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SENATE BILL No. 227
AN A CT concerning economic development; relating to the tax credit for qualified
expenditures for the restoration and preservation of historic structures; providing for
different credit percentages based on city populations of more than 50,000 or 50,000
or less and the amount of expenditures; amending K.S.A. 2024 Supp. 79-32,211 and
repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2024 Supp. 79-32,211 is hereby amended to
read as follows: 79-32,211. (a) For all taxable years commencing after
December 31, 2006, there shall be allowed a tax credit against the
income, privilege or premium tax liability imposed upon a taxpayer
pursuant to the Kansas income tax act, the privilege tax imposed upon
any national banking association, state bank, trust company or savings
and loan association pursuant to article 11 of chapter 79 of the Kansas
Statutes Annotated, and amendments thereto, or the premiums tax and
privilege fees imposed upon an insurance company pursuant to K.S.A.
40-252, and amendments thereto, in an amount equal to:
(1) 25% of qualified expenditures incurred in the restoration and
preservation of a qualified historic structure located in a city with a
population of more than 50,000 pursuant to a qualified rehabilitation
plan by a qualified taxpayer if the total amount of such expenditures
equals at least $5,000 or more and less than $50,000;
(2) 30%40% of the qualified expenditures incurred in the
restoration and preservation of a qualified historic structure located in a
city with a population between 9,500 and of more than 50,000 pursuant
to a qualified rehabilitation plan by a qualified taxpayer if the total
amount of such expenditures equals $5,000 $50,000 or more;
(3) 40% of the qualified expenditures incurred in the restoration
and preservation of a qualified historic structure located in a city,
township or unincorporated area with a population of 50,000 or less
than 9,500 pursuant to a qualified rehabilitation plan by a qualified
taxpayer if the total amount of such expenditures equals $5,000 or
more; or
(4) 30%40% of qualified expenditures incurred in the restoration
and preservation of a qualified historic structure which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code and which is not income producing pursuant to a
qualified rehabilitation plan by a qualified taxpayer if the total amount
of such expenditures equals $5,000 or more.
(b) If the amount of such tax credit exceeds the qualified
taxpayer's income, privilege or premium tax liability for the year in
which the qualified rehabilitation plan was placed in service, as defined
by section 47(b)(1) of the federal internal revenue code and federal
regulation section 1.48-12(f)(2), such excess amount may be carried
over for deduction from such taxpayer's income, privilege or premium
tax liability in the next succeeding year or years until the total amount
of the credit has been deducted from tax liability, except that no such
credit shall be carried over for deduction after the 10 th taxable year
succeeding the taxable year in which the qualified rehabilitation plan
was placed in service.
(c) Any bank, savings and loan association or savings bank shall
pay taxes on 50% of the interest earned on loans to qualified taxpayers
used for qualified expenditures for the restoration and preservation of a
qualified historic structure.
(d) As used in this section, unless the context clearly indicates
otherwise:
(1) "Qualified expenditures" means the costs and expenses
incurred by a qualified taxpayer in the restoration and preservation of a
qualified historic structure pursuant to a qualified rehabilitation plan
which are defined as a qualified rehabilitation expenditure by section
SENATE BILL No. 227—page 2
47(c)(2) of the federal internal revenue code;
(2) "qualified historic structure" means any building, whether or
not income producing, which is defined as a certified historic structure
by section 47(c)(3) of the federal internal revenue code, is individually
listed on the register of Kansas historic places, or is located and
contributes to a district listed on the register of Kansas historic places;
(3) "qualified rehabilitation plan" means a project which is
approved by the cultural resources division of the state historical
society, or by a local government certified by the division to so
approve, as being consistent with the standards for rehabilitation and
guidelines for rehabilitation of historic buildings as adopted by the
federal secretary of interior and in effect on the effective date of this
act. The society shall adopt rules and regulations providing application
and approval procedures necessary to effectively and efficiently
provide compliance with this act, and may collect fees in order to
defray its approval costs in accordance with rules and regulations
adopted therefor; and
(4) "qualified taxpayer" means the owner of the qualified historic
structure or any other person who may qualify for the federal
rehabilitation credit allowed by section 47 of the federal internal
revenue code.
If the taxpayer is a corporation having an election in effect under
subchapter S of the federal internal revenue code, a partnership or a
limited liability company, the credit provided by this section shall be
claimed by the shareholders of such corporation, the partners of such
partnership or the members of such limited liability company in the
same manner as such shareholders, partners or members account for
their proportionate shares of the income or loss of the corporation,
partnership or limited liability company, or as the corporation,
partnership or limited liability company mutually agree as provided in
the bylaws or other executed agreement. Credits granted to a
partnership, a limited liability company taxed as a partnership or other
multiple owners of property shall be passed through to the partners,
members or owners respectively pro rata or pursuant to an executed
agreement among the partners, members or owners documenting any
alternate distribution method.
(e) Any person, hereinafter designated the assignor, may sell,
assign, convey or otherwise transfer tax credits allowed and earned
pursuant to subsection (a). The taxpayer acquiring credits, hereinafter
designated the assignee, may use the amount of the acquired credits to
offset up to 100% of such assignee's income, privilege or premiums tax
liability for either the taxable year in which the qualified rehabilitation
plan was first placed into service or the taxable year in which such
acquisition was made. Unused credit amounts claimed by the assignee
may be carried forward for up to five years, except that all such
amounts shall be claimed within 10 years following the tax year in
which the qualified rehabilitation plan was first placed into service. The
assignor shall enter into a written agreement with the assignee
establishing the terms and conditions of the agreement and shall perfect
such transfer by notifying the cultural resources division of the state
historical society in writing within 90 calendar days following the
effective date of the transfer and shall provide any information as may
be required by such division to administer and carry out the provisions
of this section. The amount received by the assignor of such tax credit
shall be taxable as income of the assignor, and the excess of the value
of such credit over the amount paid by the assignee for such credit shall
be taxable as income of the assignee.
(f) The executive director of the state historical society may adopt
rules and regulations as necessary for the efficient and effective
SENATE BILL No. 227—page 3
administration of the provisions of this section.
(g) The amendments made to this section by this act related to tax
credit amounts shall apply to qualified rehabilitation plans placed into
service on or after July 1, 2025.
(h) Before the issuance of a tax credit pursuant to this section, the
department of revenue may verify that the qualified taxpayer does not
owe any delinquent income, privilege, premium, sales or compensating
use taxes, or interest, additions or penalties on such taxes to the state.
Such delinquency shall not affect the issuance of a tax credit, except
that the amount of credits issued shall be reduced by the qualified
taxpayer's tax delinquency. After applying all available credits towards
the qualified taxpayer's tax delinquency, the department of revenue
shall reduce the amount of outstanding delinquent tax owed by the
qualified taxpayer. If any credits remain after satisfying all income,
privilege, premium, sales or compensating use tax delinquencies, the
remaining credits shall be issued to the qualified taxpayer. Once a tax
credit is issued, the amount of credits evidenced by the tax credit shall
not be subject to reduction, recapture, disallowance or voidability.
Sec. 2. K.S.A. 2024 Supp. 79-32,211 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE concurred in
HOUSE amendments _______________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.