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Historic Tax Credits News Briefs - March 2024

A bill introduced in January in the New Jersey Senate would create a homeowner historic tax credit (HTC) worth 25% of qualified rehabilitation expenditures (QREs). Under S.B. 2391, no more than 60% of the QREs could be for the interior of the property and the building would be required to be the homeowner’s principal residence for 12 consecutive months following completion. The credit would have a project cap of $25,000 over a 10-year period and a statewide cap of $15 million. New Jersey currently has an HTC for income-producing properties.

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A bill introduced in the Illinois General Assembly would increase the statewide cap for the state HTC from $15 million to $75 million over two years. S.B. 2880 would increase the cap to $25 million for 2024 and to $75 million for 2025 through 2028. The Illinois HTC is for 25% of QREs.

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The Historic Tax Credit Coalition issued a letter in January asking the Office of the Comptroller of Currency, the Federal Reserve Board of Governors and the Federal Deposit Insurance Corporation to change its proposed risk-weighting rule for HTC investments by banks to 50%. The letter responds to proposed bank capital requirements for large banks, including their equity investments, under Basel III proposed regulations, which would align U.S. bank capital requirements with the international regulatory framework for capital adequacy, stress testing and liquidity requirements. The letter asks for proposed regulations to treat the HTC in a manner consistent with the low-income housing tax credit (LIHTC) and new markets tax credit. Under the proposed rule, HTC investments that are not treated as community development investments under part 24 (Eleventh) of the National Bank Act would be risk-weighted at 400%.

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Conifer Realty and Community Preservation Partners will team for a $335 million renovation of Andrews Terrace, a 526-apartment property in Rochester, New York. Chase Community Equity provided a $37.2 million investment in federal and state HTC equity. KeyBank, Goldman Sachs and Urban Investment Group combined for a $200 million construction loan and a $135.6 million investment in federal 4% LIHTCs. Renovations are scheduled to take more than 2.5 years to complete.

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A bill introduced in January in the Hawaii Legislature would extend the sunset date of the state HTC to 2030 while incrementally increasing the annual statewide cap from $1 million to $4 million. H.B. 1918 would move the sunset date from the end of 2024 to the end of 2030, while increasing the annual statewide cap by $500,000 per year through 2030. The Hawaii HTC is for 30% of QREs and is taken in the year in which the structure is placed in service.

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Legislation introduced in New Hampshire would create an HTC for residential properties. Under S.B. 364, taxpayers could contribute to a state fund for specific properties and receive a credit worth 65% of their contribution. There would be a $10 million cap on total annual contributions, a $5 million annual cap on individual contributions and a $1 million annual cap for credits claimed by a taxpayer, with credits available to be carried forward five years. New Hampshire is the only state in New England without an HTC.

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Legislation in the West Virginia House of Representatives would create a 25% tax credit for the replacement of historic facades. H.B. 4507 would create a credit applying to the cost of replacing a façade of a building with no historic value in a historic district with a façade that complements the historic facades in the district. The facades would have to be approved in advance by a county commission or municipality.

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Legislation introduced in January in the Virginia state Senate would increase the annual taxpayer cap for the HTC to $10 million. S.B. 556 would increase the $5 million cap that has been in place since 2017. The bill would also allow taxpayers to claim $20 million in a single year if the historic structure is in a locality that has a designated enterprise zone.

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The National Park Service’s Technical Preservation Service in February announced a series of advanced training public webinars for developers, architects, consultants and others working in the HTC community. The goal of the webinars is to provide more thorough information for participants, avoid incomplete applications and avoid delays. Webinars take place 2-4 p.m. ET March 7 for applications; 3-5 p.m. ET March 29 for Part 1 of the application’s documentation and requirements; 2-4 p.m. March 28 for Part 2 of the application’s narrative and proposed treatments; 2-4 p.m. ET April 4 for Part 2 of the application’s accompanying documentation; and 2-4 p.m. ET April 11 for phasing requirements, development completion and Part 3 application review. The webinars will not be recorded.

Journal Category:

Historic Tax Credits

Authors:

Novogradac

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