and if so, the proportion of the project that is not residential, and (4) the number of residential units to be created, and, for affordable housing
reservations, the value of the reservation and percentage of residential units that will
qualify as affordable housing, as defined in section 8-39a.
(l) (1) If the total amount of such tax credits reserved in the first fiscal year of a
fiscal three-year period is more than sixty-five per cent of the aggregate amount of tax
credits reserved under subsections (a) to (i), inclusive, of this section, then no additional
reservation shall be allowed for the second fiscal year of such fiscal three-year period
unless the joint standing committees of the General Assembly having cognizance of
matters relating to commerce and to finance, revenue and bonding each vote separately
to authorize continuance of tax credit reservations under the program.
(2) If the total amount of such credits reserved in the second year of a fiscal three-year period exceeds ninety per cent of the aggregate amount of tax credits reserved
under subsections (a) to (i), inclusive, of this section, then no additional reservation
shall be allowed for the third fiscal year of such fiscal three-year period unless the joint
standing committees of the General Assembly having cognizance of matters relating to
commerce and to finance, revenue and bonding each vote separately to authorize the
continuance of tax credit reservations under the program.
(3) Any tax credit reservations issued before a suspension of additional tax credit
reservations under subdivisions (1) and (2) of this subsection shall remain in place.
(P.A. 07-250, S. 19-21.)
History: P.A. 07-250, effective June 14, 2007, and Subsecs. (a) to (j) applicable to income years commencing on or
after January 1, 2008.
See Sec. 8-37lll re certification by Commissioner of Economic and Community Development of affordable housing
within certified historic structure.