Legislation in New York to increase the annual cap for the state historic tax credit (HTC) beginning this year was referred this week to the Assembly Ways and Means Committee. A.B. 7298 would increase the annual state cap from $5 million to $7 million this year and to $9 million in 2023 and 2024. New York’s HTC for commercial properties is for 20% of qualified rehabilitation expenditures (QREs). Small projects with QREs of $2.5 million or less can receive a credit worth 150% of the federal credit.
New York Gov. Kathy Hochul signed legislation to resurrect the state’s Historic Barn Rehabilitation Tax Credit. S. 6042 establishes a credit for 25% of qualified rehabilitation expenditures on historic barns, bringing back an incentive that was abolished due to complications from federal tax reform in 2017. Barns built before 1945 are eligible for the credit and those built after 1945 may qualify if they are listed on the state or National Register of Historic Places. The credit took effect Jan. 1.
A bill prefiled in Maryland for official introduction next week would extend the state historic tax credit (HTC) sunset date to 2031 and establish a small commercial project trust account. H.B. 27 would create a small commercial project trust account with a set-aside of at least $4 million annually. The legislation also requires the governor to set aside $12 million annually in 2023 and 2024, $24 million annually in 2025 and 2026 and $36 million annually for 2027 through 2031 for the HTC reserve fund.
The National Park Service (NPS) certified nearly 1,000 completed historic tax credit (HTC) rehabilitation projects totaling $6.5 billion in estimated costs in fiscal year (FY) 2020, according to Wednesday’s Annual Report on the Economic Impact of the Federal Historic Tax Credits for FY 2020. The NPS certified 989 developments in FY 2020, with 1,282 more proposed during the fiscal year. The report also found that HTC-related investments created approximately 122,000 jobs, including 42,000 jobs in construction and 27,000 jobs in manufacturing. Approximately half of the investments were in low- or moderate-income areas.
Legislation in the Florida Senate would create a state historic tax credit (HTC) incentive worth 20% of qualified rehabilitation expenditures (QREs) for properties that are eligible to receive the federal HTC, with a 10% bonus credit for properties in areas designated as part of the Florida Main Street Program. S.B. 1310 is similar to a bill filed in October in the state House of Representatives and would apply to properties rehabilitated and placed in service July 1, 2022, or later. Florida is the only state bordering the Atlantic Ocean that doesn’t have a state HTC incentive.
The New Jersey Economic Development Authority (NJEDA) this month released a draft rule proposal for the state’s historic tax credit (HTC) program established under the New Jersey Economic Recovery Act of 2020. The NJEDA is seeking feedback on the rules for the HTC program, which has a $50 million annual cap for each of six years with awards of up to 40% of the qualified rehabilitation expenditures (QREs), with a maximum of $4 million. Properties in certain areas are eligible for credits of up to 45% of QREs with a maximum of $8 million.
The Office of the Comptroller of the Currency (OCC) today issued a final rule to rescind the Community Reinvestment Act (CRA) rule it issued in June 2020. Today’s action replaces the 2020 rule with a rule based on rules adopted by the OCC, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) in 1995, as amended. The final rule applies to national banks, federal savings associations and state savings associations. The updated rule takes effect Jan. 1, 2022.
The Michigan State Historic Preservation Office (SHPO) announced Wednesday a public hearing on current draft rules for the new state historic tax credit (HTC) program at 10 a.m. Dec. 10 at the Michigan Economic Development Corporation building in Lansing, Michigan. The current draft presents a revised version of those made available for public comment in June. SHPO hopes to launch the state’s HTC program in mid-2022.
The Advisory Council on Historic Preservation (ACHP) will host its quarterly business meeting at 1:30 p.m. EDT Dec. 15 via video conference. The provisional agenda includes delivering the ACHP/U.S. Department of Housing and Urban Development (HUD) Secretary’s Award for Excellence in Historic Preservation, an ACHP strategic plan update, an update from the climate change task force, a White House Tribal Nations Summit report and a comment panel on recommendations for Section 106.
Budget legislation signed by Gov. Roy Cooper extended the North Carolina state historic tax credit (HTC) and reinstated and extends the state’s mill rehabilitation credit. The budget legislation extends the sunset date for the state HTC from Jan. 1, 2024, to Jan. 1, 2030. It also adds a 5% bonus for qualified rehabilitation expenditures (QREs) of up to $20 million if the property was originally used for educational purposes. The mill rehabilitation credit is effective for taxable years beginning on or after Jan. 1, 2021, and allows a state credit of 40% for a taxpayer who is allowed a federal HTC on QREs of at least $10 million with respect to the certified rehabilitation of an eligible railroad station.
The Internal Revenue Service (IRS) has updated its table that compares the historic tax credit (HTC) to the low-income housing tax credit (LIHTC), including credit computation, basis adjustment, at-risk rules and 18 other areas. The table does not constitute legal authority and may not be relied upon as such.
Maine’s Office of Program Evaluation and Government Accountability (OPEGA) released Nov. 10 an Evaluation of the Maine Historic Rehabilitation Tax Credit, finding the state’s historic tax credit (HTC) compares favorably to best practices advised by the National Trust for Historic Preservation.
Democrats in the House of Representatives today released revised text for the Build Back Better Act (H.R. 5376), which includes an expansion of the low-income housing tax credit (LIHTC), the neighborhood homes tax credit (NHTC) and a $175 million tribal allocation for the new markets tax credit (NMTC) for 2022. The revised legislation retains $555 billion in tax and spending proposals for clean energy with minor changes. The LIHTC provisions include the extension of the 12.5% increase in 9% allocations that began in 2018 as part of the baseline during 2022-2024, adding annual 10% plus inflation increases for 2022-24 to those amounts, but reverting to the 2017 baseline as adjusted for inflation in 2025. It also would reduce the 50% test for affordable rental housing financed with private activity bonds (PABs) to 25% for five years (2022-26) and establish the 50% basis boost for extremely low-income housing, with the set-aside reduced from 10% to 8%, and a 30% basis boost for LIHTC properties in tribal areas.
President Joe Biden today announced the Build Back Better framework to guide the drafting of reconciliation legislation. Bill text introduced today in the House Rules Committee details the $1.75 trillion spending proposal.
Of the $1.75 trillion, $150 billion would be set aside for housing and community development spending, including funding for rental assistance, preserving public housing and the national Housing Trust Fund (HTF). The framework also includes $555 billion for clean energy tax and spending proposals, of which $320 billion are for tax proposals, about $50 billion more than the House Ways and Means version of the reconciliation package.
An Alabama Department of Revenue administrative rule took effect Oct. 15 amending the state’s historic tax credit (HTC) to allow the recipient of an HTC transfer to claim a refund for the difference if their taxes owed are less than the tax credit in the year the property is placed in service.
Legislation introduced in Florida this week would create a state historic tax credit (HTC) worth 20% of qualified rehabilitation expenditures (QREs), with a 30% credit for properties in areas designed as part of the Florida Main Street Program. H.B. 247 would apply to income-producing properties that are rehabilitated and placed in service July 1, 2022, or later. Properties with more than $750,000 in QREs would be required to submit an audited cost report. The credit would be for 20% of QREs for properties that receive the federal HTC, with properties in the local program area of an accredited Main Street Program receiving the 30% credit.
Virginia Sens. Tim Kaine and Mark Warner reintroduced Wednesday the School Infrastructure Modernization Act, which would expand the federal historic tax credit (HTC) to allow for rehabilitations of schools that continue to operate as such. S. 2883 would exempt schools from the credit’s current requirement to serve a different function than previously. The law would apply beginning Dec. 31, 2021, with a window for the U.S.
The Georgia Department of Revenue will hold a meeting Nov. 3 at 10 a.m. ET to discuss a proposed rule that would establish the process for preapproval of claims for the state historic tax credit (HTC) for historic homes and certified structures earning less than $300,000. Proposed Rule 560-7-8-.56 would bring the state HTC regulations into conformity with state law. The rule would retain the statewide annual cap at $5 million for HTCs for historic homes and any certified structure earning $300,000 or less.
Delaware Gov. John Carney signed Sept. 15 legislation to extend the state historic tax credit (HTC) by nine years. S.B. 182 moves the credit’s sunset date to June 30, 2030, from June 30, 2021. Delaware’s HTC is for 20% of qualified expenditures for properties eligible for the federal HTC.
The Ohio Department of Development opened Tuesday the window to apply for its Transformational Mixed Use Development program, which provides a tax credit against costs incurred while building a development. One-hundred million dollars is available in estimated tax credits per year for fiscal years (FY) 2022, 2023, 2024 and 2025.
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