Heritage Structure Rehabilitation Tax Credit Program summary, 2004

Final Report of the Governor’s Task Force on the Heritage Structure Rehabilitation Tax Credit Program Executive Summary The discussions of this Task Force were thorough, informative and often spirited. The diversity and knowledge of its membership allowed it to waste little time in getting to the core issues of its investigation of the Heritage Structure Rehabilitation Tax Credit Program. All aspects of the Program were discussed from several points of view. Ultimately, the group determined the Heritage Structure Rehabilitation Tax Credit Program to be the most successful economic and community revitalization tool available in the State today. As such, the recommendations generated by the Task Force do not include further broad restrictions on the Program. RECOMMENDATIONS • Extend the Program from June 1, 2004 to January 1, 2010. ® Remove the S 1 5 million aggregate cap on commercial rehabilitation credits in 2004; • Permit the Board of Public Works to waive the S3 million cap on theamount of credit for individual commercial rehabilitations in special circumstances; « Make minor changes to improve the efficiency of the Program; and • Authorize the Maryland Historical Trust to adopt reasonable fees for application reviews. FINDNGS AND JUSTIFICATION « The Program has been extremely successful in revitalizing deteriorated downtowns and neighborhoods, combating blight, creating jobs, strengthening local tax bases, stimulating Maryland’s economy and preserving historic resources; • Key major projects would not have been undertaken if the credit had not been available; • Although the commercial credits have been most used in the part of the State with the most older buildings, the benefits of the Program have been felt in all parts of the State; • The Program is self-financing and does not require an outside revenue source. The total fiscal benefits of the Program, taken as a whole, far exceed the costs to the Treasury; • The Program generates approximately 34 cents in tax revenues for every dollar of tax credit during construction before any claim can be made for the tax credit; • The Program generates an average return to the State of approximately S 1 .02 during the first year after a project’s completion, and S3. 31 within five years after project completion for every dollar of tax credit earned; ' • The Program assisted more than 1,000 rehabilitation projects (commercial and residential) as of the end of 2003; generated S400 million in private investment