Session of 2000
By Representative Kuether

  9             AN  ACT relating to historic preservation; concerning tax credits; amend-
10             ing K.S.A. 75-2716 and repealing the existing section.
12       Be it enacted by the Legislature of the State of Kansas:
13             New Section  1. (a) For all taxable years commencing after Decem-
14       ber 31, 1999, there shall be allowed a 25% tax credit against the income
15       tax liability imposed upon a taxpayer pursuant to the Kansas income tax
16       act for the restoration and preservation of historic property by a taxpayer
17       who is:
18             (1) The owner of the property and who incurs qualified costs in an
19       amount equaling or exceeding $5,000; or
20             (2) allowed a credit for costs incurred in the rehabilitation of Kansas
21       property pursuant to section 38 of the federal internal revenue code of
22       1986.
23             (b) If the amount of such tax credit exceeds the total state income
24       tax liability for the year in which the costs and expenses were incurred
25       for the rehabilitation of property which is a registered state or federal
26       historic structure or federal historic district, such excess amount may be
27       carried over for deduction from the taxpayer's state income tax liability
28       in the next succeeding taxable year or years until the total amount of the
29       tax credit has been deducted from tax liability, except that no such tax
30       credit shall be carried over for deduction after the 10th taxable year suc-
31       ceeding the taxable year in which the expenditures were made.
32             (c) To qualify for the state income tax credit, a structure shall:
33             (1) Have historic value;
34             (2) have historic architectural value; or
35             (3) be designated as:
36             (A) Contributing features to national register districts; or
37             (B) a landmark; and
38             (4) listed or eligible for listing individually on the national register of
39       historic places or the state register of historic places.
40             New Sec.  2. (a) Except as otherwise provided in subsection (c), in
41       order for any taxpayer to prequalify for the credit provided in this section
42       the taxpayer on forms developed by the agency shall:
43             (1) Submit to the cultural resources division of the state historic pres-


  1       ervation office, a fee determined by the agency, but not exceeding $100;
  2             (2) submit documentation verifying that the structure is or is eligible
  3       to be on the state register of historic places;
  4             (3) submit plans and specifications for such proposed restoration, re-
  5       habilitation or preservation; and
  6             (4) submit a signed agreement, if required, as specified in subsection
  7       (b).
  8             (b) When more than one taxpayer qualifies for the tax credit provided
  9       for in section 1, the amount of the tax credit allowed shall be divided pro
10       rata according to the number of such taxpayers, unless a binding agree-
11       ment signed by all of the eligible taxpayers has been filed with the division
12       which specifies the manner in which the amount of the tax credit allowed
13       is to be divided among such taxpayers.
14             (c) Nothing shall preclude the state income tax credit in subsection
15       (b) from being allocated among the taxpayers in a manner different than
16       the allocation of any credit claimed under section 38 of the federal inter-
17       nal revenue code.
18             New Sec.  3. (a) When the division approves the application a notice
19       of preliminary approval shall be sent to the applicant along with a state-
20       ment that the approved preservation must be completed within 24
21       months from the date of preliminary approval.
22             (b) If more than one taxpayer is involved in the project as in subsec-
23       tions (b) and (c) of section 2, and amendments thereto, the division shall
24       issue the notice in subsection (a) to each taxpayer.
25             (c) The division upon request of the applicant and upon good cause
26       shown may issue a one time extension of the project's completion dead-
27       line. The extension shall be for a period of time not to exceed 24 months.
28             New Sec.  4. (a) Upon submission to the division of an accounting of
29       the total qualified costs incurred in the project, the names of the owners
30       who incurred such costs, the payment of a fee in an amount determined
31       under subsection (c) of section 9, and amendments thereto, and a deter-
32       mination by the division that the completed project: (1) Conforms to the
33       plans and specifications approved under section 2; (2) was completed
34       within the approved time frame; and (3) conforms to the United States
35       secretary of the interior's standards for rehabilitation; the division shall
36       issue a certificate of eligibility specifying the amount of the tax credit the
37       taxpayer is permitted to claim. When claiming the state tax credit, the
38       taxpayer shall attach the certificate to the taxpayer's state income tax
39       return.
40             (b) The provisions of subsection (a) shall not apply to any taxpayer
41       who has already met the criteria for rehabilitation under section 38 of the
42       federal internal revenue code.
43             New Sec.  5. (a) Qualified rehabilitation expenses which the eligible


  1       taxpayer may include, but is not limited to, should include: Structural
  2       repair; sheet rock, plaster, fire sprinkler systems; repair, refinishing or
  3       replacement of architectural features on the interior and exterior includ-
  4       ing fixtures, doors, windows, ceilings and carpentry; heating and air con-
  5       ditioning repair or replacement; electrical repair or replacement; tuck-
  6       pointing, cleaning, roofing and flashing; architectural and engineering
  7       fees and costs incurred to meet building and safety codes.
  8             (b) Enlargement costs and site work that take place outside the foot-
  9       print of the building do not qualify for the credit.
10             (c) Acquisition costs, interior furnishings, excavation grading, paving,
11       landscaping, routine or periodic maintenance, repairs to outbuildings
12       which are associated with the property but are less than 50 years old are
13       not included.
14             (d) All work on the project must meet the United States secretary of
15       the interior's standards for rehabilitation.
16             (e) While the project is worked on the division may, at any time,
17       designate a reviewing entity to review the project and to ensure that it
18       meets the United States secretary of the interior's standards for
19       rehabilitation.
20             New Sec.  6. (a) Any taxpayer who has repaid money under subsec-
21       tion (b) shall no longer be eligible to carry forward any amount of the
22       credit which has not been used as of the date the repayment is made.
23             (b) Notwithstanding any law to the contrary, if an eligible taxpayer
24       who has claimed the tax credit sells the qualified property within five
25       years after the completion of the project, such taxpayer shall repay to the
26       state a portion of the amount of credit which has been used to offset the
27       taxpayer's income tax in the following amounts:
28             (1) Within the first year, 100% of the amount of the credit allowed;
29             (2) within the second year, 80% of the amount of the credit allowed;
30             (3) within the third year, 60% of the amount of the credit allowed;
31             (4) within the fourth year, 40% of the amount of the credit allowed;
32       and
33             (5) within the fifth year, 20% of the amount of the credit allowed.
34             New Sec.  7. The secretary of state shall adopt rules and regulations
35       to implement the criteria, duties and procedures necessary to implement
36       this act.
37             New Sec.  8. The state historical preservation officer, designated un-
38       der K.S.A. 75-2717, and amendments thereto, shall certify any local gov-
39       ernment which meets the provisions of 16 U.S.C. 470a(c) and criteria
40       established by rules and regulations under this act.
41             New Sec.  9. (a) Prior to January 1, 2001, and annually thereafter,
42       each certified local government shall adopt a resolution stating whether
43       that local government will act as a reviewing entity for the purposes of


  1       sections 4 through 12, and amendments thereto, during the following 12
  2       months. A copy of the resolution shall be sent to the state historic pres-
  3       ervation office prior to January of each year.
  4             (b) Any certified local government which resolves to act as a review-
  5       ing entity for any given year shall be required to perform all duties and
  6       responsibilities required by the state historical preservation office con-
  7       cerning rehabilitation projects which received the notice of preliminary
  8       approval under section 3, and amendments thereto.
  9             (c) Upon submission of the required materials under sections 4 and
10       5, and amendments thereto, to obtain the certificate stating the amount
11       of tax credit the taxpayer may claim, the taxpayer shall pay an amount
12       equal to the appropriate amount determined by the following schedule
13       minus the fee amount paid under section 2, and amendments thereto:
14       Amount of qualified costs incurred Amount of fee
15       $5,000 up to and including $15,000 $250
16       $15,001 up to and including $50,000 $500
17       $50,001 up to and including $100,000 $750
18       Over $100,000 $1,000
19             (d) A portion of the fees collected under this section shall be trans-
20       ferred by the state treasurer to the reviewing entity's preservation fund
21       as payment for such entity's services.
22             New Sec.  10. (a) Any certified local government which is designated
23       to act as a reviewing entity for the purposes of this act shall create a
24       preservation fund. The moneys in such fund shall be used for expendi-
25       tures of such certified government incurred in the performance of its
26       duties.
27             (b) All fees collected under sections 2 and 5, and amendments
28       thereto, by the cultural division of the state historic preservation office
29       shall be transmitted at least monthly to the state treasurer.
30             New Sec.  11. There is hereby established in the state treasury a pres-
31       ervation fee fund which shall be administered by the state treasurer. Upon
32       receipt of any such remittance the state treasurer shall deposit the entire
33       amount thereof in the state treasury and the same shall be credited to
34       the preservation fee fund. All expenditures from such fund shall be made
35       in accordance with appropriation acts and upon warrants of the director
36       of accounts and reports issued pursuant to vouchers approved by the
37       division of cultural resources or a person designated by the state historic
38       preservation office. All moneys deposited in the preservation fee fund
39       shall be used for the purpose of expenditures incurred by the division,
40       agency and reviewing entity in the administration of this act.
41             Sec.  12. K.S.A. 75-2716 is hereby amended to read as follows: 75-
42       2716. As used in this act, unless the context otherwise requires:
43             (a) "Agency" means the state historic preservation agency.


  1             (b) "Division" means the cultural resources division of the state his-
  2       torical preservation office.
  3             (c) "Certified local government" means any local government certified
  4       by the state historical preservation office pursuant to 16 U.S.C. 470a(1).
  5             (d) "Contributing property" means property which by location, de-
  6       sign, setting, materials, workmanship, feeling and association adds to the
  7       sense of time, place and historical development of a historic district.
  8             (e) "Division" means the cultural resources division of the state his-
  9       torical preservation office.
10             (a)(f) "Historic preservation" means the study, identification, protec-
11       tion, restoration and rehabilitation of buildings, structures, objects, dis-
12       tricts, areas and sites significant in the history, architecture, archeology
13       or culture of the state of Kansas, its communities or the nation.
14             (b)(g) "Historic property" means any building, structure, object, dis-
15       trict, area or site that is significant in the history, architecture, archeology
16       or culture of the state of Kansas, its communities or the nation.
17             (e)(h) "Person" means any individual, firm, association, organization,
18       partnership, business, trust, corporation or company.
19             (c)(i) "Project" includes: (1) Activities directly undertaken by the
20       state or any political subdivision of the state, or any instrumentality
21       thereof;
22             (2) activities undertaken by a person which are supported in whole
23       or in part through grants, subsidies, loans or other forms of financial
24       assistance from the state or, any political subdivision of the state, or any
25       instrumentality thereof of the state or any person; and
26             (3) activities involving the issuance of a lease, permit, license, certif-
27       icate or other entitlement for use, to any person by the state or any po-
28       litical subdivision of the state, or any instrumentality thereof.
29             (j) "Property" means a building or structure or a unit of a multi-unit
30       building where such units are individually owned.
31             (k) "Qualified property" means property located in Kansas which is:
32             (1)(A) At least 50 years old; and
33             (B) listed individually or as contributing property in a district listed
34       on the national register of historic places or state register of historic places;
35       or
36             (C) deemed eligible to be listed on the national register of historic
37       places or state register of historic places;
38             (2) designated as a landmark by a certified local government; or
39             (3) listed as a contributing property within a designated historic dis-
40       trict of a certified local government.
41             (l) "Qualified rehabilitation" means any exterior improvements,
42       structural improvements, mechanical improvements, plumbing improve-
43       ments, or electrical improvements undertaken to restore, rehabilitate or


  1       preserve the historic character of a qualified property which meets the
  2       standards of rehabilitation of the United States secretary of the interior
  3       as adopted by the state historic preservation officer and certified local
  4       governments pursuant to federal law but shall not include any improve-
  5       ments undertaken due to normal wear and tear.
  6             (m) "Reviewing entity" means:
  7             (1) A certified local government; or
  8             (2) the state historic preservation officer when the qualified property
  9       is not located within the jurisdiction of any certified local government.
10             (d)(n) "State or any political subdivision of the state" means the state
11       of Kansas, any office, department, agency, authority, bureau, commission,
12       board, institution, hospital, college or university of the state, or any
13       county, township, city, school district, special district, regional agency,
14       redevelopment agency or any other political subdivision of the state.
15             (e) "Person" means any individual, firm, association, organization,
16       partnership, business, trust, corporation or company.
17             (o) "State historic preservation officer" means the person designated
18       and appointed pursuant to 16 U.S.C. 470a(b)(1)(A) and K.S.A. 75-2717,
19       and amendments thereto. 
20       Sec.  13. K.S.A. 75-2716 is hereby repealed.
21        Sec.  14. This act shall take effect and be in force from and after its
22       publication in the statute book.