SENATE BILL No. 469

 

 

June 21, 2017, Introduced by Senators SCHMIDT, HORN, ZORN, O'BRIEN and HERTEL and referred to the Committee on Finance.

 

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

(MCL 206.1 to 206.713) by adding sections 266a and 675.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 266a. (1) A qualified taxpayer with a rehabilitation plan

 

certified after December 31, 2017 may credit against the tax

 

imposed by this part the amount determined pursuant to subsection

 

(2) for the qualified expenditures for the rehabilitation of a

 

historic resource pursuant to the rehabilitation plan in the year

 

in which the certification of completed rehabilitation of the

 

historic resource is issued. Only those expenditures that are paid

 

or incurred during the time periods prescribed for the credit under

 

section 47(a)(2) of the internal revenue code and any related

 

treasury regulations shall be considered qualified expenditures.

 

     (2) The credit allowed under this section shall be 25% of the


qualified expenditures that are eligible, or would have been

 

eligible except that the taxpayer elected to transfer the credit

 

under subsection (10), for the credit under section 47(a)(2) of the

 

internal revenue code if the taxpayer is eligible for the credit

 

under section 47(a)(2) of the internal revenue code or, if the

 

taxpayer is not eligible for the credit under section 47(a)(2) of

 

the internal revenue code, 25% of the qualified expenditures that

 

would qualify under section 47(a)(2) of the internal revenue code

 

except that the expenditures are made to a historic resource that

 

is not eligible for the credit under section 47(a)(2) of the

 

internal revenue code, subject to both of the following:

 

     (a) A taxpayer with qualified expenditures that are eligible

 

for the credit under section 47(a)(2) of the internal revenue code

 

may not claim a credit under this section for those qualified

 

expenditures unless the taxpayer has claimed and received a credit

 

for those qualified expenditures under section 47(a)(2) of the

 

internal revenue code or the taxpayer has elected to transfer the

 

credit under subsection (10).

 

     (b) A credit under this section shall be reduced by the amount

 

of a credit received by the taxpayer for the same qualified

 

expenditures under section 47(a)(2) of the internal revenue code.

 

     (3) To be eligible for the credit under this section, the

 

taxpayer shall apply to and receive from the Michigan state housing

 

development authority that the historic significance, the

 

rehabilitation plan, and the completed rehabilitation of the

 

historic resource meet the criteria under subsection (6) and either

 

of the following:


     (a) All of the following criteria:

 

     (i) The historic resource contributes to the significance of

 

the historic district in which it is located.

 

     (ii) Both the rehabilitation plan and completed rehabilitation

 

of the historic resource meet the federal secretary of the

 

interior's standards for rehabilitation and guidelines for

 

rehabilitating historic buildings, 36 CFR part 67.

 

     (iii) All rehabilitation work has been done to or within the

 

walls, boundaries, or structures of the historic resource or to

 

historic resources located within the property boundaries of the

 

resource.

 

     (b) The taxpayer has received certification from the national

 

park service that the historic resource's significance, the

 

rehabilitation plan, and the completed rehabilitation qualify for

 

the credit allowed under section 47(a)(2) of the internal revenue

 

code.

 

     (4) If a qualified taxpayer is eligible for the credit allowed

 

under section 47(a)(2) of the internal revenue code, the qualified

 

taxpayer shall file for certification with the authority to qualify

 

for the credit allowed under section 47(a)(2) of the internal

 

revenue code. If the qualified taxpayer has previously filed for

 

certification with the authority to qualify for the credit allowed

 

under section 47(a)(2) of the internal revenue code, additional

 

filing for the credit allowed under this section is not required.

 

     (5) The authority may inspect a historic resource at any time

 

during the rehabilitation process and may revoke certification of

 

completed rehabilitation if the rehabilitation was not undertaken


as represented in the rehabilitation plan or if unapproved

 

alterations to the completed rehabilitation are made during the 5

 

years after the tax year in which the credit was claimed. The

 

authority shall promptly notify the department of a revocation.

 

     (6) Qualified expenditures for the rehabilitation of a

 

historic resource may be used to calculate the credit under this

 

section if the historic resource meets 1 of the criteria listed in

 

subdivision (a) and 1 of the criteria listed in subdivision (b):

 

     (a) The resource is 1 of the following during the tax year in

 

which a credit under this section is claimed for those qualified

 

expenditures:

 

     (i) Individually listed on the National Register of Historic

 

Places or state register of historic sites.

 

     (ii) A contributing resource located within a historic

 

district listed on the National Register of Historic Places or the

 

state register of historic sites.

 

     (iii) A contributing resource located within a historic

 

district designated by a local unit pursuant to an ordinance

 

adopted under the local historic districts act, 1970 PA 169, MCL

 

399.201 to 399.215.

 

     (b) The resource meets 1 of the following criteria during the

 

tax year in which a credit under this section is claimed for those

 

qualified expenditures:

 

     (i) The historic resource is located in a designated historic

 

district in a local unit of government with an existing ordinance

 

under the local historic districts act, 1970 PA 169, MCL 399.201 to

 

399.215.


     (ii) The historic resource is located in an incorporated local

 

unit of government that does not have an ordinance under the local

 

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and

 

has a population of less than 5,000.

 

     (iii) The historic resource is located in an unincorporated

 

local unit of government.

 

     (iv) The historic resource is located in an incorporated local

 

unit of government that does not have an ordinance under the local

 

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and is

 

located within the boundaries of an association that has been

 

chartered under 1889 PA 39, MCL 455.51 to 455.72.

 

     (v) The historic resource is subject to a historic

 

preservation easement.

 

     (7) A credit amount assigned under section 675 may be claimed

 

against the partner's, member's, or shareholder's tax liability

 

under this part as provided in section 675.

 

     (8) If the credit allowed under this section for the tax year

 

and any unused carryforward of the credit allowed by this section

 

exceed the taxpayer's tax liability for the tax year, that portion

 

that exceeds the tax liability for the tax year shall not be

 

refunded but may be carried forward to offset tax liability in

 

subsequent tax years for 10 years or until used up, whichever

 

occurs first. If the credit amount allowed is less than

 

$250,000.00, a qualified taxpayer may elect to forgo the carryover

 

period and receive a refund of the amount of the credit that

 

exceeds the qualified taxpayer's tax liability. The amount of the

 

refund shall be equal to 90% of the amount of the credit that


exceeds the qualified taxpayer's tax liability. An election under

 

this subsection shall be made in the year that a certificate of

 

completed rehabilitation is issued and shall be irrevocable.

 

     (9) If a certificate of completed rehabilitation is revoked

 

under subsection (5) or if the historic resource is sold or

 

disposed of less than 5 years after being placed in service as

 

defined in section 47(b)(1) of the internal revenue code and

 

related treasury regulations, the following percentage of the

 

credit amount previously claimed relative to that historic resource

 

shall be added back to the tax liability of the qualified taxpayer

 

that received the certificate of completed rehabilitation and not

 

the assignee in the year of the revocation:

 

     (a) If the revocation is less than 1 year after the historic

 

resource is placed in service, 100%.

 

     (b) If the revocation is at least 1 year but less than 2 years

 

after the historic resource is placed in service, 80%.

 

     (c) If the revocation is at least 2 years but less than 3

 

years after the historic resource is placed in service, 60%.

 

     (d) If the revocation is at least 3 years but less than 4

 

years after the historic resource is placed in service, 40%.

 

     (e) If the revocation is at least 4 years but less than 5

 

years after the historic resource is placed in service, 20%.

 

     (f) If the revocation is at least 5 years or more after the

 

historic resource is placed in service, an addback to the qualified

 

taxpayer tax liability is required.

 

     (10) A qualified taxpayer may elect to forgo claiming the

 

credit and transfer the credit along with the ownership of the


property for which the credit may be claimed to a new owner. The

 

new owner shall be treated as the qualified taxpayer having

 

incurred the rehabilitation costs and shall be subject to the

 

recapture provisions under subsection (9) if the new owner sells or

 

disposes of the property within 5 years after the new owner

 

acquired the property. For purposes of this subsection and

 

subsection (9), the placed in service date for a new owner is the

 

date the new owner acquired the property for which the credit is

 

claimed.

 

     (11) The authority may impose a fee to cover the

 

administrative cost of implementing the program under this section.

 

     (12) The qualified taxpayer shall attach all of the following

 

to the qualified taxpayer's annual return under this part:

 

     (a) Certification of completed rehabilitation.

 

     (b) Certification of historic significance related to the

 

historic resource and the qualified expenditures used to claim a

 

credit under this section.

 

     (c) A completed assignment form if the qualified taxpayer is

 

an assignee under section 675 of any portion of a credit allowed

 

under that section.

 

     (13) The authority may promulgate rules to implement this

 

section pursuant to the administrative procedures act of 1969, 1969

 

PA 306, MCL 24.201 to 24.328.

 

     (14) The total of the credits claimed under this section and

 

section 675 for a rehabilitation project shall not exceed 25% of

 

the total qualified expenditures eligible for the credit under this

 

section for that rehabilitation project.


     (15) The authority shall report all of the following to the

 

legislature annually for the immediately preceding state fiscal

 

year:

 

     (a) The fee schedule used by the center and the total amount

 

of fees collected.

 

     (b) A description of each rehabilitation project certified.

 

     (c) The location of each new and ongoing rehabilitation

 

project.

 

     (16) As used in this section:

 

     (a) "Contributing resource" means a historic resource that

 

contributes to the significance of the historic district in which

 

it is located.

 

     (b) "Historic district" means an area, or group of areas not

 

necessarily having contiguous boundaries, that contains 1 resource

 

or a group of resources that are related by history, architecture,

 

archaeology, engineering, or culture.

 

     (c) "Historic resource" means a publicly or privately owned

 

historic building, structure, site, object, feature, or open space

 

located within a historic district designated by the National

 

Register of Historic Places, the state register of historic sites,

 

or a local unit acting under the local historic districts act, 1970

 

PA 169, MCL 399.201 to 399.215; or that is individually listed on

 

the state register of historic sites or National Register of

 

Historic Places and includes all of the following:

 

     (i) An owner-occupied personal residence or a historic

 

resource located within the property boundaries of that personal

 

residence.


     (ii) An income-producing commercial, industrial, or

 

residential resource or a historic resource located within the

 

property boundaries of that resource.

 

     (iii) A resource owned by a governmental body, nonprofit

 

organization, or tax-exempt entity that is used primarily by a

 

taxpayer lessee in a trade or business unrelated to the

 

governmental body, nonprofit organization, or tax-exempt entity and

 

that is subject to tax under this part.

 

     (iv) A resource that is occupied or utilized by a governmental

 

body, nonprofit organization, or tax-exempt entity pursuant to a

 

long-term lease or lease with option to buy agreement.

 

     (v) Any other resource that could benefit from rehabilitation.

 

     (d) "Local unit" means a county, city, village, or township.

 

     (e) "Long-term lease" means a lease term of at least 27.5

 

years for a residential resource or at least 31.5 years for a

 

nonresidential resource.

 

     (f) "Michigan state housing development authority" or

 

"authority" means the public body corporate and politic created by

 

section 21 of the state housing development authority act of 1966,

 

1966 PA 346, MCL 125.1421.

 

     (g) "Open space" means undeveloped land, a naturally

 

landscaped area, or a formal or man-made landscaped area that

 

provides a connective link or a buffer between other resources.

 

     (h) "Person" means an individual, partnership, corporation,

 

association, governmental entity, or other legal entity.

 

     (i) "Qualified expenditures" means capital expenditures that

 

qualify, or would qualify except that the taxpayer elected to


transfer the credit under subsection (10), for a rehabilitation

 

credit under section 47(a)(2) of the internal revenue code if the

 

taxpayer is eligible for the credit under section 47(a)(2) of the

 

internal revenue code or, if the taxpayer is not eligible for the

 

credit under section 47(a)(2) of the internal revenue code, the

 

qualified expenditures that would qualify under section 47(a)(2) of

 

the internal revenue code except that the expenditures are made to

 

a historic resource that is not eligible for the credit under

 

section 47(a)(2) of the internal revenue code, that were paid.

 

Qualified expenditures do not include capital expenditures for

 

nonhistoric additions to a historic resource except an addition

 

that is required by state or federal regulations that relate to

 

historic preservation, safety, or accessibility.

 

     (j) "Qualified taxpayer" means a person that is an assignee

 

under section 675 or either owns the resource to be rehabilitated

 

or has a long-term lease agreement with the owner of the historic

 

resource and that has qualified expenditures for the rehabilitation

 

of the historic resource equal to or greater than 10% of the state

 

equalized valuation of the property. If the historic resource to be

 

rehabilitated is a portion of a historic or nonhistoric resource,

 

the state equalized valuation of only that portion of the property

 

shall be used for purposes of this subdivision. If the assessor for

 

the local tax collecting unit in which the historic resource is

 

located determines the state equalized valuation of that portion,

 

that assessor's determination shall be used for purposes of this

 

subdivision. If the assessor does not determine that state

 

equalized valuation of that portion, qualified expenditures, for


purposes of this subdivision, shall be equal to or greater than 5%

 

of the appraised value as determined by a certified appraiser. If

 

the historic resource to be rehabilitated does not have a state

 

equalized valuation, qualified expenditures for purposes of this

 

subdivision shall be equal to or greater than 5% of the appraised

 

value of the resource as determined by a certified appraiser.

 

     (k) "Rehabilitation plan" means a plan for the rehabilitation

 

of a historic resource that meets the federal Secretary of the

 

Interior's standards for rehabilitation and guidelines for

 

rehabilitation of historic buildings under 36 CFR part 67.

 

     Sec. 675. (1) A qualified taxpayer with a rehabilitation plan

 

certified after December 31, 2017 may credit against the tax

 

imposed by this part the amount determined pursuant to subsection

 

(2) for the qualified expenditures for the rehabilitation of a

 

historic resource pursuant to the rehabilitation plan in the year

 

in which the certification of completed rehabilitation of the

 

historic resource is issued. Only those expenditures that are paid

 

or incurred during the time periods prescribed for the credit under

 

section 47(a)(2) of the internal revenue code and any related

 

treasury regulations shall be considered qualified expenditures.

 

     (2) The credit allowed under this subsection shall be 25% of

 

the qualified expenditures that are eligible, or would have been

 

eligible except that the taxpayer entered into an agreement under

 

subsection (10), for the credit under section 47(a)(2) of the

 

internal revenue code if the taxpayer is eligible for the credit

 

under section 47(a)(2) of the internal revenue code or, if the

 

taxpayer is not eligible for the credit under section 47(a)(2) of


the internal revenue code, 25% of the qualified expenditures that

 

would qualify under section 47(a)(2) of the internal revenue code

 

except that the expenditures are made to a historic resource that

 

is not eligible for the credit under section 47(a)(2) of the

 

internal revenue code, subject to both of the following:

 

     (a) A taxpayer with qualified expenditures that are eligible

 

for the credit under section 47(a)(2) of the internal revenue code

 

may not claim a credit under this section for those qualified

 

expenditures unless the taxpayer has claimed and received a credit

 

for those qualified expenditures under section 47(a)(2) of the

 

internal revenue code or the taxpayer has entered into an agreement

 

under subsection (10).

 

     (b) A credit under this subsection shall be reduced by the

 

amount of a credit received by the taxpayer for the same qualified

 

expenditures under section 47(a)(2) of the internal revenue code.

 

     (3) To be eligible for the credit under subsection (2), the

 

taxpayer shall apply to and receive from the Michigan state housing

 

development authority that the historic significance, the

 

rehabilitation plan, and the completed rehabilitation of the

 

historic resource meet the criteria under subsection (6) and either

 

of the following:

 

     (a) All of the following criteria:

 

     (i) The historic resource contributes to the significance of

 

the historic district in which it is located.

 

     (ii) Both the rehabilitation plan and completed rehabilitation

 

of the historic resource meet the federal Secretary of the

 

Interior's standards for rehabilitation and guidelines for


rehabilitating historic buildings, 36 CFR part 67.

 

     (iii) All rehabilitation work has been done to or within the

 

walls, boundaries, or structures of the historic resource or to

 

historic resources located within the property boundaries of the

 

property.

 

     (b) The taxpayer has received certification from the National

 

Park Service that the historic resource's significance, the

 

rehabilitation plan, and the completed rehabilitation qualify for

 

the credit allowed under section 47(a)(2) of the internal revenue

 

code.

 

     (4) If a qualified taxpayer is eligible for the credit allowed

 

under section 47(a)(2) of the internal revenue code, the qualified

 

taxpayer shall file for certification with the authority to qualify

 

for the credit allowed under section 47(a)(2) of the internal

 

revenue code. If the qualified taxpayer has previously filed for

 

certification with the authority to qualify for the credit allowed

 

under section 47(a)(2) of the internal revenue code, additional

 

filing for the credit allowed under this section is not required.

 

     (5) The authority may inspect a historic resource at any time

 

during the rehabilitation process and may revoke certification of

 

completed rehabilitation if the rehabilitation was not undertaken

 

as represented in the rehabilitation plan or if unapproved

 

alterations to the completed rehabilitation are made during the 5

 

years after the tax year in which the credit was claimed. The

 

authority shall promptly notify the department of a revocation.

 

     (6) Qualified expenditures for the rehabilitation of a

 

historic resource may be used to calculate the credit under this


section if the historic resource meets 1 of the criteria listed in

 

subdivision (a) and 1 of the criteria listed in subdivision (b):

 

     (a) The resource is 1 of the following during the tax year in

 

which a credit under this section is claimed for those qualified

 

expenditures:

 

     (i) Individually listed on the National Register of Historic

 

Places or state register of historic sites.

 

     (ii) A contributing resource located within a historic

 

district listed on the National Register of Historic Places or the

 

state register of historic sites.

 

     (iii) A contributing resource located within a historic

 

district designated by a local unit pursuant to an ordinance

 

adopted under the local historic districts act, 1970 PA 169, MCL

 

399.201 to 399.215.

 

     (b) The resource meets 1 of the following criteria during the

 

tax year in which a credit under this section is claimed for those

 

qualified expenditures:

 

     (i) The historic resource is located in a designated historic

 

district in a local unit of government with an existing ordinance

 

under the local historic districts act, 1970 PA 169, MCL 399.201 to

 

399.215.

 

     (ii) The historic resource is located in an incorporated local

 

unit of government that does not have an ordinance under the local

 

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and

 

has a population of less than 5,000.

 

     (iii) The historic resource is located in an unincorporated

 

local unit of government.


     (iv) The historic resource is located in an incorporated local

 

unit of government that does not have an ordinance under the local

 

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and is

 

located within the boundaries of an association that has been

 

chartered under 1889 PA 39, MCL 455.51 to 455.72.

 

     (v) The historic resource is subject to a historic

 

preservation easement.

 

     (7) A qualified taxpayer may assign all or any portion of the

 

credit allowed under this section. A credit assignment under this

 

subsection is irrevocable and shall be made in the tax year in

 

which a certificate of completed rehabilitation is issued. A

 

qualified taxpayer may claim a portion of a credit and assign the

 

remaining amount. If the qualified taxpayer both claims and assigns

 

portions of the credit, the qualified taxpayer shall claim the

 

portion it claims in the tax year in which a certificate of

 

completed rehabilitation is issued pursuant to this section. An

 

assignee may subsequently assign the credit or any portion of the

 

credit assigned under this subsection to 1 or more assignees. An

 

assignment or subsequent reassignment of a credit can be made in

 

the year the certificate of completed rehabilitation is issued. A

 

credit assignment or subsequent reassignment under this section

 

shall be made on a form prescribed by the department. The

 

department or its designee shall review and issue a completed

 

assignment or reassignment certificate to the assignee or

 

reassignee. A credit amount assigned under this subsection may be

 

claimed against the assignees' tax under this part or part 1. An

 

assignee or subsequent reassignee shall attach a copy of the


completed assignment certificate to the annual return required to

 

be filed under this part for the tax year in which the assignment

 

or reassignment is made and the assignee or reassignee first claims

 

the credit, which shall be the same tax year.

 

     (8) If the credit allowed under this section for the tax year

 

and any unused carryforward of the credit allowed by this section

 

exceed the taxpayer's tax liability for the tax year, that portion

 

that exceeds the tax liability for the tax year shall not be

 

refunded but may be carried forward to offset tax liability in

 

subsequent tax years for 10 years or until used up, whichever

 

occurs first. If a qualified taxpayer has an unused carryforward of

 

a credit under this section, the amount otherwise added under

 

subsection (9) to the qualified taxpayer's tax liability may

 

instead be used to reduce the qualified taxpayer's carryforward

 

under this section. If the credit amount allowed is less than

 

$250,000.00, a qualified taxpayer may elect to forgo the carryover

 

period and receive a refund of the amount of the credit that

 

exceeds the qualified taxpayer's tax liability. The amount of the

 

refund shall be equal to 90% of the amount of the credit that

 

exceeds the qualified taxpayer's tax liability. An election under

 

this subsection shall be made in the year that a certificate of

 

completed rehabilitation is issued and shall be irrevocable.

 

     (9) Except as otherwise provided under subsection (10), if a

 

certificate of completed rehabilitation is revoked under subsection

 

(5) or a historic resource is sold or disposed of less than 5 years

 

after the historic resource is placed in service as defined in

 

section 47(b)(1) of the internal revenue code and related treasury


regulations, the following percentage of the credit amount

 

previously claimed relative to that historic resource shall be

 

added back to the tax liability of the qualified taxpayer that

 

received the certificate of completed rehabilitation and not the

 

assignee in the year of the revocation:

 

     (a) If the revocation is less than 1 year after the historic

 

resource is placed in service, 100%.

 

     (b) If the revocation is at least 1 year but less than 2 years

 

after the historic resource is placed in service, 80%.

 

     (c) If the revocation is at least 2 years but less than 3

 

years after the historic resource is placed in service, 60%.

 

     (d) If the revocation is at least 3 years but less than 4

 

years after the historic resource is placed in service, 40%.

 

     (e) If the revocation is at least 4 years but less than 5

 

years after the historic resource is placed in service, 20%.

 

     (f) If the revocation is at least 5 years or more after the

 

historic resource is placed in service, an addback to the qualified

 

taxpayer tax liability shall not be required.

 

     (10) Subsection (9) shall not apply if the qualified taxpayer

 

enters into a written agreement with the authority that will allow

 

for the transfer or sale of the historic resource and provides the

 

following:

 

     (a) Reasonable assurance that subsequent to the transfer the

 

property will remain a historic resource during the 5-year period

 

after the historic resource is placed in service.

 

     (b) A method that the department can recover an amount from

 

the taxpayer equal to the appropriate percentage of credit added


back as described under subsection (9).

 

     (c) An encumbrance on the title to the historic resource being

 

sold or transferred, stating that the property must remain a

 

historic resource throughout the 5-year period after the historic

 

resource is placed in service.

 

     (d) A provision for the payment by the taxpayer of all legal

 

and professional fees associated with the drafting, review, and

 

recording of the written agreement required under this subsection.

 

     (11) The authority may impose a fee to cover the

 

administrative cost of implementing the program under this section.

 

     (12) The qualified taxpayer shall attach all of the following

 

to the qualified taxpayer's annual return required under this part,

 

if applicable, on which the credit is claimed:

 

     (a) Certification of completed rehabilitation.

 

     (b) Certification of historic significance related to the

 

historic resource and the qualified expenditures used to claim a

 

credit under this section.

 

     (c) A completed assignment form if the qualified taxpayer or

 

assignee has assigned any portion of a credit allowed under this

 

section or if the taxpayer is an assignee of any portion of a

 

credit allowed under this section.

 

     (13) The authority may promulgate rules to implement this

 

section pursuant to the administrative procedures act of 1969, 1969

 

PA 306, MCL 24.201 to 24.328.

 

     (14) The total of the credits claimed under subsection (2) and

 

section 266a for a rehabilitation project shall not exceed 25% of

 

the total qualified expenditures eligible for the credit under


subsection (2) for that rehabilitation project.

 

     (15) The authority shall report all of the following to the

 

legislature annually for the immediately preceding state fiscal

 

year:

 

     (a) The fee schedule used by the authority and the total

 

amount of fees collected.

 

     (b) A description of each rehabilitation project certified.

 

     (c) The location of each new and ongoing rehabilitation

 

project.

 

     (16) As used in this section:

 

     (a) "Contributing resource" means a historic resource that

 

contributes to the significance of the historic district in which

 

it is located.

 

     (b) "Historic district" means an area, or group of areas not

 

necessarily having contiguous boundaries, that contains 1 resource

 

or a group of resources that are related by history, architecture,

 

archaeology, engineering, or culture.

 

     (c) "Historic resource" means a publicly or privately owned

 

historic building, structure, site, object, feature, or open space

 

located within a historic district designated by the National

 

Register of Historic Places, the state register of historic sites,

 

or a local unit acting under the local historic districts act, 1970

 

PA 169, MCL 399.201 to 399.215, or that is individually listed on

 

the state register of historic sites or National Register of

 

Historic Places, and includes all of the following:

 

     (i) An owner-occupied personal residence or a historic

 

resource located within the property boundaries of that personal


residence.

 

     (ii) An income-producing commercial, industrial, or

 

residential resource or a historic resource located within the

 

property boundaries of that resource.

 

     (iii) A resource owned by a governmental body, nonprofit

 

organization, or tax-exempt entity that is used primarily by a

 

taxpayer lessee in a trade or business unrelated to the

 

governmental body, nonprofit organization, or tax-exempt entity and

 

that is subject to tax under this act.

 

     (iv) A resource that is occupied or utilized by a governmental

 

body, nonprofit organization, or tax-exempt entity pursuant to a

 

long-term lease or lease with option to buy agreement.

 

     (v) Any other resource that could benefit from rehabilitation.

 

     (d) "Local unit" means a county, city, village, or township.

 

     (e) "Long-term lease" means a lease term of at least 27.5

 

years for a residential resource or at least 31.5 years for a

 

nonresidential resource.

 

     (f) "Michigan state housing development authority" or

 

"authority" means the public body corporate and politic created by

 

section 21 of the state housing development authority act of 1966,

 

1966 PA 346, MCL 125.1421.

 

     (g) "Open space" means undeveloped land, a naturally

 

landscaped area, or a formal or man-made landscaped area that

 

provides a connective link or a buffer between other resources.

 

     (h) "Person" means an individual, partnership, corporation,

 

association, governmental entity, or other legal entity.

 

     (i) "Qualified expenditures" means capital expenditures that


qualify, or would qualify except that the taxpayer entered into an

 

agreement under subsection (10), for a rehabilitation credit under

 

section 47(a)(2) of the internal revenue code if the taxpayer is

 

eligible for the credit under section 47(a)(2) of the internal

 

revenue code or, if the taxpayer is not eligible for the credit

 

under section 47(a)(2) of the internal revenue code, the qualified

 

expenditures that would qualify under section 47(a)(2) of the

 

internal revenue code except that the expenditures are made to a

 

historic resource that is not eligible for the credit under section

 

47(a)(2) of the internal revenue code that were paid. Qualified

 

expenditures do not include capital expenditures for nonhistoric

 

additions to a historic resource except an addition that is

 

required by state or federal regulations that relate to historic

 

preservation, safety, or accessibility.

 

     (j) "Qualified taxpayer" means a person that either owns the

 

resource to be rehabilitated or has a long-term lease agreement

 

with the owner of the historic resource and that has qualified

 

expenditures for the rehabilitation of the historic resource equal

 

to or greater than 10% of the state equalized valuation of the

 

property. If the historic resource to be rehabilitated is a portion

 

of a historic or nonhistoric resource, the state equalized

 

valuation of only that portion of the property shall be used for

 

purposes of this subdivision. If the assessor for the local tax

 

collecting unit in which the historic resource is located

 

determines the state equalized valuation of that portion, that

 

assessor's determination shall be used for purposes of this

 

subdivision. If the assessor does not determine that state


equalized valuation of that portion, qualified expenditures, for

 

purposes of this subdivision, shall be equal to or greater than 5%

 

of the appraised value as determined by a certified appraiser. If

 

the historic resource to be rehabilitated does not have a state

 

equalized valuation, qualified expenditures for purposes of this

 

subdivision shall be equal to or greater than 5% of the appraised

 

value of the resource as determined by a certified appraiser.

 

     (k) "Rehabilitation plan" means a plan for the rehabilitation

 

of a historic resource that meets the federal Secretary of the

 

Interior's standards for rehabilitation and guidelines for

 

rehabilitation of historic buildings under 36 CFR part 67.