SCS/HS/HCS/HBs 246 & 405 - This act, part of which is designated at the "Neighborhood Preservation Act", authorizes state tax credits for certain residential rehabilitation and construction costs. Taxpayers who meet certain requirements are eligible for a state tax credit of 15% of the eligible costs for a new residence. The credit is limited to no more than twenty- five thousand dollars per residence per ten-year period. Residential owners are eligible for a state tax credit of 35% of eligible costs for substantial rehabilitation, in which the costs exceed fifty percent of the fair market value of the residence prior to rehabilitation, with a minimum limit of ten thousand dollars.

The total amount of tax credits for any one year is limited to fifteen million dollars, with any unused portion to be available for the subsequent year. Total credits are to be apportioned based on the median household income of the metropolitan statistical area or nonmetropolitan area. Credits may be carried back for two years or carried forward for five years.

Taxpayers are required to submit applications for the tax credits to the Department of Economic Development. Qualified taxpayers then receive a certificate of tax credit from the Department. The tax credit may be transferred or sold with a notarized endorsement naming the transferee.

The act extends the existing affordable housing tax credits authorized through the Neighborhood Assistance Act to market rate housing in distressed communities.

The act also extends from two years to three years the time period in which a claim of refund for state taxes may be filed.

The Neighborhood Preservation Act provisions have an effective date of January 1, 2000. Portions of this act are contained in CCS#2/HS/HCS/SB 20 (TAT).
RUSS HEMBREE