Category: Missouri

From Deb Sheals, Public Policy Committee Chair, Missouri Preservation

As most of you probably know by now, the Governor has called a special session of the legislature, to begin on September 6th. The centerpiece of the special session is a massive Economic Development bill that will impact almost all existing tax credit programs, including Historic.

The proposed legislation will make many changes to the HTC program, including a seven year sunset, elimination of the ability to combine historic and other tax credits, and a first ever cap on annual allocations for small projects. (Up to this point, projects requesting less than $275,000 in tax credits have not been counted against the overall cap, which allowed owners to plan without uncertainty about when development incentives may become available.) The new law would create a separate $10 million cap for small projects.

Capping the small deal exemption would have an arguably minor impact upon redemption totals, but affect many program users. In spite of large numbers of projects, the overall cost for this category is low. In FY2010, small projects made up 72% (159 of 172) of the total number of approved projects, but all of those only accounted for 28% of the dollar amount of credits issued (just over $11 million). This would cut one of the most effective state incentives available for modest redevelopment projects. Smaller developers cannot afford to deal with the funding uncertainty that would come with a new cap.

The bill calls for a complete end (sunset) to the program in seven years. This uncertainty will shut down development many years ahead of that time, since it often take many years to get a redevelopment project underway. Alternate language calling for a regular review of the program offers a much more reasonable way to handle this issue.

Other troubling proposals include eliminating the ability to use Historic and Low Income credits in the same project (stacking). This change would be especially damaging to efforts to reuse important resources such as vacated historic schools, which can be very hard to redevelop, but adapt well to new low-income senior and workforce housing.

The proposal also cuts the overall cap to $80 million per year. Although this is a drastic reduction, it is being paired with administrative changes that are expected to make the program much easier to use, which will soften the blow a bit. It seems prudent to accept a slightly lower cap ($100 million is much more reasonable) as long as that is tied to administrative changes.

Ask your legislator to support the small deal exemption and oppose a sunset.

It will make a difference if they hear from us.

Don’t know your legislator’s name or contact information? Look here.

Governor Jay Nixon’s Tax Credit Review Commission has approved the recommendation that the Missouri State Historic Rehabilitation Tax Credit’s annual cap be lowered from around $161 million to $75 million. Other changes included in the final recommendations are disallowing combination of the historic tax credit with the Neighborhood Preservation and the Low Income Housing Tax Credit.

The Missouri Coalition for Historic Preservation and Economic Development has posted an article that outlines how these recommendations ended up being passed after the Subcommittee on Historic Tax Credits made completely different recommendations. Read that article here.

From the Coalition for Historic Preservation and Economic Development

The report contains the Subcommittee’s recommendations to the TCRC. Per the final report, the Sub-Committee’s methodology used to come to the report conclusions were as follows:

Over the course of its meetings, the Subcommittee collected and considered a significant amount of testimony, facts, assertations, and reports from economists, national organizations, DED, members of the development community, private and public leaders and the public themselves. The Subcommittee submits this Report in part as a response to the fifteen questions posed by the Co-Chairmen of the Commission in their memorandum to the commission dated September 16, 2010. The Subcommittee has also chosen to supplement its response to the Commission’s questions with specific recommendations to the commission for proposals to modify the program.

The HTC Subcommittee’s Final Report identified seven recommendations for the Tax Credit Review Commission to consider for its final report to the Governor.

1. The Annual Cap placed on the credit in 2009 to remain in place
2. Revision to HTC Carry back/Carry forward provisions
3. Revision to Deferred Developer Fee methodology
4. Reductions of Percentage of Credit when combined with LIHTC
5. Owner Occupied Cap reduction
6. Cost Certification Review – Create more efficiencies and quicker turnaround time
7. Program Efficiencies – work to clarify DED interpretations of the law and to direct issuance fee back to support the program

The Tax Credit Review Commission will be meeting November 5th in Jefferson City, MO to review all reports from the various Tax Credit Subcommittees. Once all reports have been reviewed by the TCRC they will draft their final report about all of Missouri’s Tax Credit Programs for Governor Nixon to review.

From the National Trust for Historic Preservation

The Missouri Historic Tax Credit is under review. Governor Nixon’s Tax Credit Review Commission (TCRC) has begun its review of Missouri’s tax credit programs. In addition to the full TCRC meeting which was held September 8, 2010 to debrief the Commission members on all of the tax credit programs, there are several smaller regional meetings to be scheduled throughout the State, at which time public testimony will be taken.

The Missouri State Historic Tax Credit program is under scrutiny by the commission. It is critically important at each of these public hearings for commission members to understand the great benefit of the historic tax credit to the state of Missouri!

So how can you help? The National Trust for Historic Preservation is urging you to attend the upcoming regional TCRC meetings to voice that more cuts to the existing Historic Tax Credit Program will only reduce state revenues and kill more jobs, and that surrounding states are increasing their historic tax credit caps to create jobs.

Upcoming TCRC Meetings:

Cape Girardeau
Monday, September 20th
John and Betty Glenn Convocation Center
Southeast Missouri State University, River Campus
One University Plaza
Cape Girardeau, MO 63701
3:00 p.m. – 9:00 p.m.

St. Louis
Tuesday, September 21st
Missouri Court of Appeals, Eastern District
En Banc Courtroom
One Post Office Square
815 Olive Street
St. Louis, MO 63101
3:00 p.m. – 9:00 p.m.

Please send an e-mail encouraging the continuation of the Missouri Historic Tax Credit. Write to the Tax Credit Review Commission today!