Creating American Prosperity through Preservation Act (CAPP Act) introduced in the House of Representatives – Modernizes federal Historic Tax Credit and Creates National Economic Boost

Washington, D.C. — Congressman Aaron Shock (R-IL) joined with Congressman Earl Blumenauer (D-OR) to introduce legislation on July 8th, the “Creating American Prosperity through Preservation Act” (CAPP), which modernizes and creates a more powerful federal Historic Tax Credit. For thirty years, the federal HTC has helped revitalize cities, towns and rural communities by turning dilapidated and forgotten buildings into useful commercial and community assets.  The CAPP Act provides the tools to make the HTC more accessible to strategic projects that create quality jobs, drive economic investment, revitalize “Main Street” districts, target difficult to develop areas and promote energy-efficiency.

According to data from the newly released Second Annual Report on the Economic Impact of the Federal Historic Tax Credit, conducted by researchers at Rutgers University’s Center for Urban Policy Research, historic rehabilitation created 145,000 local, high-paying jobs in 2009 and 2010 alone. Over the last thirty years the HTC has created over 2 million jobs and leveraged over $90 billion in private investment, while rehabilitating over 37,000 historic buildings.  The Report reaffirms the economic activity leveraged by the federal HTC program returns more tax revenue to the U.S. Treasury than the cost of implementing the program.  More important the study highlights the need for the CAPP Act to modernize the credit so it can adapt to the ever-changing economy.   John Leith-Tetrault, Chairman of the HTCC, said, “the provisions in the CAPP will bring the historic tax credit into the 21^st century allowing more buildings to be rehabilitated, creating more local jobs, and driving more investment into rural, and Main Street towns across America.  Based on Rutgers’ research we know that historic rehab, compared to other stimulus measures, is a cost effective way to generate jobs.”

The CAPP Act (H.R. 2479) encompasses five important changes to the current federal HTC program:

• Rebuilds, restores and revitalizes “Main Street” by driving economic investment and job creation to rural and smaller “Main Street” communities.  The bill increases the current 20 percent credit to 30 percent for small projects, those that have $5 million or less in qualified rehabilitation expenses, removing a current disincentive to developing small-scale-buildings, which often provide commercial space for small businesses and housing.

• Promotes energy-efficiency and cost-savings by providing an additional 2 percent credit to both the 10 and 20 percent credit if the building increases it energy efficiency by 30 percent or more.  The CAPP’s proposed changes will effectively reduce fossil fuel consumption and lower each buildings’ heating and cooling costs.

• Enhances the impact of Historic Tax Credit in low-income and difficult-to-develop-areas by removing a provision in the Internal Revenue Code that inhibits the ability of nonprofit organizations from undertaking the most difficult projects in communities in greatest need. The CAPP’s provisions would facilitate the reuse of older buildings by nonprofits for employment and community health centers, schools and affordable housing.

• Creates a more powerful historic tax credit by eliminating the federal taxation of the proceeds of state credits transferred through partnerships and sold as state tax certificates.  Economic studies prove that combining the federal and state historic tax credits create a powerful economic tool, however, the current federal taxation of state credits severely diminishes the full investment potential of state historic tax credits.  This can make the difference between a project’s success or failure.

• Creates new opportunities for the rehabilitation of older buildings removing barriers to the use of the 10% tax credit. The CAPP Act will remove the arbitrary date of 1936, which will allow a large number of structures that are currently ineligible to be eligible.  Greatly expanding the credit’s usefulness and the potential for comprehensive economic development by rehabilitating post-World War II buildings.

Click here to view the full text the CAPP Act (H.R. 2479).

About the Historic Tax Credit Coalition

HTCC is a public policy advocacy organization whose members represent historic tax credit industry participants including investors, syndicators, developers, preservation consultants, tax attorneys and accountants. To learn more, please visit http://historiccredit.wordpress.com.

The Second Annual Report on the Economic Impact of the Federal Historic Tax Credit can be accessed at http://ntcicfunds.com/rutgers-report