Developers Guide to the Nebraska Job Creation and Mainstreet Revitalization Act (Nebraska State Historic Tax Credit (LB191))
Credit against Nebraska income, deposit or premium tax equal to 20 percent of “eligible expenditures” on “improvements” to a “historically significant real property,” up to $1,000,000 in credit per project.
$15,000,000 in credits allocated and available in each of 2015, 2016, 2017 and 2018. Unused credits carry over to subsequent years.
Eligible expenditures means: any cost incurred for the improvement of historically significant real property located in the State of Nebraska, including, but not limited to, qualified rehabilitation expenditures as defined in section 47(c)(2) of the Internal Revenue Code of 1986, as amended, and the related regulations thereunder, if such improvement is in conformance with the standards.
A historically significant real property is: a building or structure used for any purpose, except for a single-family detached residence, which is:
(a) individually listed in the National Register of Historic Places;
(b)(i) located within a National Register district; and (ii) determined by the State Historic Preservation Officer to be historically significant to the district;
(c)(i) individually designated pursuant to a landmark ordinance or resolution enacted by a political subdivision of the state, which ordinance or resolution has been approved by the officer; and (ii) determined by the officer as being historically significant; or
(d)(i) located within a district designated pursuant to a preservation ordinance or resolution enacted by a county, city, or village of the state or political body comprised thereof providing for the rehabilitation, preservation, or restoration of historically significant real property, which ordinance or resolution has been approved by the officer; and (ii) determined by the officer as contributing to the historical significance of the district or to its economic viability.
NOTE the criteria in subsections (c) and (d) are broader than the federal historic tax credit program.
An “improvement” is: a project that contributes to the basis, functionality, or value of the historically significant real property and has a total cost which equals or exceeds twenty-five thousand dollars, or for historically significant real property that is located in a city of the metropolitan or primary class, the greater of (i) twenty-five thousand dollars or (ii) twenty-five percent of the property’s assessed value.
The standards are:
(a) the Secretary of the Interior’s Standards for the Treatment of Historic Properties as promulgated by the United States Department of the Interior; or
(b) specific standards for the rehabilitation, preservation, and restoration of historically significant real property contained in a duly adopted local preservation ordinance or resolution that has been approved by the officer.
NOTE these criteria are broader than the federal historic tax credit program criteria.
The Nebraska State Historical Society (SHPO) will begin accepting applications January 1, 2015 (or the first State business day thereafter). The SHPO has 21 days to determine the application’s completeness; inaction is deemed approval. The SHPO then has 30 days to approve or deny the application; inaction is deemed approval. The applicant must start work within 24 months of the SHPO approving the application. The applicant must seek final approval within 12 months of placing the building into service. The applicant may use the credits in the year the SHPO approves the completed project, or any year thereafter, until December 31, 2024. Applications received on or before December 31, 2018, will be eligible for credits, subject to the other timing criteria and availability of credits, even if not approved until after that date.
Submit a complete application to SHPO prior to commencing work on the historically significant real property. The statute does not allow credits for expenditures prior to SHPO’s approval of the application, except expenditures for architectural and engineering fees, and work done to prevent deterioration of the historically significant real property incurred within six months prior to submission of the application. SHPO then reviews the application for completeness. The date on which SHPO determines the application to be complete becomes the application’s “priority date” relative to its position within the annual limit on credits, and SHPO will reserve the requested credits for the applicant as of that date. The applicant then works with SHPO on approval of the work, completes the project, within 12 months of placing the building into service seeks and obtains final approval of the work from SHPO, and receives one or more certificates evidencing the credits. An applicant that is a tax exempt 501(c)(3) entity or a political subdivision may freely transfer some or all of the credits multiple times and without limitation. All other applicants may do the same with up to 50 percent of the credits received.
Credits are subject to recapture if the owner does additional work not in conformance with the approved application. Recapture liability lies with the person owning the historically significant real property at the time the recapture event occurs.