II 

118TH CONGRESS 

1ST SESSION S. 639 

To amend the Internal Revenue Code of 1986 to improve the historic 

rehabilitation tax credit, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 2, 2023 

Mr. CARDIN (for himself, Mr. CASSIDY, Ms. CANTWELL, and Ms. COLLINS) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to improve 

the historic rehabilitation tax credit, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Historic Tax Credit 

5 Growth and Opportunity Act of 2023’’. 

6 SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR 

7 CERTAIN SMALL PROJECTS. 

8 (a) IN GENERAL.—Section 47 of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following new subsection: 


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1 ‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALL

2 PROJECTS.— 

3 ‘‘(1) IN GENERAL.—In the case of any qualified 

4 rehabilitated building or portion thereof— 

5 ‘‘(A) which is placed in service after the 

6 date of the enactment of this subsection, and 

7 ‘‘(B) which is a small project, 

8 subsection (a)(2) shall be applied by substituting ‘30 

9 percent’ for ‘20 percent’. 

10 ‘‘(2) MAXIMUM CREDIT.—The credit under this 

11 section (after application of this subsection) with re12 spect to any project for all taxable years shall not 

13 exceed $750,000. 

14 ‘‘(3) SMALL PROJECT.— 

15 ‘‘(A) IN GENERAL.—For purposes of this 

16 subsection, the term ‘small project’ means any 

17 certified historic structure or portion thereof 

18 if— 

19 ‘‘(i) the total qualified rehabilitation 

20 expenditures taken into account for pur21 poses of this section with respect to the re22 habilitation do not exceed $3,750,000, and 

23 ‘‘(ii) no credit was allowed under this 

24 section for either of the two immediately 


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1 preceding taxable years with respect to 

2 such building. 

3 ‘‘(B) PROGRESS EXPENDITURES.—Credit 

4 allowable by reason of subsection (d) shall not 

5 be taken into account under subparagraph 

6 (A)(ii).’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to periods after the date of the 

9 enactment of this Act, under rules similar to the rules of 

10 section 48(m) of the Internal Revenue Code of 1986 (as 

11 in effect on the day before the date of the enactment of 

12 the Revenue Reconciliation Act of 1990). 

13 SEC. 3. INCREASING THE TYPE OF BUILDINGS ELIGIBLE 

14 FOR REHABILITATION. 

15 (a) IN GENERAL.—Section 47(c)(1)(B)(i)(I) of the 

16 Internal Revenue Code of 1986 is amended by inserting 

17 ‘‘50 percent of’’ before ‘‘the adjusted basis’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 subsection (a) shall apply to taxable years beginning after 

20 December 31, 2022. 

21 SEC. 4. ELIMINATION OF REHABILITATION CREDIT BASIS 

22 ADJUSTMENT. 

23 (a) IN GENERAL.—Section 50(c) of the Internal Rev24 enue Code of 1986 is amended by adding at the end the 

25 following new paragraph: 


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1 ‘‘(6) EXCEPTION FOR REHABILITATION CRED2 IT.—In the case of the rehabilitation credit, para3 graph (1) shall not apply.’’. 

4 (b) TREATMENT IN CASE OF CREDIT ALLOWED TO

5 LESSEE.—Section 50(d) of such Code is amended by add6 ing at the end the following: ‘‘In the case of the rehabilita7 tion credit, paragraph (5)(B) of the section 48(d) referred 

8 to in paragraph (5) of this subsection shall not apply.’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to property placed in service after 

11 the date of the enactment of this Act. 

12 SEC. 5. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 

13 USE PROPERTY. 

14 (a) IN GENERAL.—Section 47(c)(2)(B)(v) of the In15 ternal Revenue Code of 1986 is amended by adding at the 

16 end the following new subclause: 

17 ‘‘(III) DISQUALIFIED LEASE

18 RULES TO APPLY ONLY IN CASE OF

19 GOVERNMENT ENTITY.—For purposes 

20 of subclause (I), except in the case of 

21 a tax-exempt entity described in sec22 tion 168(h)(2)(A)(i), the determina23 tion of whether property is tax-exempt 

24 use property shall be made under sec25 tion 168(h) without regard to whether 


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1 the property is leased in a disqualified 

2 lease (as defined in section 

3 168(h)(1)(B)(ii)).’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to property placed in service after 

6 the date of the enactment of this Act. 

Æ 


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