The preservationist and development communities alike are carefully watching a bill making its way through the Legislature that would extend the state historic building tax credit through 2026.
Currently, the state tax credit—which enables developers to recoup 20% of their qualified expenditures rehabilitating historic buildings—is set to expire in 2021. Supporters of the measure say extending the credit, which is typically used in conjunction with a 20% federal historic building tax credit, is critical to bringing old and abandoned properties back into commerce.
But while the bill enjoys broad support and is recognized as a valuable incentive, the version passed earlier this session by the full House caps at $150 million the total number of credits the state can award in a given year. The current law has no cap.
Preserve Louisiana Executive Director Fairleigh Jackson says limiting the total number of historic building tax credits issued in a year to $150 million is a potential disincentive to investors and developers, who have a long-range planning and budgeting horizon and need to know their tax credits will be there at the end of a project before they move forward.
“Developers want certainty,” Jackson says. “So there are people who will shy away from using the credits because they’re doing multi-year projects and they don’t know how many credits are going to be available from one year to the next.”
The original version of House Bill 83 didn’t include the cap, but it was added on as an amendment before final passage. A senate version of the bill doesn’t not include the cap.
“We have a lot of support in the Senate,” Jackson says. “But we’re a little nervous that when it goes back to the House or to a conference committee the cap will be put back in or we may even lose it altogether.”
In late 2017, preservationist and developers around the state were ultimately successful in lobbying Louisiana’s Congressional delegation to keep the 20% federal historic building tax credit from getting axed by the Trump administration.
U.S. Sen. Bill Cassidy, R-Baton Rouge, was key in helping keep the measure in place.
“We hope our legislators will take a lesson from our leaders in D.C. about how important this is and follow their leadership,” Jackson says.
