Historic Tax Credit Growth and Opportunity Act of 2023

Subjects: Taxation, Building construction, Historic sites and heritage areas, Income tax credits, Residential rehabilitation and home repair, Tax-exempt organizations

Summary:  <p><strong>Historic Tax Credit Growth and Opportunity Act of&nbsp; 2023</strong></p> <p>This bill increases the rehabilitation tax credit and modifies certain requirements for&nbsp;the credit. </p> <p>The bill increases the rate of the credit to 30% &nbsp;for small projects (rehabilitation expenditures not exceeding $3.75 million) and caps the credit for such projects&nbsp;at $750,000 for all taxable years. </p> <p>The bill also expands the types of buildings eligible for rehabilitation by decreasing the rehabilitation threshold from 100% to 50% of project expenses. It also eliminates the basis adjustment requirement for the credit and modifies rules relating to the eligibility of&nbsp;tax-exempt use property for the credit.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 639 Introduced in Senate (IS)]

&lt;DOC&gt;






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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Historic Tax Credit Growth and 
Opportunity Act of 2023''.

SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR CERTAIN SMALL 
              PROJECTS.

    (a) In General.--Section 47 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(e) Special Rule Regarding Certain Small Projects.--
            ``(1) In general.--In the case of any qualified 
        rehabilitated building or portion thereof--
                    ``(A) which is placed in service after the date of 
                the enactment of this subsection, and
                    ``(B) which is a small project,
        subsection (a)(2) shall be applied by substituting `30 percent' 
        for `20 percent'.
            ``(2) Maximum credit.--The credit under this section (after 
        application of this subsection) with respect to any project for 
        all taxable years shall not exceed $750,000.
            ``(3) Small project.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `small project' means any certified historic 
                structure or portion thereof if--
                            ``(i) the total qualified rehabilitation 
                        expenditures taken into account for purposes of 
                        this section with respect to the rehabilitation 
                        do not exceed $3,750,000, and
                            ``(ii) no credit was allowed under this 
                        section for either of the two immediately 
                        preceding taxable years with respect to such 
                        building.
                    ``(B) Progress expenditures.--Credit allowable by 
                reason of subsection (d) shall not be taken into 
                account under subparagraph (A)(ii).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to periods after the date of the enactment of this Act, under rules 
similar to the rules of section 48(m) of the Internal Revenue Code of 
1986 (as in effect on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990).

SEC. 3. INCREASING THE TYPE OF BUILDINGS ELIGIBLE FOR REHABILITATION.

    (a) In General.--Section 47(c)(1)(B)(i)(I) of the Internal Revenue 
Code of 1986 is amended by inserting ``50 percent of'' before ``the 
adjusted basis''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2022.

SEC. 4. ELIMINATION OF REHABILITATION CREDIT BASIS ADJUSTMENT.

    (a) In General.--Section 50(c) of the Internal Revenue Code of 1986 
is amended by adding at the end the following new paragraph:
            ``(6) Exception for rehabilitation credit.--In the case of 
        the rehabilitation credit, paragraph (1) shall not apply.''.
    (b) Treatment in Case of Credit Allowed to Lessee.--Section 50(d) 
of such Code is amended by adding at the end the following: ``In the 
case of the rehabilitation credit, paragraph (5)(B) of the section 
48(d) referred to in paragraph (5) of this subsection shall not 
apply.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 5. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT USE PROPERTY.

    (a) In General.--Section 47(c)(2)(B)(v) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subclause:
                                    ``(III) Disqualified lease rules to 
                                apply only in case of government 
                                entity.--For purposes of subclause (I), 
                                except in the case of a tax-exempt 
                                entity described in section 
                                168(h)(2)(A)(i), the determination of 
                                whether property is tax-exempt use 
                                property shall be made under section 
                                168(h) without regard to whether the 
                                property is leased in a disqualified 
                                lease (as defined in section 
                                168(h)(1)(B)(ii)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.
                                 &lt;all&gt;
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