CAPP Act Could Spur Increased Economic Development

Published by Michael Novogradac on Friday, June 21, 2013 - 12:00am

Last week Sens. Ben Cardin, D-Md., and Susan Collins, R-Maine, introduced the bipartisan Creating American Prosperity Through Preservation Act, also known as the CAPP Act, which would improve and expand the historic tax credit.

The CAPP Act, S. 1141, has four primary provisions:

  • It would increase the historic tax credit from 20 percent to 30 percent for projects with $5 million or less in qualified rehabilitation expenditures,
  • It would expand the 10 percent credit for the rehabilitation of non-historic buildings to include buildings that are 50 years old or older.
  • It would eliminate federal taxation on the proceeds of state historic tax credits transferred through partnerships and sold as state tax certificates, and
  • It would provide a 2 percent historic tax credit boost for properties that make energy-efficient renovations.

These proposed changes will make the historic tax credit easier to use and expand its impact in economically disadvantaged areas. This is especially important when you consider the role the historic tax credit plays in economic development. The National Trust for Historic Preservation reports that since 2002 more than 75 percent of all historic tax credit projects have been located in neighborhoods with family incomes below 80 percent of the area median income. Moreover, historic preservation has created more than 2.35 million jobs nationwide since 1978 with 57,783 new jobs in fiscal year 2012 alone.