Developers and preservationists are lamenting the demise of a bill that would have extended until 2026 the state’s historic building tax credit program, currently set to expire in 2021.
The Senate effectively killed the bill, by Sen. Neil Riser, R-Columbia, late Thursday, when it refused to take up the measure with precious few days remaining until the Legislature adjourns.
Earlier in the session, the House approved extending the 20% tax credit for another five years beyond its sunset date. But House members tacked on an amendment that would have capped the total amount of credits the state can issue in a single year at $150 million.
Supporters of the measure were dismayed, fearing the cap would stymie historic renovation, and were hoping the Senate would remove the cap. Instead, senators killed the bill altogether.
“This means the program end in 2021,” says Preserve Louisiana Executive Director Fairleigh Jackson. “But it’s going to prevent any new projects from going forward as soon as this year because of the uncertainty surrounding it.”
Though the tax credit program—typically used in conjunction with a 20% federal historic building tax credit—shows a direct cost to the state treasury on paper, developers and preservationists argue that it more than pays for itself by returning historic properties to commerce and stimulating direct and indirect economic development.
What’s more, the credits, which can be applied against income or corporate franchise tax, can only be redeemed once expenditures have been made during the renovation of a historic structure.
“This is very disappointing,” says Derek Fitch, who has been involved with several downtown building renovations. “The cost to get in these buildings doesn’t make sense without that program, and when you look around downtown you can see how it has sparked investment at a significant level.”
Architect Dyke Nelson, who has also been prominent in such historic renovations as the Commerce Building and Electric Depot, among others, agrees the Legislature’s action—or lack thereof—will have a chilling effect on historic renovations.
“Everyone is stunned this didn’t pass and obviously it’s problematic,” he says. “We will retool and try to get this done next year or before it sunsets.”
Technically, lawmakers cannot take up the tax credit program during the 2020 session because it is not a fiscal session, though the measure could be included in the call for a special session—if there is one.
Otherwise, it will be 2021 before the issue comes up again for debate, which Jackson and others say may be too late for many projects.