Lawmakers debate raising per-project historic-preservation tax credit cap to $1.5 million

Representative Gogener introduced House Bill 1572, which would raise the per-project maximum for the state historic-preservation tax credit from $500,000 to $1.5 million and make several technical changes supporters say will make larger rehabilitation projects feasible.

“...we have increased the annual cap on the historic preservation tax credits ... to 20,000,000 just last year in 2024. Clearly, the interest in preserving historic buildings continues to increase, but... the cap on the amount of credits 1 project can receive... remains at 500,000. My legislation increases the per project maximum credits to 1 and a half million,” Representative Gogener said.

Mindy Crawford, executive director of Preservation Pennsylvania, testified in support and provided program history and outcomes. Crawford said the state program works with the federal historic tax credit and has helped rehabilitate thousands of buildings; she described a strong record of leveraging private investment and job creation. Crawford listed three technical limitations she would like the legislation to address: the per-project cap, nonprofit eligibility rules for limited liability partnerships involved in affordable-housing projects, and the current flat $100 application fee that she said does not cover review costs.

Crawford said raising the per-project cap would improve feasibility on large projects where rehabilitation costs are high. She told the committee the state program issues credits only after work is complete and noted prior analysis that found the program returns value to the state treasury before credits are issued.

Members asked how credits are currently awarded; Crawford said DCED divides awards among five regions and uses a random-number process to select projects within regions under the present rules, with many projects receiving $250,000 shares when the per-project cap and available annual pool were smaller. Several members raised concerns about whether the change would concentrate awards on a smaller number of large projects rather than spreading funding more widely across the state. Representative Griner and others asked for lists of prior awardees and sought assurances about the timing of the $20 million pool becoming available for the application cycle in October.

The committee did not take a final vote on this proposal at the meeting; the chair said he intends to bring the bill up for a committee vote next week. Supporters asked the committee to consider additional adjustments, including clarifying nonprofit eligibility in LLCs for affordable-housing projects and revisiting the flat application fee to reflect staff review costs.

Next steps: Representative Gogener plans to seek a committee vote next week; stakeholders and DCED will be sources to watch for implementation and allocation details if the change is enacted.