(8) "Qualified rehabilitation expenditure" means any amount expended
in the rehabilitation of a structure that is properly chargeable to capital account.

(9) "Substantia] rehabilitation" means rehabilitation of a structure for
which the qualified rehabilitation expenditures, during the 24-month period selected
by the taxpayer ending with or within the taxable year, exceed:

(i) For owner-occupied residential property, $5,000; or

(ii) For all other property, the greater of:

1. The adjusted basis of the structure; or

2. $5,000.

(b) (1) Subject to subsection (c) of this section, for the taxable year in which
a certified rehabilitation is completed, a business entity or an individual may claim a
tax credit in an amount equal to 25% of the taxpayer's qualified rehabilitation
expenditures for the rehabilitation.

(2) The same tax credit may not be applied more than once against
different taxes.

(c) If the credit allowed under this section in any taxable year exceeds the
total tax otherwise payable by the business entity or the individual for that taxable
year, the business entity or individual may apply the excess as a credit for succeeding
years until the earlier of:

(1) The full amount of the excess is used; or

(2) The expiration of the tenth taxable year after the taxable year in
which the certified rehabilitation is completed.

(d) If a certified heritage structure for which a certified rehabilitation has
been completed is sold or transferred, the amount of any credit unused at the time of
sale or transfer may be transferred to the individual or business entity to which the
building is sold or transferred.

(E) A BUSINESS ENTITY OR INDIVIDUAL THAT INCURS QUALIFIED
REHABILITATION EXPENDITURES IN THE REHABILITATION OF A CERTIFIED
HISTORIC STRUCTURE IN A STATE OTHER THAN MARYLAND MAY CLAIM A TAX
CREDIT TO THE SAME EXTENT AS PROVIDED UNDER SUBSECTION (B) OF THIS
SECTION IF THE OTHER STATE HAS IN EFFECT A RECIPROCAL HISTORIC
REHABILITATION TAX CREDIT PROGRAM AND AGREEMENT FOR TAXPAYERS OF THAT
STATE WHO REHABILITATE HISTORIC STRUCTURES IN MARYLAND.

[(e)] (F) The Director and the Maryland Heritage Areas Authority may adopt
regulations to establish procedures and standards for certifying heritage structures
and rehabilitations under this section.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
July 1, 1999 and shall be applicable to all taxable years beginning after December 31,
1999.