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Senate committee considers extending timeline and transferability for historic rehabilitation tax credit
Summary
Senate File 2115 would extend the placement‑in‑service window for the state historic rehabilitation tax credit from three to six years, allow a second reassignment of credits, and requires returns from original and assigned certificate holders; the bill was amended and laid over for further consideration.
Senate File 2115, introduced in the Minnesota Senate Taxes Committee, would change two features of the state's historic rehabilitation tax credit: it would extend the required placement‑in‑service deadline for projects from three years to six years and allow an additional assignment of credit certificates before the first assignee claims payment. The committee adopted the author's amendments by voice vote and laid the bill over for further consideration.
The author's amendment makes the extended placement‑in‑service period effective retroactively for projects with allocation certificates issued after June 30, 2021. The bill's second change permits an assignee to transfer the credit in whole to a second assignee prior to the first assignee's payment claim and requires the original certificate recipient and each assignee to file a tax return for the year the project is placed in service.
"This bill makes two changes...it changes the deadline from three to six years and as my testifier will explain this three year deadline is increasingly causing issues," Senator Clark said when presenting the bill on the Senate floor.
John Green, a senior project manager with AWH Architects who works primarily on historic buildings, testified that large rehabilitation projects often require phased work and extended coordination with the State Historic Preservation Office and the National Park Service. He described a recent Duluth Central High School project converting a 160,000‑square‑foot school into apartments and said the current three‑year rule can present a financing and compliance risk for multi‑phase projects.
Senator Drazkowski asked whether assignment provisions in tax credit programs had previously been exploited for fraud and whether SF 2115 could create vulnerabilities. "I am unaware of any," Senator Clark replied, stressing the change was intended to make the credit more usable for investment partners. Committee members also noted the University of Minnesota's annual analysis of the historic tax credit, which the author included in the bill packet.
The committee adopted the listed amendments by voice vote. Senate File 2115 as amended was laid over for further consideration; no final action or roll‑call vote on adoption of the bill itself was recorded in the hearing transcript.
