Iowa lawmakers back historic rehab tax credit

DES MOINES, Iowa (AP) -- DES MOINES, Iowa (AP) -- A proposal to modify qualifying rules for tax credits that go to the restoration of historic buildings won final approval in the state Legislature Wednesday.

The bill won unanimous Senate backing and will now move to Gov. Terry Branstad.

The program, started in 2000, offers property owners or developers tax credits for 25 percent of qualifying rehabilitation costs in eligible historic buildings. Several types of properties are eligible, including those on the National Register of Historic Places and buildings in historic districts. Currently the state approves up to $45 million in credits in a fiscal year.

This legislation would modify the rules to qualify for the credit. Currently, a commercial project must have costs that equal half of the property's assessed value to qualify. Under this plan, the standard would be $50,000 or 50 percent of the property's assessed value. Other changes include extending the time frame for finishing the project.

The original bill from Senate Democrats would have increased the cap on credits offered in a fiscal year. But that provision was removed by lawmakers in the House.

Supporters of the legislation say it would help boost downtown development and residential housing in Iowa cities, like the new condos and shops in the East Village section of Des Moines.

These tax credits have gone toward major restoration projects around the state. In Dubuque the credits aided the renovation of an historic downtown department store building and the revitalization of a former industrial site.

Branstad spokesman Tim Albrecht said in a statement that the governor would review the legislation before deciding whether to sign it into law.