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historicpreservation commission of south bend and st. joseph county ROOM 1123 COUNTY CITY BUILDING south bend, indiana 46601 (219) 284-9798 June 13, 1986 The Honorable Richard G. Lugar SH 306 Senate Office Building Washington, D. C. 20510 The Honorable Dan Quayle SH 524 Hart Senate Office Building Washington, D. C. 20510 Dear Senator I am extremely concerned about the threat to the investment tax credits for the rehabilitation of historic structures posed by the Tax Reform proposal as reported out of the Senate Finance Committee, which would render them virtually unusable. With these credits subject to the passive loss limitations, only individuals with sufficient passive income would be able to take advantage • of the incentive, and even then with some difficulty. This is contrary to the intent of Congress to create a tax law fair to all income levels. In fact, at present 64% of residential projects are under $150,000 and 78% of commercial projects are under $1,000,000. Under the proposed Tax Reform Bill this activity will cease. As you know, the rehab investment tax credits have been successfully used in Indiana both to save historically significant buildings and to revitalize com- munities. These developments have been shown to generate many times their worth in job salaries, state, local and federal income taxes, and property and sales tax. This has been one of the most successful public/private partnerships in the history of such programs. Because many of the certified rehabs are marginal economically, however, developers report that 70% of them would not have happened without the investment tax credit. I urge you to support the amendment to exempt the rehab ITC from passive loss limitations when it is presented on the Senate floor. Please express your support to your colleagues and urge them to retain this vital incentive to our nation's fabric and economy. Thank you,