Legislation brings more predictability to program; elevates project "readiness"
(DES MOINES) - Governor Terry Branstad today signed legislation that strengthens and brings more predictability to the State Historic Preservation and Cultural & Entertainment District Tax Credit Program overseen by the Department of Cultural Affairs (DCA). Lt. Governor Kim Reynolds, DCA Director Mary Cownie and Dubuque businessman John Gronen and others joined Branstad for the signing ceremony at the Salisbury House in Des Moines.
"This program plays a major role in revitalizing Iowa's communities, generating economic opportunities and creating jobs for Iowans," said Branstad. "Future generations of Iowans will have historic buildings available to connect with earlier generations that made Iowa a great place to live. I thank the Iowa Legislature for passing this bill and it is my great pleasure to sign it. By signing this bill, I fully support the joint efforts of the Iowa Department of Cultural Affairs and the Iowa Legislature to improve the State Historic Preservation Tax Credit Program, which to date boasts more than one billion dollars of investments in Iowa's communities."
"This new legislation maintains the objectives of the program as originally introduced in 2001, while improving the Department of Cultural Affairs State Historic Preservation Office's ability to effectively distribute the tax credits," said Reynolds. "The changes to the current program all have one common end goal: more predictability."
The Iowa Legislature originally enacted the program to provide a state income tax credit of 25 percent of qualified costs for the rehabilitation of historic buildings. The goal was to encourage the private sector to protect historic properties, preserve the cultural heritage of Iowa communities and increase investment in local communities.
Since 2001, the state has invested $177 million in historic preservation tax credits, which have been the catalyst behind the rehabilitation of 283 historic buildings and the revitalization of 64 communities across Iowa. That investment has leveraged and attracted $890 million in investments, including $800 million for rehabilitation activities and an additional $90 million in related new construction.
Additionally, owners of historic properties, developers and community stakeholders have leveraged the program to reinvigorate mixed-used neighborhoods that attract entrepreneurs, small businesses and creative workforce seeking authentic and unique places to live and work.
"This program has been very popular among owners of historic properties and developers all across Iowa," said Cownie. "It has had a dramatic impact on retaining the authentic character-defining properties of our state and our overall quality of life, while also playing an important role in generating economic activity and creating job opportunities."
According to Iowa Department of Revenue survey results - for projects completed between July 1, 2009 and June 30, 2013:
- Projects employed over 9,200 workers during the various stages of the work, for an average of 2,300 jobs each of the four years for which data is available.
- Supported direct salaries and wages of $228.5 million and total spending on labor, materials, and other related expenses exceeding $537 million, with 84 percent of that spending occurring in Iowa.
- Property values at the time of project completion reflect a total of $205 million in increased assessed value. Because some of the properties receive property tax exemptions or abatements, it is not possible to accurately estimate the resulting change in property tax collections.
- And 53 of Iowa's 99 counties have seen historic buildings rehabilitated using the Historic Tax Credit.
The changes were a result of feedback gathered by a Governor-appointed stakeholder group assigned to look at the program and suggest improvements. The Governor's office worked with the Iowa Department of Cultural Affairs State Historic Preservation Office, the Iowa Legislature and the Stakeholders to improve the program.
Under the legislation signed today, Iowans will see a number of changes in the program:
- Elimination of a lottery-based tax credit reservation system in favor of a more predictable readiness-application process.
- Elevated emphasis on project pre-planning, financing and timeline.
- A transition from a three-year tax credit reservation system to a "use-when-you're-ready" system that offers more predictability for establishing project completion dates and submission of tax credit.
- Retools the review process to be more predictable for the applicant and the state.
- Uses an approach similar to other state tax incentive programs to promote consistency for tax preparers and for ease of administration.
The State Historic Preservation and Cultural & Entertainment District Tax Credit Program is overseen by the Department of Cultural Affairs State Historic Preservation Office (SHPO), a bureau of the State Historical Society of Iowa (SHSI).
The bill summary is as follows:
House File 2453: an Act relating to the administration of the historic preservation and cultural and entertainment district tax credit program by the Department of Cultural Affairs, providing for fees, and including applicability provisions.
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The Iowa Department of Cultural Affairs is responsible for developing the state's interest in the areas of the arts, history and other cultural matters with the advice and assistance from its three divisions: the State Historical Society of Iowa; the Iowa Arts Council; and Produce Iowa, the film, television and digital media office that supports media production in Iowa. DCA preserves, researches, interprets and promotes an awareness and understanding of local, state and regional history and stimulates and encourages the study and presentation of the performing and fine arts and public interest and participation in them. It implements tourism-related art and history projects as directed by the General Assembly and designs a comprehensive, statewide, long-range plan with the assistance of the Iowa Arts Council to develop the arts in Iowa. More information about DCA is available at www.culturalaffairs.org.
