CHAPTER 240

FORMERLY

HOUSE BILL NO. 442

AN ACT TO AMEND CHAPTER 18 OF TITLE 30 RELATING TO THE HISTORIC PRESERVATION TAX CREDIT.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1: Amend §1812, Title 30, Delaware Code, by striking said section in its entirety, and substituting in lieu a new §1812 to provide as follows:

Ҥ 1812. Definitions

 The following words, terms and phrases, when used in this subchapter, shall have the meanings ascribed to them herein, except where the context clearly indicates a different meaning (singular includes plural):

(1) 'Certified historic property' shall mean property located within the State that is:

a. Individually listed in the National Register of Historic Places; or

b. Located in a historic district listed in the National Register of Historic Places and certified by the United States Secretary of the Interior as contributing to the historic significance of that district; or

c. Individually designated as a historic property by local ordinance and certified by the Delaware State Historic Preservation Office as meeting the criteria for inclusion in the National Register of Historic Places; or

d. Located in a historic district set apart or registered by a local government, certified by the Delaware State Historic Preservation Office as contributing to the historic significance of such area, and certified by the Delaware State Historic Preservation Office as meeting the criteria for inclusion in the National Register.

(1) 'Certification of Completion,' 'Completion Certificate' or 'Certificate' shall mean the certificate issued by the Delaware State Historic Preservation Officer attesting that certified rehabilitation has been completed and that the documentation of qualified expenditures and project plans that would be required in order to qualify for tax credit under § 47 of the Internal Revenue Code 26 U.S.C. § 47 (whether or not such project would be eligible for such federal tax credit) has been obtained.
(3) 'Certified rehabilitation' shall mean that rehabilitation of a certified historic structure which has been certified by the Delaware State Historic Preservation Officer as a substantial rehabilitation and is in conformance with the Standards of the Secretary of the Interior for Rehabilitation (36 CFR, part 67) or such other standards as the State Historic Preservation Office shall from time to time adopt.

(4) 'Credit award' shall mean the amount of qualified expenditures as determined by the State Office as part of the Stage II Approval multiplied by the appropriate amount as determined in Section 1813 of this Chapter.

(5) 'Delaware State Historic Preservation Officer' shall mean the person designated and appointed in accordance with 16 U.S.C. § 470a(b)(1)(a), as amended.

6(6) 'Fiscal Year' shall mean the State’s fiscal year.

(7) 'Lending institution' shall mean any bank, trust company, savings and loan association, building and loan association or licensed lender that is taxable under Title 5 or taxable under Chapter 19 of this title.

(8) 'Office' or 'State Office' shall mean the Delaware State Historic Preservation Office.

(9) 'Owner-occupied historic property' shall mean any certified historic property, or any portion thereof, which is owned by a taxpayer and is being used (or within a reasonable period as may be determined by the Delaware Historic Preservation Office on a case-by-case basis will be used) by such taxpayer as the taxpayer's principal residence. Such property may consist of part of a multiple-dwelling or multiple-purpose building or series of buildings, including a cooperative or condominium. If only a portion of a building is used as the principal residence, only those qualified expenditures that are properly allocable to such portion shall be eligible under this subchapter.

(10) 'Person' shall include any individual; any form of company or corporation which is lawful within the State (including limited liability companies and S corporations), whether or not for profit; any form of partnership which is lawful within the State (including limited liability partnerships); whether or not for profit; any trust or estate, and any lawful joint venture. 'Person' shall also include any governmental entity, pass-through entity, or person under a lease contract for 5 years or longer.

(11) 'Property' shall mean real estate, and shall include any building or structure, including multiple-unit structures.

(12) 'Qualified expenditure' shall mean any amount properly expended by a person for the certified rehabilitation of a certified historic property, but shall not include:

a. Acquisition of real property, or acquiring an interest in real property;

b. Any addition to an existing structure, except where the combined square footage of all additions is 20 percent or less than the total square footage of the historic portion of the property; and each such addition is approved by the Delaware State Historic Preservation Officer, pursuant to federal guidelines, as:

1. Preserving the character-defining features of the certified historic property;

2. Adequately differentiating the new construction from the existing structure; and

3. Complying with requirements regarding safety and accessibility in a manner reasonably designed to minimize any adverse impact on the certified historic property;

c. Paving or landscaping costs which exceed 10 percent of the total qualified expenditures;

d. Sales and marketing costs; or
e. Expenditures not properly charged to a capital account, including, in the case of owner occupied property, expenditures that would not properly be charged to a capital account where the owner is using such property in a trade or business.

(13) 'Residential property' shall include cooperatives and condominiums.

(10) 'Substantial rehabilitation' shall mean rehabilitation of a certified historic property for which the qualified expenditures, during the 24-month period selected by the taxpayer and ending with or within the taxable year exceed:
a. For income-producing property, and non-income producing property other than owner-occupied historic property, the current standard required by § 47(c)(I)(C) of the Internal Revenue Code [26 U.S.C § 47(c)(I)(C)]; and

a. For owner-occupied historic property, $5,000.

(15) 'Taxpayer' shall include any 'person' as defined in this section, and shall include any individual or corporation taxable under Title 5, or taxable under either Chapter 11 or Chapter 19 of this title.”

Section 2: Amend §1813(a), Title 30, Delaware Code, by inserting the word “substantial” after the phrase “this subchapter in the” and before the phrase “rehabilitation of any certified historic property,” and by adding the a new subsection ‘(3)’ to provide as follows: “(3) In no event shall the credit claimed pursuant to this Section exceed the credit award.”

Section 3: Amend §1813(e), Title 30, Delaware Code, by adding the following sentence at the conclusion of §1813(e): “Owner occupied historic properties may be eligible for multiple certified rehabilitations, representing separate phases of rehabilitation of a certified historic property, provided however, that following an initial credit award, any subsequent credit award shall be made not less than 24 months after any preceding credit award.”

Section 4: Amend §1815(g), Title 30, Delaware Code, by striking out the phrase “Director of the Division of Revenue or the Office of the State Banking Commissioner” and replacing such phrase with the words “Division of Revenue or the State Bank Commissioner”.

Section 5: Amend § 1815(h), Title 30, Delaware Code, by striking out the phrase “Certificate of Completion” as it appears in such section and replacing such phrase with the phrase “Stage II Approval”.

Section 6. Amend § 1816(a), Title 30, Delaware Code, by adding the following sentence at the conclusion of § 1816(a): “However, should a credit award exceed the actual credit claimed, the amount of the excess credit award shall be not be available for subsequent award.”

Approved March 28, 2002