Legislative Agenda

State Historic Tax Credit Legislative Update

NTCIC and its parent, the National Trust for Historic Preservation, assisted 19 states this year with their advocacy efforts on state tax credit legislation. Here is a summary of how the legislative activity fared, as of June 22, 2007.

Five states attempted to pass a new tax credit:

Arkansas, Hawaii, and Minnesota bills all stalled.
Illinois and New Jersey legislatures are still in session.

Three states faced threats:

Rhode Island successfully fended off rumored budget cuts to the state's program and a last-minute proposal in the Senate to reduce the credit from 30% to 20%.
Michigan's credit is threatened because its funding source (business tax revenue) is being replaced with a new business tax. A preservation credit has been inserted in both versions of the proposed tax, and a compromise bill is expected out soon.
Missouri's credit was threatened by a bill proposing to eliminate all tax credits in the state. Before the session ended, a compromise was reached which requires all tax credits to be reviewed but removes the automatic sunset provision and reauthorization requirement.

Eleven states worked on improving their existing credit program:

Mississippi passed a New Markets credit, although the effort to improve existing rehab tax credit failed.
New Mexico doubled their cap for soon-to-be-created Arts and Cultural Districts.
Maryland extended the program to 2010, removed the $30 million program cap, increased the single-jurisdiction limit to 75% with additional roll-over of unused funds from other jurisdictions, and expanded the time to apply for the credit. Instead of proposed increase to $30 million in funding, funding remained level at $25 million.
Iowa raised its program cap to $10 million (2007), $15 million (2008), and $20 million (2009) and made the credit refundable. It also sets aside monies specifically for small projects with rehab costs of $500,000 or less and projects within special Cultural and Entertainment Districts.
Kansas had proposed changes (raise 25% credit to 50%) that failed to advance.
Maine passed a bill at the end of the session, but money was not appropriated. The legislation would raise the existing 20% credit to 25% if the taxpayer qualifies for the federal rehab credit. If a taxpayer does not receive the federal credit, they would receive a 25% credit if they spent up to $250,000 to rehab a certified historic, income-producing building. To keep the bill alive, the measure has been referred to the Taxation Committee.
Connecticut passed a 25% rehabilitation tax credit for mixed use purposes, with a 5% add-on for inclusion of affordable housing. The 25% credit for rehabbing commercial properties into residential, passed a year ago, remains in effect. The aggregate program cap is $50 million over 3 years, and the per-project cap is $5 million. The credit can be carried forward for five years and is transferable.

For more information, e-mail Rhonda_Sincavage@nthp.org or Renee_Kuhlman@nthp.org.