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WHAT IS HB
851?
HB 851 is a Technical Corrections
Bill to Amend the Georgia State Income Tax Credit
for Rehabilitated Historic Property (OCGA
48-7-29.8). The proposed changes are as follows:
• Raises the $5,000 per project cap to $100,000 for
residential properties and $300,000 for commercial
• Increases the credit to 25%, from 10% for
residential and 20% for commercial
WHY HB 851?
• State tax credit projects build back communities
and often have a catalytic effect on their
community. When a community landmark (a mill,
downtown storefront, school, etc.) or a few key
residences are rehabilitated, the area around it
often revitalizes. Macon has seen drastic
improvements in public safety, vigorous infill
construction, and an increase in work force housing
in neighborhoods where rehabilitation projects
sparked widespread revitalization. The first five
years of Rhode Islands program saw more investment
in historic rehabilitation than in the previous 25
years combined.
• State tax credits are a good investment and
attract federal investment. The total economic
impact of a state tax credit far exceeds its cost.
Recent studies show that $1 in rehabilitation tax
credits leverages $11.43 in Michigan or $5.35 in
Rhode Island. Commercial projects, which are used in
combination with the federal tax credit, bring in
substantial federal investment.
• State tax credit projects create an ongoing
economic impact, including a high rate of new job
creation. Rehabilitation is more labor intensive
than new construction, and studies have shown it to
create more jobs than the same investment in
manufacturing (Michigan), oil (Oklahoma), coal (West
Virginia), and steel (Pennsylvania). Rehabilitation
also creates new businesses, increases property and
sales tax revenues, and stimulates private
investment.
• State tax credit projects increase affordable
housing. Tax credits provide non-profit developers
with a tool in assembling the financing necessary to
create affordable housing, while they also make
for-profit developers consider both market-rate and
affordable units in urban neighborhoods.
• State tax credit projects offer a smart strategy
for sustainable growth that recycles scarce natural
resources and materials, conserves energy, re-uses
the existing infrastructure, reduces the need for
new, imported raw materials, and reduces
construction waste going to landfills.
• State tax credit projects increase the opportunity
for heritage tourism. When announcing his 2005
Heritage Tourism Initiative, Georgia Governor Sonny
Perdue said "Tourism is the second largest industry
in Georgia and brought an economic impact of $26
billion to our state in 2004” and called for the
development of more historic tourism sites.
• Georgia is losing private investment in
rehabilitation projects to other states. Every state
with a state tax credit offers a higher or no per
project cap. Every state with a residential state
tax credit offers higher rates, and twelve states
have higher rates for commercial properties. Each of
the Southeastern states that offers a state tax
credit has a more attractive program. |
