I 

115TH CONGRESS 

1ST SESSION H. R. 1158 

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

Rehabilitation Tax Credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 16, 2017 

Mr. KELLY of Pennsylvania (for himself, Mr. BLUMENAUER, Mr. PALAZZO, 

Mr. THOMPSON of Mississippi, Mr. RICHMOND, Ms. SEWELL of Alabama, 

Mr. HARPER, Mr. MEEHAN, Mr. TURNER, Mr. REICHERT, Mr. SESSIONS, 

Mr. KIND, Mr. BYRNE, Ms. TSONGAS, Mr. MCGOVERN, Ms. DELBENE, 

Ms. NORTON, and Mr. TIBERI) 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 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 Improvement Act of 2017’’. 


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1 SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR 

2 CERTAIN SMALL PROJECTS. 

3 (a) IN GENERAL.—Section 47 of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALLER

7 PROJECTS.— 

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

9 rehabilitated building or portion thereof— 

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

11 date of the enactment of this subsection, and 

12 ‘‘(B) which is a smaller project, 

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

14 percent’ for ‘20 percent’. 

15 ‘‘(2) MAXIMUM CREDIT.—The credit deter16 mined under this subsection with respect to any 

17 smaller project for all taxable years shall not exceed 

18 $750,000. 

19 ‘‘(3) SMALLER PROJECT DEFINED.— 

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

21 subsection, the term ‘smaller project’ means 

22 any qualified rehabilitated building or portion 

23 thereof if— 

24 ‘‘(i) the qualified rehabilitation ex25 penditures taken into account for purposes 

26 of this section (or would have been so 


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1 taken into account if this subsection had 

2 been in effect for all prior periods) with re3 spect to the rehabilitation are not over 

4 $3,750,000, and 

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

6 section for either of the 2 prior taxable 

7 years with respect to such building. 

8 ‘‘(B) PROGRESS EXPENDITURES.—Credit 

9 allowable by reason of subsection (d) shall not 

10 be taken into account under subparagraph 

11 (A)(ii).’’. 

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

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

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

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

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

17 the Revenue Reconciliation Act of 1990). 

18 SEC. 3. ALLOWANCE FOR THE TRANSFER OF CREDITS FOR 

19 CERTAIN SMALL PROJECTS. 

20 (a) IN GENERAL.—Section 47(e) of the Internal Rev21 enue Code of 1986, as amended by section 2, is amended 

22 by adding at the end the following new subsection: 

23 ‘‘(4) TRANSFER OF SMALLER PROJECT CRED24 IT.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B) and such regulations or other guid3 ance as the Secretary may provide, the taxpayer 

4 may transfer all or a portion of the credit allow5 able to the taxpayer under subsection (a) for a 

6 smaller project. 

7 ‘‘(B) CERTIFICATION.— 

8 ‘‘(i) IN GENERAL.—A transfer under 

9 subparagraph (A) shall be accompanied by 

10 a certificate which includes— 

11 ‘‘(I) the certification for the cer12 tified historic structure referred to in 

13 subsection (c)(3), 

14 ‘‘(II) the taxpayer’s name, ad15 dress, tax identification number, date 

16 of project completion, and the amount 

17 of credit being transferred, 

18 ‘‘(III) the transferee’s name, ad19 dress, tax identification number, and 

20 the amount of credit being trans21 ferred, and 

22 ‘‘(IV) such other information as 

23 may be required by the Secretary. 

24 ‘‘(ii) TRANSFERABILITY OF CERTIFI25 CATE.—A certificate issued under this secVerDate Sep 11 2014 22:03 Feb 24, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1158.IH H1158

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1 tion to a taxpayer shall be transferable to 

2 any other taxpayer, except that a certifi3 cate may not be transferred more than 

4 once. 

5 ‘‘(C) TAX TREATMENT RELATING TO CER6 TIFICATE.— 

7 ‘‘(i) DISALLOWANCE OF DEDUC8 TION.—No deduction shall be allowed for 

9 the amount of consideration paid or in10 curred by the transferee. 

11 ‘‘(ii) ALLOWANCE OF CREDIT.—The 

12 amount of credit transferred under sub13 paragraph (A)— 

14 ‘‘(I) shall not be allowed to the 

15 transferor for any taxable year, and 

16 ‘‘(II) shall be allowable to the 

17 transferee as a credit under this sec18 tion for the taxable year of the trans19 feree in which such credit is trans20 ferred. 

21 ‘‘(D) RECAPTURE AND OTHER SPECIAL

22 RULES.—The taxpayer who claims a credit 

23 under this section by reason of a transfer of an 

24 amount of credit under subparagraph (A) with 

25 respect to a smaller project shall be treated as 


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1 the taxpayer with respect to the smaller project 

2 for purposes of section 50. 

3 ‘‘(E) INFORMATION REPORTING.—The 

4 transferor and the transferee shall each make 

5 such reports regarding the transfer of an 

6 amount of credit under paragraph (A) and con7 taining such information as the Secretary may 

8 require. The reports required by this subsection 

9 shall be filed at such time and in such manner 

10 as may be required by the Secretary. 

11 ‘‘(F) REGULATIONS.—The Secretary shall 

12 prescribe regulations or other guidance to carry 

13 out this paragraph.’’. 

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

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

16 enactment of this Act. 

17 SEC. 4. INCREASING THE TYPE OF BUILDINGS ELIGIBLE 

18 FOR REHABILITATION. 

19 (a) IN GENERAL.—Section 47(c)(1)(C)(i)(I) of the 

20 Internal Revenue Code of 1986 is amended by inserting 

21 ‘‘50 percent of’’ before ‘‘the adjusted basis’’. 

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

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

24 the date of the enactment of this Act. 


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1 SEC. 5. REDUCTION OF BASIS ADJUSTMENT FOR REHABILI2 TATION PROPERTY. 

3 (a) IN GENERAL.—Section 50(c) of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following: 

6 ‘‘(6) SPECIAL RULE RELATING TO THE REHA7 BILITATION CREDIT.—In the case of any rehabilita8 tion credit— 

9 ‘‘(A) only 50 percent of such credit shall 

10 be taken into account under paragraph (1), and 

11 ‘‘(B) only 50 percent of any recapture 

12 amount attributable to such credit shall be 

13 taken into account under paragraph (2).’’. 

14 (b) COORDINATION WITH BASIS ADJUSTMENT.— 

15 Section 50 of such Code is amended by adding at the end 

16 the following: 

17 ‘‘(e) COORDINATION WITH BASIS ADJUSTMENT.—In 

18 applying the provisions of former section 48(d)(5)(B) pur19 suant to subsection (d)(5) to a lease of property eligible 

20 for the rehabilitation tax credit, the lessee of such property 

21 shall include ratably in gross income over the shortest re22 covery period that could be applicable under section 168 

23 with respect to such property an amount equal to 50 per24 cent of the amount of the credit allowable under section 

25 38 to the lessee with respect to such property.’’. 


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1 SEC. 6. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 

2 USE PROPERTY. 

3 (a) IN GENERAL.—Section 47(c)(2)(B)(v)(I) of the 

4 Internal Revenue Code of 1986 (relating to tax-exempt 

5 use property) is amended by inserting ‘‘and subclauses (I), 

6 (II), and (III) of section 168(h)(1)(B)(ii) shall not apply’’ 

7 after ‘‘thereof’’. 

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

9 this section shall apply to property placed in service after 

10 the date of the enactment of this Act. 

Æ 


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