I 

117TH CONGRESS 

1ST SESSION H. R. 2294 

To amend the Internal Revenue Code of 1986 to modify the rehabilitation 

credit for certain small projects, to eliminate the requirement that the 

taxpayer’s basis in a building be reduced by the amount of the rehabilitation credit determined with respect to such building, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 1, 2021 

Mr. BLUMENAUER (for himself, Mr. LAHOOD, Ms. SEWELL, and Mr. HIGGINS

of New York) introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the rehabilitation credit for certain small projects, to 

eliminate the requirement that the taxpayer’s basis in 

a building be reduced by the amount of the rehabilitation 

credit determined with respect to such building, 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 2021’’. 


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1 SEC. 2. INCREASE IN REHABILITATION CREDIT. 

2 (a) IN GENERAL.—Section 47(a) of the Internal Rev3 enue Code of 1986 is amended by adding at the end the 

4 following new paragraph: 

5 ‘‘(3) INCREASED PERCENTAGE FOR QUALIFIED

6 REHABILITATION EXPENDITURES BEFORE 2027.— 

7 ‘‘(A) IN GENERAL.—In the case of any 

8 qualified rehabilitated building with respect to 

9 which there are qualified rehabilitation expendi10 tures paid or incurred in any taxable year be11 ginning after December 31, 2019, and before 

12 January 1, 2027— 

13 ‘‘(i) paragraph (2) shall be applied by 

14 substituting ‘the applicable percentage’ for 

15 ‘20 percent’ with respect to such expendi16 tures, and 

17 ‘‘(ii) the ratable share of such expend18 itures shall be determined separately under 

19 paragraph (2) by applying the applicable 

20 percentage for each such taxable year to 

21 the expenditures for each such taxable 

22 year. 

23 ‘‘(B) APPLICABLE PERCENTAGE.—For 

24 purposes of this paragraph, the term ‘applicable 

25 percentage’ means the percentage determined in 

26 accordance with the following table: 


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‘‘In the case of a taxable 

year beginning in: 

The applicable 

percentage is— 

2020 through 2024 ................................................................... 30

2025 .......................................................................................... 26

2026 .......................................................................................... 23

2027 and thereafter .................................................................. 20’’. 

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

2 this section shall apply to property placed in service after 

3 March 31, 2021. 

4 SEC. 3. INCREASE IN THE REHABILITATION CREDIT FOR 

5 CERTAIN SMALL PROJECTS. 

6 (a) IN GENERAL.—Section 47 is amended by adding 

7 at the end the following new subsection: 

8 ‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALL

9 PROJECTS.— 

10 ‘‘(1) IN GENERAL.—In the case of any small 

11 project— 

12 ‘‘(A) the percentage under subsection 

13 (a)(2) shall be 30 percent, and 

14 ‘‘(B) the qualified rehabilitation expendi15 tures taken into account under this section with 

16 respect to such project shall not exceed 

17 $2,500,000. 

18 ‘‘(2) SMALL PROJECT.—For purposes of this 

19 subsection, the term ‘small project’ means the reha20 bilitation of any qualified rehabilitated building if— 

21 ‘‘(A) the qualified rehabilitation expendi22 tures taken into account under this section (or 


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1 which would be so taken into account but for 

2 paragraph (1)(B)) with respect to such rehabili3 tation do not exceed $3,750,000, 

4 ‘‘(B) no credit was allowed under this sec5 tion with respect to such building to any tax6 payer for either of the 2 taxable years imme7 diately preceding the first taxable year in which 

8 expenditures described in subparagraph (A) 

9 were paid or incurred, and 

10 ‘‘(C) the taxpayer elects (at such time and 

11 manner as the Secretary may provide) to have 

12 this subsection apply with respect to such reha13 bilitation.’’. 

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

15 this section shall apply to taxable years beginning after 

16 December 31, 2021. 

17 SEC. 4. MODIFICATION OF DEFINITION OF SUBSTANTIALLY 

18 REHABILITATED. 

19 (a) IN GENERAL.—Section 47(c)(1)(B)(i)(I) is 

20 amended by inserting ‘‘50 percent of’’ before ‘‘the ad21 justed basis’’. 

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

23 subsection (a) shall apply to determinations with respect 

24 to 24-month periods (referred to in clause (i) of section 

25 47(c)(1)(B) of the Internal Revenue Code of 1986) and 


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1 60-month periods (referred to in clause (ii) of such sec2 tion) which begin after the date of the enactment of this 

3 Act. 

4 SEC. 5. ELIMINATION OF REHABILITATION CREDIT BASIS 

5 ADJUSTMENT. 

6 (a) IN GENERAL.—Section 50(c) is amended by add7 ing at the end the following new paragraph: 

8 ‘‘(6) EXCEPTION FOR REHABILITATION CRED9 IT.—In the case of the rehabilitation credit, para10 graph (1) shall not apply.’’. 

11 (b) TREATMENT IN CASE OF CREDIT ALLOWED TO

12 LESSEE.—Section 50(d) is amended by adding at the end 

13 the following: ‘‘In the case of the rehabilitation credit, 

14 paragraph (5)(B) of the section 48(d) referred to in para15 graph (5) of this subsection shall not apply.’’. 

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

17 this section shall apply to property placed in service after 

18 the date of the enactment of this Act. 

19 SEC. 6. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 

20 USE PROPERTY. 

21 (a) IN GENERAL.—Section 47(c)(2)(B)(v) is amend22 ed by adding at the end the following new subclause: 

23 ‘‘(III) DISQUALIFIED LEASE

24 RULES TO APPLY ONLY IN CASE OF

25 GOVERNMENT ENTITY.—For purposes 


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

2 a tax-exempt entity described in sec3 tion 168(h)(2)(A)(i) (determined with4 out regard to the last sentence of sec5 tion 168(h)(2)(A)), the determination 

6 of whether property is tax-exempt use 

7 property shall be made under section 

8 168(h) without regard to whether the 

9 property is leased in a disqualified 

10 lease (as defined in section 

11 168(h)(1)(B)(ii)).’’. 

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

13 this section shall apply to leases entered into after the date 

14 of the enactment of this Act. 

Æ 


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