This week, the Senate and House will be preparing conference reports on the state budget. It is likely that legislators will spend a fair amount of time in conferences set for this week. However, there is the persistent possibility that legislation related to the historic preservation tax credit may be put into action. The following are bills that the Coalition for Historic Preservation and Economic Development will be watching carefully as the week continues.

Senate Substitute for Senate Committee Substitute for House Committee Substitute for House Bill 191

It is likely that a substitute for the House’s original economic development bill will be brought to the Senate floor at some point this week. An earlier version of this substitute is available on the Coalition’s legislative update page. It is anticipated that the legislation will include a $100 million cap on historic tax credit, with supplemental appropriations, and a per-project cap on residential rehabilitation.

House Committee Substitute for Senate Bill 377

This bill has been placed on the informal calendar, and may be brought to the House floor this week. It currently contains a $165 million cap, with exemptions for projects that receive less than $350,000 of historic credits. Language is available on our legislative update page.

House Committee Substitute for Senate Bill 280

Although HCS/SB 280 currently exists as a bill which calls for insurance companies’ exemption from state corporate income and franchise taxes, it is suspected that this bill could be used as a vehicle for economic development language. And, given that historic tax credit cuts have frequently been tacked on to such bills throughout this year’s session, HCS/SB 280 is a bill of interest.

House Committee Substitute for Senate Bill 215

After hitting a roadblock in the Senate on Thursday of last week, this bill now has the potential to come up at any time. Currently, HCS/SB 215 does not contain any tax credit language. However, it is possible that the bill could be sent to conference and allowed to include historic tax credit cutbacks if the Senate and House vote to exceed the differences.

(Legislative Update courtesy of Missouri Coalition for Historic Preservation & Economic Development)

Courthouse (Lexington, MO)

Missouri’s Historic Tax Credit program is under fire by a group of senators who have sought to frame this debate in terms of “urban” versus “rural.” They cite examples such as the plans for the Ballpark Village in St. Louis to argue that the Historic Tax Credits only benefit big developers in urban centers.

The reality is, however, that HTCs have actually been used by communities across the state of Missouri. Cities and towns that have utilized HTCs include: Arcadia, Boonville, Butler, California, Cape Girardeau, Carthage, Chesterfield, Chillicothe, Clarksville, Columbia, Danville, Excelsior Springs, Farmington, Fayette, Ferguson, Florissant, Fulton, Glasgow, Hannibal, Hartsburg, Hermann, Independence, Jefferson City, Joplin, Kansas City, Kennett, King City, Kirkwood, Lee’s Summit, Lexington, Liberty, Louisiana, Manchester, Maplewood, Neosho, Nevada, New Haven, New Melle, North Kansas City, Osceola, Park Hills and Pilot Grove, through Rocheport, St. Charles, St. Joseph, St. Louis, Ste. Genevieve, Sedalia, Springfield, Trenton, University City, Webster Groves, Wellston, West Plains, Weston, Wildwood and Wright City.

According to the Missouri Coalition for Historic Preservation and Economic Development, between 1998 and 2006, more than 900 historic renovation projects were completed across the state of Missouri in 37 counties and 55 communities.

Courthouse Square Historic District (West Plains, MO)

Another important fact is that the vast majority of HTCs in Missouri have not gone to large-scale redevelopment projects, but rather to small homeowners and developers. The break-down goes like this: Over the past decade, only 11% of all projects spent over $5 million in rehabilitation, while 2/3rds were less than $500,000. The people that really benefit from this tax credit are not the big developers, but rather, the independent “mom and pop” in communities across the state.

Not only is the HTC program is utilized by developers statewide, but also large historic preservation projects in places like Springfield, Jeff City, KC, and St. Louis employ many laborers from small communities across Missouri. These renovation projects typically require a high level of skill, and therefore are some of the highest paying blue-collar jobs available.

If the HTC program receives a cap and becomes subject to annual appropriations, obtaining this tax credit will become a political process. Leaving the HTC uncapped allows for it to function through efficient markets; whereas putting a limit on it subjects the HTC to lobbyists and those with political power. Based on the “reformers” arguments, it is ironic to realize that capping the HTC would end up benefiting big developers, while limiting the availability of tax credits in small communities across Missouri.

It is vital to continue the historic tax credit program without any changes so that the credits may continue to spread to smaller communities throughout the state.

Southeast Missourian Newspaper Building (Cape Girardeau, MO)