On Monday, February 1st, the Maryland General Assembly’s Tax Credit Evaluation Committee (TEC Committee) met to review the Department of Legislative Services (DLS) report on the state’s historic rehabilitation tax credit. The credit received a favorable review, and Montgomery County Senator Richard Madaleno announced that he was willing to push for reauthorization of the credit one year in advance of its sunset in 2017.
WHAT’S IN SENATOR MADALENO’S REAUTHORIZATION?
The Madaleno bill has not been introduced yet. Introduction is expected in the next few weeks. Based on conversations in the TCE committee hearing, we believe the following to be true:
PRESERVATION MARYLAND SUPPORTS REAUTHORIZATION FOR 5 YEARS
1. The reauthorization bill will authorize the historic tax credit program for a full 5 years.
PRESERVATION MARYLAND SUPPORTS NO LIMIT ON RESIDENTIAL USE
2. The bill will drop the DLS recommendation to limit the use of the residential tax credit – a win for preservation. DLS had proposed preventing homes valued at more than 150% of the median value of homes in that county from utilizing the credit, a needless and costly regulation.
PRESERVATION MARYLAND SUPPORTS
3. The bill will drop the “underrepresented communities” requirement that did not work in spreading the tax credit geographically, however, the bill will preserve the 60% cap on funding to Baltimore City from the total tax credit appropriation.
PRESERVATION MARYLAND OPPOSES NEW POLICY PREVENTING FEDERAL FUNDS AS PART OF COSTS
4. The bill may prevent using federal grants as a portion of project costs – a problem for non-profits engaging in historic rehab and workforce housing development. Preservation Maryland opposes this policy and is working to keep it from being included in the final bill.
PRESERVATION MARYLAND SUPPORTS REVERTING TO ORIGINAL NAME
5. The bill may keep the current name, “Sustainable Communities Tax Credit.” Preservation Maryland has requested that Senator Madaleno consider reverting back to the original, “Historic Rehabilitation Tax Credit” program name, which more accurately reflects and explains the intent and purpose of the program. While a laudable goal to connect preservation to sustainability, the brand has been compromised and the current name ultimately confuses most.
Supplemental Budget Support for Preservation
Although the three traditional preservation grant programs, non-capital, capital, and museum assistance, were not included in the budget for the sixth straight year, Preservation Maryland is working to advocate on behalf of the programs with key members of the Hogan Administration.
Preservation Maryland has identified $20M worth of viable preservation capital projects across the state that would benefit from that program alone — a program that has not received funding since 2010. In addition to funding for grant programs, Preservation Maryland is working to make the case for additional tax credit funding – to increase the pool of available tax credits for 2017 to $30M. In 2015, the Maryland Historical Trust received $30 million in qualified, shovel-ready projects, but, were only able to fund $9M in credits. By comparison, the Virginia State Rehabilitation Tax Credit program awarded nearly $100 million in credits in 2015 alone.
Individual Bills
SENATE BILL 478
“Creation of a State Debt – Baltimore City – Garrett-Jacobs Mansion Access and Safety Project: Authorizing the creation of a State Debt not to exceed $400,000, the proceeds to be used as a grant to the Board of Trustees of the Garrett-Jacobs Mansion Endowment Fund, Inc. for the acquisition, planning, design, construction, repair, renovation, reconstruction, and capital equipping of the Garrett-Jacobs Mansion, located in Baltimore City; providing for disbursement of the loan proceeds, subject to a requirement that the grantee provide and expend a matching fund; etc.”
PRESERVATION MARYLAND POSITION
SUPPORT
Identifying funding sources for preservation is an increasingly complex and difficult process — made more difficult by the state’s unwillingness to fund preservation grant programs. Bond funding for preservation efforts are worthwhile and receive our support.
SENATE BILL 479
“Creation of a State Debt – Anne Arundel County – William Brown House at Historic London Town: Authorizing the creation of a State Debt not to exceed $125,000, the proceeds to be used as a grant to the Board of Trustees of the London Town Foundation, Inc. for the acquisition, planning, design, construction, repair, renovation, reconstruction, and capital equipping of the William Brown House at Historic London Town, located in Anne Arundel County; providing for disbursement of the loan proceeds, subject to a requirement that the grantee provide and expend a matching fund; etc.”
PRESERVATION MARYLAND POSITION
SUPPORT
Historic London Town is a Maryland treasure. Any efforts to fund needed rehabilitation and preservation work receive our emphatic support.
HOUSE BILL 605
“Frederick County – Development Rights and Responsibilities Agreements – Administrative Appeals: Authorizing, in Frederick County, a person aggrieved by a development rights and responsibilities agreement to file an administrative appeal; providing that if an agreement was entered into before July 1, 2016, a person aggrieved by an amendment to the agreement may not file an administrative appeal and may seek direct judicial review under specified circumstances; providing that a party may appeal to the Court of Special Appeals and thereafter may petition the Court of Appeals for a writ of certiorari under specified circumstances; etc.”
PRESERVATION MARYLAND POSITION
SUPPORT
Although a seemingly non-preservation issue, in Frederick County, citizens have been unable to appeal Development agreements — agreements which could ultimately destroy cultural landscapes, historic structures and more. Strangely, citizens in every other Maryland county have the ability to appeal these agreements. We believe a citizen’s right to appeal such an issue should be the same across the state — and preservationists in Frederick County should have the same rights as those across the county line. Preservation Maryland signed onto a coalition letter of support for this legislation, which is now supported by the entire Frederick County delegation.
HOUSE BILL 584
“Economic Development – One Maryland Tax Credit – Expansion: Expanding the eligibility requirements for the One Maryland Economic Development Tax Credit to include specified qualified businesses that establish or expand a specified business facility that is located in a qualified distressed political subdivision; expanding eligibility for the credit by altering, under specified circumstances, the number of qualified positions that must be created and the eligible activities in which a person may engage at a new or expanded business facility; etc.”
PRESERVATION MARYLAND POSITION
SUPPORT
The One Maryland Tax Credit has the ability to positively impact redevelopment of distressed historic areas, and for that reason we are supportive of efforts to expand the use and impact of the credit.
For more background on the issues and bills, see our previous Update from January 26, 2016.