Pennsylvania Historic Preservation Tax Credit Program

Pennsylvania Historic Preservation Tax Credit Program
Name	Pennsylvania Historic Preservation Tax Credit Program
Established	1997
Administered by	Pennsylvania Historical and Museum Commission
Type	Historic preservation tax incentive
Location	Pennsylvania

Pennsylvania Historic Preservation Tax Credit Program The Pennsylvania Historic Preservation Tax Credit Program provides state-level tax incentives to encourage rehabilitation of historic properties in Pennsylvania. It operates alongside federal incentives such as the Federal Historic Preservation Tax Incentives and interacts with state entities including the Pennsylvania Historical and Museum Commission, the Pennsylvania Department of Revenue, and local municipalities across cities like Philadelphia, Pittsburgh, and Harrisburg. Projects often involve partnerships among developers, preservationists, lenders, and nonprofit organizations such as the National Trust for Historic Preservation and regional groups including the Preservation Pennsylvania.

Overview

The program was created to stimulate rehabilitation of historic buildings and to promote investment in urban revitalization in places like Reading (Pennsylvania), Bethlehem (Pennsylvania), and Lancaster County, Pennsylvania. Modeled to complement the Federal Historic Preservation Tax Incentives and informed by practices from states such as New Jersey, Massachusetts, and Maryland, it offers credits for certified rehabilitations of properties listed on the National Register of Historic Places, contributing properties within Historic districts in the United States, or locally designated landmarks reviewed by agencies like the Pennsylvania Historical and Museum Commission.

Eligibility and Qualified Rehabilitation

Eligible properties include individually listed buildings on the National Register of Historic Places, contributing properties in certified historic districts like those in National Historic Landmarks in Pennsylvania, and certain local landmarks certified by the Pennsylvania Historical and Museum Commission. Applicants must follow the Secretary of the Interior's Standards for Rehabilitation and submit documentation similar to the Historic American Buildings Survey and rehabilitation plans used in notable rehabilitations such as the Pumping Station (Pittsburgh) or conversions like the Trolley Station (Philadelphia). Eligible work typically excludes new construction and focuses on historic fabric, systems upgrades, and preservation of character-defining features documented by preservationists from organizations such as the Association for Preservation Technology International.

Application and Approval Process

The multi-step process begins with pre-application consultation with the Pennsylvania Historical and Museum Commission and often includes coordination with local review boards such as Philadelphia Historical Commission or county historic commissions in places like Allegheny County, Pennsylvania. Applicants submit Part 1 documentation establishing historic status, Part 2 describing proposed rehabilitation consistent with the Secretary of the Interior's Standards for Rehabilitation, and Part 3 documenting completed work—paralleling processes used by the National Park Service for federal credits. Projects undergo review by state staff and sometimes by nonprofit advisors from groups like the National Trust for Historic Preservation or regional preservation corps such as the Heritage Conservancy (Doylestown).

Credit Structure and Financial Mechanisms

The program historically provided a refundable or transferable tax credit equal to a percentage of qualified rehabilitation expenditures, enabling financing structures that involve syndication to investors, equity layering with tax-exempt bonds such as Private Activity Bonds, and leveraging with New Markets Tax Credit investments in distressed census tracts. Developers often pair state credits with the Federal Historic Preservation Tax Incentives and utilize financial intermediaries including community development financial institutions like the Local Initiatives Support Corporation and banks active in projects in Scranton, Pennsylvania and Erie, Pennsylvania. Mechanisms include credit transferability, which facilitates transactions between taxpayers and corporate investors similar to models used in states like New York (state), and the use of compliance monitoring to ensure long-term preservation covenants.

Impact and Economic Outcomes

Evaluations tie the credit program to job creation, private capital investment, and revitalization of downtowns in cities such as Philadelphia, Pittsburgh, Allentown, Pennsylvania, and Wilkes-Barre. Economic analyses by state agencies and think tanks compare outcomes to programs in Ohio, Indiana, and Michigan and document multiplier effects in construction trades represented by unions like the International Union of Bricklayers and Allied Craftworkers and firms engaged in adaptive reuse like those who worked on the Pennsylvania Academy of the Fine Arts renovation. The program has supported conversions of historic industrial sites similar to projects at the Reading Terminal and contributed to heritage tourism promoted by entities such as VisitPittsburgh.

Administration and Oversight

Administration rests with the Pennsylvania Historical and Museum Commission in coordination with the Pennsylvania Department of Revenue and oversight from legislative committees such as the Pennsylvania General Assembly appropriations and finance committees. Compliance includes historic preservation easements, monitoring by preservation officers, and coordination with federal agencies like the National Park Service when federal credits are also claimed. Nonprofit partners, municipal planning departments, and state auditors occasionally participate in audits, program evaluations, and public reports akin to reviews conducted for state incentives in New Jersey and Maryland.

Criticism and Legislative History

Critiques focus on fiscal cost, equity of benefits favoring urban developers, and administrative capacity—issues debated in the Pennsylvania General Assembly and by advocacy groups such as Preservation Pennsylvania and the Pennsylvania Budget and Policy Center. Legislative history includes reforms, cap adjustments, and proposals to expand or restrict transferability, reflecting experiences in states like North Carolina and Georgia. High-profile legislative debates have involved stakeholders including municipal officials from Philadelphia City Council and finance committees influenced by analyses from think tanks like the Brookings Institution and regional chambers of commerce such as the Allegheny Conference on Community Development.

Category:Historic preservation in Pennsylvania