Journal of Tax Credits May 2014

Subscribe to Novogradac Journal
Tax Credit iPad App
LIHTC Industry Alerts
Novogradac RSS Feeds
LIHTC weekly Podcast
Tax Credit Journal Archives
Advertise with Novogradac Journal

Featured Articles

Plus News Briefs

This information was published in the Novogradac Journal of Tax Credits. The complete version is available by paid subscription only. Click here for more information on subscribing.

Order Free Journal Sample

Also in this Issue

  • Johnson-Crapo Housing Finance Reform Bill Could Significantly Increase Affordable Housing Resources

  • LIHTC Working Group Update May 2014

  • LIHTCs Bring Opportunity For Home Ownership to Roosevelt, Utah

  • Focus On: Trenton, N.J.

  • HUD Funding, 4 Percent LIHTCs Revive Affordable Housing in Denver, Colo.

  • Texas Attorney General Clarifies HTC Certification Issues

  • NMTCs Finance Biomass Facility on Former Michigan Air Force Base

  • Houston Krill Factory Catches $28 Million in NMTCs

  • NMTC Qualified Equity Investment Report

  • The Current: Dangers of Double-Dipping: Section 1603 Grants and Tax Credits Don’t Mix

  • Renewable Energy Power Awards


May 2014, Volume V, Issue V Published By Novogradac & Company LLP


The Advisory Council on Historic Preservation (ACHP) released Executive Order 13563 Status Report March 14. The order, a retrospective analysis, determined that the Section 106 regulations of the National Historic Preservation Act (NHPA) are not outmoded, ineffective, insufficient or excessively burdensome, and therefore should not be modified, streamlined, expanded or repealed. The order also details the progress ACHP has made in seven areas in regards to improvements to the process for implementing the Section 106 regulations. The areas are periodic regulatory review, federal agency programs and performance, training and education, providing guidance, coordination with other federal agencies, ACHP involvement and assistance, and communication. The improvements will help federal agencies, the ACHP, states, Indian tribes and Native Hawaiian organizations, local governments, applicants, the public and other stakeholders in achieving the goals of the NHPA for historic properties. Executive Order 13563 Status Report is available at www.achp.gov.

On March 13, Indiana H.B. 1215 was signed into law. The bill requires the commission on state tax and financing policy to compare the effectiveness of tax credits to the effectiveness of grant programs in encouraging the preservation and commercial redevelopment of historic properties. The bill will be effective July 1. The bill is available at www.historictaxcredits.com.

The Mississippi Legislature has passed legislation that would extend the state’s historic tax credit (HTC) through Dec. 31, 2017. The bill, H.B. 787, was sent to the governor for his signature on April 8. H.B. 787 was amended to include an extension of the program after another bill that would have extended the HTC program until Dec. 31, 2029 died in the Senate Committee. The deadline for the 25 percent credit is currently Dec. 31, 2014. The bill is available at www.historictaxcredits.com

Matthew McLaughlin, a partner at Balch & Bingham LLP law firm, released a white paper on the economic impact of the Mississippi HTC after Phillip Gunn-R, Speaker of the House of Mississippi, released Mississippi H.B. 1436 to extend the credit. In the white paper, McLaughlin states that the Mississippi HTC is a crucial component to the viability of the federal HTC program. McLaughlin says that from 2002 to 2012, approximately $170 million was invested in Mississippi and close to 3,000 program-related jobs were created. McLaughlin closes by saying that the Mississippi HTC has been one of the most effective incentives used to revitalize rural and urban Mississippi main street corridors. The Mississippi HTC program expires on Dec. 31, 2014. The white paper is available at www.historictaxcredits.com.

On March 25, Thomas A. Schweich, Missouri state auditor, released an audit of the state’s HTC program. He assessed that the overall performance of the program was fair, which indicates the program needs to improve operations in several areas. He found that in fiscal year (FY) 2013, the program had close to $79 million in redemptions, which made this program the state’s third largest tax credit program. The state HTC program has also had more than $1.1 billion in redemptions during the past 10 years. Schweich assessed that only 49 cents to 85 cents of every tax credit dollar issued goes to rehabilitation costs. The balance goes to investors, tax credit brokers or syndicators, and the federal and state government. He also said that too much time passes between project completion and the tax credit certificate issuance, which increases interest costs incurred by developers and reduces equity going toward construction. He also found that state agency personnel did not conduct site visits and the Missouri Department of Economic Development (DED) does not monitor project approval to ensure compliance with state law. Schweich offered recommendations to the DED on how it could improve its operations. These included, but were not limited to, modifying state law to improve current tax model efficiency, establishing a sunset provision for the program and establishing cost containment provisions regarding project costs claimed under multiple tax credit programs. The scope of the audit included but was not limited to June 30, 2011 to June 30, 2013. The audit is available at www.historictaxcredits.com.