A new grant program will create a fresh start for Hoosier developers to preserve and rehabilitate historic properties that could bring more tax revenue to the state, starting in fiscal year 2017.
With the switch, the state is abandoning a tax credit program that had the same purpose but became backlogged and eventually all but useless.
“The problem with the limit on the old program was there was no money available, it pretty much ground to a halt in recent years,” said Rep. Ed Clere, R-New Albany.
Since the creation of the tax credit program in 1994, more than $11 million in tax credits have been approved for 199 projects. However as time passed, Indiana developers would’ve waited for several years before being awarded their credit. Twelve years to be exact.
Preservationists said the wait was too long to make the incentive worthwhile, pushing the Interim Study Committee on Fiscal Policy to study the issue during the summer of 2014.
Rep. Tim Brown, R-Crawfordsville proposed the new program in the 2014 Session, saying that it would help make for a more “honest and transparent” budget in the years to come.
The new program allows the Office of Community and Rural Affairs (OCRA) to provide a grant to a person or organization undertaking a qualifying historic rehabilitation project. The maximum allowable grant equals 20 percent of the qualifying rehabilitation expenses approved by OCRA.
The total grants awarded through this program will depend on the number of applicants, OCRA’s approval process and the amount of funds appropriated to the program. The bill appropriates $1.25 million in fiscal year 2017, in comparison to the tax credit cap of $450,000.
Clere was adamant about passing the tax credit program in previous years, introducing several bills in an effort to move it forward.
However now that the tax credit has been removed, he said that he is “sorry to see it go,” but does hope the new grant program will cause positive changes for Indiana communities and economic industries.
“I hope the grant program provides a fresh start – I hope it gives us an opportunity to see that a program like this can work and can be effective,” said Clere.
President of Indiana Landmarks Marsh Davis said he had hoped the tax credit could be reformed, but he is grateful there is still a program of some kind.
“Rehabilitation is one of the hallmarks of economic revitalization- here and across the nation,” Davis said. “And Indiana is falling behind our neighbors.”
Davis and Clere both said the downside to the new program is that the residential credit was dropped from the funding at the last minute. Davis said that it is something they want they want to get back in the future.
“It’s a minor but meaningful incentive for owners of historic property who don’t have any other sources of assistance,” Davis said.
Katie Stancombe is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students.