Extends the sunset of the tax credit for rehabilitation of historic structures to January 1, 2026, and limits the maximum amount of credits awarded in a calendar year (RE1 DECREASE GF RV See Note)
With the passage of HB 83, the maximum amount of tax credits awarded in any calendar year is capped at $150 million. The process for allocating these credits will be on a first-come, first-served basis. If applications exceed the available credits for a year, the excess requests will be treated as if they were submitted at the start of the following year. This change aims to streamline the awarding process while ensuring that funds are distributed fairly among applicants, potentially stimulating economic growth in the rehabilitated areas.
House Bill 83 focuses on extending the tax credit for the rehabilitation of nonresidential historic structures. Originally set to sunset on January 1, 2022, the bill extends this deadline to January 1, 2026. This extension allows property owners within designated downtown development or cultural districts to continue to receive significant financial incentives for restoring historic buildings. The credit will remain at 25% for eligible expenses incurred prior to January 1, 2018, and 20% for those incurred from January 1, 2018, to January 1, 2026.
The sentiment surrounding HB 83 has been largely positive, with strong support from proponents of historic preservation and community revitalization. Advocates argue that extending the tax credit incentivizes investment in the rehabilitation of historic structures, thus fostering sustainable economic development, enhancing the character of communities, and contributing to their cultural heritage. However, there may be concerns regarding the sustainability of the credit allocation, particularly if the funding becomes oversubscribed.
One notable point of contention discussed during the bill's consideration is the cap on annual tax credits. While proponents believe that a limit of $150 million will protect the state's financial interests while promoting redevelopment, some critics express concern that this threshold may be insufficient to meet demand, particularly in larger urban areas where restoration efforts are essential. The balance between incentivizing rehabilitation while managing state budget priorities presents a significant point of debate among legislators.