II

106TH CONGRESS

2D SESSION S. 3259

To amend the Internal Revenue Code of 1986 to provide a rehabilitation

credit for certain expenditures to rehabilitate historic performing arts

facilities.

IN THE SENATE OF THE UNITED STATES

OCTOBER 27 (legislative day, SEPTEMBER 22), 2000

Mr. MOYNIHAN 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 provide

a rehabilitation credit for certain expenditures to rehabilitate historic performing arts facilities.

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 Performing

5 Arts Facility Rehabilitation Act’’.

6 SEC. 2. HISTORIC PERFORMING ARTS FACILITY REHABILI7 TATION CREDIT.

8 (a) IN GENERAL.—Section 47 of the Internal Rev9 enue Code of 1986 (relating to rehabilitation credit) is
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1 amended by adding at the end the following new sub2 section.

3 ‘‘(e) HISTORIC PERFORMING ARTS FACILITY REHA4 BILITATION CREDIT.—

5 ‘‘(1) IN GENERAL.—In lieu of the credit other6 wise allowable under this section, a qualified per7 forming arts institution shall receive an historic re8 habilitation credit certificate.

9 ‘‘(2) HISTORIC REHABILITATION CREDIT CER10 TIFICATE.—For purposes of this subsection, the

11 term ‘historic rehabilitation credit certificate’ means

12 a certificate—

13 ‘‘(A) issued to a qualified performing arts

14 institution, in accordance with procedures pre15 scribed by the Secretary, with respect to a cer16 tified rehabilitation,

17 ‘‘(B) the face amount of which shall be

18 equal to the credit which would (but for this

19 subsection) be allowable under subsection (a) to

20 the taxpayer with respect to such rehabilitation,

21 ‘‘(C) which may only be transferred by the

22 qualified performing arts institution to a lend23 ing institution (including a non-depository insti24 tution) in connection with a loan—
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1 ‘‘(i) the proceeds of which may not be

2 used for any purpose other than the reha3 bilitation of the historic performing arts

4 facility to which the credit relates, and

5 ‘‘(ii) the duration of which shall not

6 exceed the anticipated duration of the re7 habilitation, and

8 ‘‘(D) in exchange for which such lending

9 institution provides the qualified performing

10 arts institution—

11 ‘‘(i) a reduction in the rate of interest

12 on the loan which results in interest pay13 ment reductions which are substantially

14 equivalent on a present value basis to the

15 face amount of such certificate, and

16 ‘‘(ii) to the extent of any amount of

17 such certificate not applied under clause

18 (i), a reduction in the principal amount of

19 the loan in an amount substantially equiva20 lent on a present value basis to the face

21 amount of such certificate so applied.

22 ‘‘(3) USE OF HISTORIC REHABILITATION CRED23 IT CERTIFICATE BY LENDER.—The amount of credit

24 specified in the certificate and transferred to the

25 lender shall be allowed to the lender only to offset
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1 the regular tax (as defined in section 55(c)) of such

2 lender. The lender may carryforward all unused

3 amounts under this subsection until exhausted.

4 ‘‘(4) HISTORIC REHABILITATION CREDIT NOT

5 TREATED AS UNRELATED BUSINESS TAXABLE IN6 COME.—Notwithstanding any other provision of law,

7 no benefit accruing to the qualified performing arts

8 institution through the use of an historic rehabilita9 tion credit certificate shall be treated as unrelated

10 business taxable income for purposes of this title.’’.

11 (b) HISTORIC PERFORMING ARTS FACILITY.—Sec12 tion 47(c) of the Internal Revenue Code of 1986 (relating

13 to definitions) is amended by adding at the end the fol14 lowing new paragraph:

15 ‘‘(4) HISTORIC PERFORMING ARTS FACILITY.—

16 ‘‘(A) IN GENERAL.—The term ‘historic

17 performing arts facility’ means any building

18 and related improvements (including public pla19 zas and concourses, vehicular and pedestrian

20 passageways, mechanical installations, garages,

21 and other related structures and facilities)

22 which is—

23 ‘‘(i) a certified historic structure,
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1 ‘‘(ii) owned by, or leased or licensed

2 to, one or more qualified performing arts

3 institutions, and

4 ‘‘(iii) used for—

5 ‘‘(I) the presentation or produc6 tion of the performing arts,

7 ‘‘(II) education, training, or the

8 presentation of educational programs

9 in the performing arts,

10 ‘‘(III) research in, archiving of

11 records pertaining to, or operation of

12 public libraries for the performing

13 arts, or

14 ‘‘(IV) office and other functions

15 related to an activity described in sub16 clause (I), (II), or (III).

17 ‘‘(B) QUALIFIED PERFORMING ARTS INSTI18 TUTION.—The term ‘qualified performing arts

19 institution’ means any organization described in

20 section 501(c) and exempt from tax under sec21 tion 501(a) which is organized and operated to

22 present, produce, advance, teach or otherwise

23 facilitate the performing arts.

24 ‘‘(C) PERFORMING ARTS.—The term ‘per25 forming arts’ means the performance, playing,
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1 presentation, dissemination, recording, re2 hearsal, or creation of any type of music, the3 ater, drama, dance, opera, cabaret, film, video,

4 radio, or other art forms.’’.

5 (c) QUALIFIED REHABILITATION EXPENSES.—Sec6 tion 47(c)(2)(B) of the Internal Revenue Code of 1986

7 (relating to certain expenditures not included) is amended

8 by adding at the end the following new clause:

9 ‘‘(vii) SPECIAL RULES FOR QUALIFIED

10 PERFORMING ARTS INSTITUTIONS.—

11 ‘‘(I) GRANTS.—Any expenditure

12 by a qualified performing arts institu13 tion to rehabilitate an historic per14 forming arts facility to the extent

15 such expenditure is funded by any

16 grant from a Federal, State, or local

17 government in connection with the re18 habilitation of such facility.

19 ‘‘(II) EXPENDITURE OF LES20 SEE.—For purposes of clause (vi), a

21 qualified performing arts institution

22 that leases or licenses an historic per23 forming arts facility from a person

24 other than a qualified performing arts
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1 institution shall be treated as the

2 owner of the facility.

3 ‘‘(III) ENLARGEMENT; TAX-EX4 EMPT PROPERTY.—In the case of any

5 expenditure in connection with an his6 toric performing arts facility, clauses

7 (iii) and (v) shall not apply.’’.

8 (d) REHABILITATION CREDIT FOR PROPERTY USED

9 BY CERTAIN TAX EXEMPT ORGANIZATIONS.—Section

10 50(b)(3) of the Internal Revenue Code of 1986 (relating

11 to property used by certain tax-exempt organizations) is

12 amended by adding at the end the following new sentence:

13 ‘‘This paragraph shall not apply in the case of a rehabilita14 tion credit determined under section 47(a) with respect

15 to qualified rehabilitation expenditures (as defined in sec16 tion 47(c)) paid or incurred with respect to an historic

17 performing arts facility (as so defined).’’.

18 (e) EFFECTIVE DATE.—The amendments made by

19 this section shall apply with respect to a rehabilitation the

20 physical work on which begins after the date of the enact21 ment of this Act.

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