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Record Number of Historic Tax Credit Applications

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The Minnesota State Rehabilitation Historic Tax Credit, signed into law by Governor Pawlenty in 2010, was designed to closely align with the federal 20% Rehabilitation Tax Credit. This close alignment created a state program that has been described as one of the easiest and simplest state credit programs to use. However, this close alignment created difficulties as the state program neared the statue required sunset date of June 30th, 2021.

For projects to remain eligible to claim a Minnesota state credit they needed to receive a state allocation certificate before the June 30th deadline. However, MN SHPO can only issue the allocation certificate after the application has gone through the full state and federal review processes. Technical Preservation Services at the National Park Service (TPS) certifies the Part 2 application, and the National Register at the National Park Service places the property into the National Register. During initial planning stages for the sunset, a large influx of projects were projected but it was still unknown how many would complete the application process. MN SHPO staff created a communication series for applicants discussing the requirements needed to receive allocation certificates by the sunset date, for nominating properties not yet on the National Register of Historic Places, and worked with TPS to coordinate an anticipated influx of reviews.

Shortly before developers were expected to submit their project applications, the COVID-19 pandemic broke out requiring staff to work remotely and move from a largely paper process to an electronic one. During this period of transition, staff focused on developing new procedures that allowed for electronic submissions while still collecting fees and issuing paper allocation and credit certificates. Though there were concerns early on that many hopeful projects would be stymied by the pandemic, numerous projects made efforts to enter into the application process to have their projects certified by the deadline. In fact, the number of projects submitted in 2021 far exceeded the previous year's application numbers.

The MN SHPO brought on two temporary design reviewers, one through a quick-call proposal and a second through an interagency agreement with Minnesota's Department of Transportation Cultural Resources Unit (both former historic tax credit reviewers), to allow for the influx of reviews to be completed in a timely manner. Significantly more coordination was required with the applicants and new four design reviewers, as many of them rushed to complete applications and project plans before they had gone through their own traditional due diligence and processes.

The partnership between MN SHPO and TPS was an asset to the process as staff at both agencies established a standing meeting that allowed reviewers from both agencies to quickly consult on project questions, reviews in general, and discuss a number of strategies for facilitating quality applications. TPS worked hard to organize their schedules to make room for the influx of Minnesota applications that were mostly submitted between January and June, while impacting other states' reviews as little as possible. 

In the end, TPS and MN SHPO worked to coordinate and certify all the projects that applied to the program within the tight timeframe. Staff at both agencies reviewed a record number of project applications—all while major work and life transitions were underway due to the pandemic. Ultimately, the Minnesota Legislature extending the sunset of the state program but only for one additional year. The next legislative session begins January 31, 2022.

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