Ch. 76                                     2004 LAWS OF MARYLAND

(b)     (1) Except as otherwise provided in 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 20% of the taxpayer's qualified rehabilitation
expenditures for the rehabilitation.

(2)     The State tax credit allowed under this section may be allocated
among the partners, members, or shareholders of an entity in any manner agreed to
by those persons in writing.

(3)     (i) For any rehabilitation, the State tax credit allowed under this
section may not exceed $3,000,000.

(ii) For the purposes of the limitation under subparagraph (i) of this
paragraph, the following shall be treated as a single rehabilitation:

1. The phased rehabilitation of the same structure or
property;

2. The separate rehabilitation of different components of the
same structure or property; or

3. The rehabilitation of multiple structures that are
functionally related to serve an overall purpose.

(4)     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 claim a refund in the amount of the excess.

(d)     (1) 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.

(2) The Director may not certify that a rehabilitation is a certified
rehabilitation eligible for the tax credit under this section unless the individual or
business entity seeking certification states under oath the amount of the individual's
or business entity's qualified rehabilitation expenditures.

(e)     (1) In this subsection, "disqualifying work" means work that:

(i) Is performed on a certified heritage structure for which a
rehabilitation has been certified under this section; and

(ii) If performed as part of the rehabilitation certified under this
section, would have made the rehabilitation ineligible for certification.

(2) Except as provided in paragraph (4) of this subsection, the credit
allowed under this section shall be recaptured as provided in paragraph (3) of this
subsection if, during the taxable year in which a certified rehabilitation is completed
or any of the 4 taxable years succeeding the taxable year in which the certified

- 392 -