BILL NUMBER: S4267 Revised 04/23/26
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the parks, recreation and historic preservation law and
the tax law, in relation to establishing the historic preservation tax
credit transfer program
 
PURPOSE OR GENERAL IDEA OF BILL:
To authorize a single transfer of historic preservation tax credits
between taxpayers when such tax credits are paired with low-income hous-
ing tax credits to create more affordable housing units. This increases
the value of the historic preservation tax credits and reduces the
amount of state subsidy needed to fund such affordable housing projects.
 
SUMMARY OF PROVISIONS:
Section one: adds new article 14-A of the parks, recreation and historic
preservation law to establish the Historic Preservation Tax Credit
Transfer Program.
Section 14.15 establishes the short title.
Section 14.16 provides a statement of legislative findings and declara-
tion.
Section 14.17 defines key terms, including "eligible project", "eligible
transferee", "eligible transferor", "federal rehabilitation credit",
"historic preservation tax credit transfer", "non-profit intermediary",
"rehabilitation credit", "qualified rehabilitation expenditures", and
"taxpayer".
Section 14.18 establishes transfer eligibility criteria. Subsection 1
sets forth eligibility criteria for transferors, and subsection 2 sets
forth eligibility criteria for transferees. Subsection 3 permits trans-
fers in whole or in part provided such partial transfers are not less
than 25% of the full rehabilitation credit, and authorizes bifurcated
transfers, including retention of the rehabilitation credit by an eligi-
ble transferor even while such transfer opts to transfer the federal
rehabilitation credit for the same eligible project. Subsection four
directs an eligible transferee to use or report such credit in the taxa-
ble year for which it is allowed and prevents further transfer of such
credit, provided that a non-profit intermediary which receives a trans-
fer from an eligible transferor may transfer the credit on to an eligi-
ble transferee.
Section 14.19 provides for the allowance of credit, amount and limita-
tions. Subsection one allows credit to an eligible transferor or an
eligible transferee which has entered into a transfer contract with such
eligible transferor. Subsection 2 sets forth the minimum elements to be
specified in a transfer contract between an eligible transferor and
eligible transferee. Taxpayers shall file an historic preservation tax
credit transfer statement, including the proposed transfer contract,
with the commissioner prior to transfer and must receive the commission-
er's approval for the transfer. If approved, the commissioner shall
issue a certificate of historic preservation tax credit transfer. If
denied, the commissioner shall provide a written determination of
denial. The commissioner shall maintain an auditable record of valid
certificates of historic preservation tax credit transfer to be provided
to the department of taxation and finance at least annually or upon
request more frequently.
Section 14.20 authorizes a historic preservation tax credit transfer.
Section 14.21 provides the powers and duties of the commissioner of
parks, recreation and historic preservation.
Sections two: amends section 14.05 of the parks, recreation and historic
preservation law by adding a new subdivision (5) to require the commis-
sioner to report annually on the historic rehabilitation tax credit
projects applied for under sections 210-B, 606, and 1511 of the tax law
and to detail the information to be reported.
Section three: adds new section 50 of the tax law to establish the
parameters of the historic preservation tax credit transfer, including
the allowance of the credit, eligibility, requirements for a taxpayer's
tax return and credit recapture.
Sections four through six: amend subdivision 26 of section 210-b,
subsection oo of section 606 and subdivision y of section 1511 of the
tax law, respectively, by adding the same language to each provision to
remove census tract limitations for qualified rehabilitation projects
which also qualify for low-income housing tax credits under article 2-A
of the public housing law, authorize transfers of the state historic
preservation tax credit without regard and in a separate manner from the
transfer of any federal rehabilitation tax credit, and provide for annu-
al reporting of the aggregate amount of credits claimed under the rele-
vant subsections.
Section seven: sets forth the effective date of the bill.
 
JUSTIFICATION:
This legislation aims to encourage the rehabilitation of older, historic
buildings as affordable housing. Pairing historic preservation tax cred-
its with low-income housing credits can make these projects possible,
and this bill increases the value of the historic preservation credits
by allowing them to be transferred or sold, similar to what is already
permitted for low-income housing credits.
Federal law provides for a 20% federal income tax credit to support
substantial rehabilitation of buildings that are on the National Regis-
ter of Historic Places, if the project is approved by the National Park
Service. The New York State Historic Tax Credit (HTC) is similarly
designed to subsidize rehabilitation of historic income-producing prop-
erties, providing a credit for 20% of qualified expenditures under $5
million, or 30% of qualified expenditures under $2.5 million. The Legis-
lature and the Governor extended the State program for five additional
years in the State budget enacted in May 2023.
Current State law requires the NYS HTC to be allocated in the same
manner and to the same parties as the federal credit, such that projects
may get a total credit of 40% for projects with expenditures under $5
million or 50% for projects with expenditures under $2.5 million. Howev-
er, when both the federal and state HTC are allocated to the same inves-
tor, the pricing of the credits is typically less than if the NYS HTC
could be allocated and sold separately from the federal HTC, because
there is a smaller number of investors willing to competitively purchase
both. This problem is compounded in affordable housing historic rehabil-
itation projects, where the federal and NYS HTC are combined with the
federal Low-Income Housing Tax Credit (LIHTC), because in such cases,
current state law requires the same credit investor to take the federal
HTC, the NYS HTC, and the federal LIHTC together. This scenario
depresses the pricing of all three credits, as the investor pool for
such projects, especially in those areas most in need of housing invest-
ment, is extremely limited.
As federal LIHTC is one of the largest sources of funding for affordable
housing projects, the inability for New York to attract different inves-
tors for federal and state HTC hurts affordable housing development in
historic buildings statewide and creates funding gaps in such projects
because of the depressed pricing across all credits. State taxpayers end
up picking up the tab for these funding gaps, as the state housing agen-
cy, New York State Homes and Community Renewal (HCR), must then fill
these gaps with limited state capital money. And with limited available
capital, some projects competing for resources may not happen, meaning
affordable units do not get developed and buildings would not be
preserved. The bifurcation of federal and NYS HTC investments is there-
fore critical to the generation of affordable housing in New York.
This legislation also increases the value of the HTC by allowing a non-
profit entity like a nonprofit affordable developer or a historic pres-
ervation organization to accept the credits and then sell them to a
taxpayer on behalf of the project. As non-profit entities are tax
exempt, this means that the credit sale will be exempt from federal tax,
resulting in more capital for the project, which in turn lowers the need
for any HCR subsidies to fully finance a historic preservation and
affordable housing project.
 
PRIOR LEGISLATIVE HISTORY:
2024:
A.9722 (Woerner): Referred to Ways and Means.
S.9071 (Kavanagh):
PASSED SENATE.
2025:
S4267 (Kavanagh) - A version of this bill was enacted in the FY
2025-2026 Adopted Budget, Revenue Part F (S3009C, Ch. 59 of 2025), to
allow the recipient of the New York State Historic Tax Credit to trans-
fer the credit to another person or entity with approval from the NYS
Parks Commissioner. Revenue Part F also removed the geographical
restrictions on historic tax credit projects in exchange for extending
housing affordability for at least 30 years.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on and after January 1, 2026.

Statutes affected:
S4267: 14.05 parks recreation and historic preservation law, 210-B tax law, 210-B(26) tax law, 606 tax law, 606(oo) tax law, 1511 tax law