Congressman Aaron Schock (R-IL) has introduced legislation called the Creating American Prosperity through Preservation (CAPP) Act, H.R. 2479, that would provide a boost to local economic development through the restoration and reuse of historic buildings. Schock, a member of the House Ways and Means committee, the chief tax writing committee, introduced this bill to strengthened the Historic Tax Credit (HTC) already in place and is seen as a boost for the continued development in Springfield and surrounding communities.
"Historic preservation is an important cause in and of itself, but it also has demonstrated time and again that it can be a significant catalyst for economic growth," said Schock. "This legislation is an additional way to incentivize private sector job creation by renovating and invigorating downtown areas."
Schock's legislation will strengthen the current credit and make it more usable by targeting it to the rebuilding of historic downtown main streets while also encouraging every rehabilitation to become more energy efficient. The historic preservation credit is a permanent part of the tax code, and according to the National Trust for Historic Preservation, historic rehabilitation has created thousands of local, high-paying, high-skilled jobs yearly. In 2009 and 2010, historic rehabilitation created over 145,000 new jobs. In Illinois, between FY 2009 and 2010, according to the Historic Tax Credit Association, there were 3,188 jobs created from Historic Tax Credit Rehabilitation Investment.
"The primary purpose of my legislation is to enhance the ability of smaller renovations to benefit for the tax credit," said Schock. "The historic rehabilitation tax incentive has already been in use with the former Jennings Ford building in Springfield and in Lincoln with the Scully Building."
The CAPP Act strengthens the economic development impact of the Historic Tax Credit which has been in existence since 1981 and has lead to the rehabilitation of over 37,000 vacant or underutilized historic buildings, created over 2 million jobs and has leveraged over $90 billion in private investment. Specifically, the legislation will help smaller projects by increasing the credit from 20 percent to 30 percent for projects with $5 million or less in Qualified Rehabilitation Expenditures. CAPP Act also updates the date of construction timeline for the 20 percent historic tax credit and the 10 percent credit for non-historic older buildings. Thirty states have also enacted state historic tax credits to encourage the development of historic properties. Schock's legislation would eliminate the federal taxation of the proceeds of state credits transferred through partnerships and sold as state tax certificates.
The CAPP legislation will ensure that rural and smaller communities will benefit to a much larger extent. By strengthening the HTC it will help the credit so that it can adapt to the constantly changing economy and needs of communities. The legislation also promotes energy-efficiency and cost-savings by encouraging developers to use energy-efficient technology. A provision in the legislation would also facilitate the reuse of older buildings by nonprofits for projects of high community benefit while creating jobs and stimulating the local economy in low-income, underserved areas. The National Trust for Historic Preservation reports that since 2002, about two-thirds of all historic tax credit projects have been located in neighborhoods with family incomes at or below 80 percent of the area median.