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.