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 rehabilita-
tion 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. 
Be it enacted by the Senate and House of Representa-
tives 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 2021’’. 
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SEC. 2. INCREASE IN REHABILITATION CREDIT. 
(a) IN GENERAL.—Section 47(a) of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new paragraph: 
‘‘(3) INCREASED PERCENTAGE FOR QUALIFIED 
REHABILITATION EXPENDITURES BEFORE 2027.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified rehabilitated building with respect to 
which there are qualified rehabilitation expendi-
tures paid or incurred in any taxable year be-
ginning after December 31, 2019, and before 
January 1, 2027— 
‘‘(i) paragraph (2) shall be applied by 
substituting ‘the applicable percentage’ for 
‘20 percent’ with respect to such expendi-
tures, and 
‘‘(ii) the ratable share of such expend-
itures shall be determined separately under 
paragraph (2) by applying the applicable 
percentage for each such taxable year to 
the expenditures for each such taxable 
year. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph, the term ‘applicable 
percentage’ means the percentage determined in 
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 ...................................................................
2025 ..........................................................................................
2026 ..........................................................................................
2027 and thereafter ..................................................................
20’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
March 31, 2021. 
SEC. 3. INCREASE IN THE REHABILITATION CREDIT FOR 
CERTAIN SMALL PROJECTS. 
(a) IN GENERAL.—Section 47 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 small 
project— 
‘‘(A) the percentage under subsection 
(a)(2) shall be 30 percent, and 
‘‘(B) the qualified rehabilitation expendi-
tures taken into account under this section with 
respect to such project shall not exceed 
$2,500,000. 
‘‘(2) SMALL PROJECT.—For purposes of this 
subsection, the term ‘small project’ means the reha-
bilitation of any qualified rehabilitated building if— 
‘‘(A) the qualified rehabilitation expendi-
tures taken into account under this section (or 
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which would be so taken into account but for 
paragraph (1)(B)) with respect to such rehabili-
tation do not exceed $3,750,000, 
‘‘(B) no credit was allowed under this sec-
tion with respect to such building to any tax-
payer for either of the 2 taxable years imme-
diately preceding the first taxable year in which 
expenditures described in subparagraph (A) 
were paid or incurred, and 
‘‘(C) the taxpayer elects (at such time and 
manner as the Secretary may provide) to have 
this subsection apply with respect to such reha-
bilitation.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 4. MODIFICATION OF DEFINITION OF SUBSTANTIALLY 
REHABILITATED. 
(a) IN
GENERAL.—Section 47(c)(1)(B)(i)(I) is 
amended by inserting ‘‘50 percent of’’ before ‘‘the ad-
justed basis’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to determinations with respect 
to 24-month periods (referred to in clause (i) of section 
47(c)(1)(B) of the Internal Revenue Code of 1986) and 
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60-month periods (referred to in clause (ii) of such sec-
tion) which begin after the date of the enactment of this 
Act. 
SEC. 5. ELIMINATION OF REHABILITATION CREDIT BASIS 
ADJUSTMENT. 
(a) IN GENERAL.—Section 50(c) is amended by add-
ing at the end the following new paragraph: 
‘‘(6) EXCEPTION FOR REHABILITATION CRED-
IT.—In the case of the rehabilitation credit, para-
graph (1) shall not apply.’’. 
(b) TREATMENT IN CASE OF CREDIT ALLOWED TO 
LESSEE.—Section 50(d) 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 para-
graph (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. 6. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 
USE PROPERTY. 
(a) IN GENERAL.—Section 47(c)(2)(B)(v) is amend-
ed by adding at the end the following new subclause: 
‘‘(III) 
DISQUALIFIED
LEASE 
RULES TO APPLY ONLY IN CASE OF 
GOVERNMENT ENTITY.—For purposes 
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of subclause (I), except in the case of 
a tax-exempt entity described in sec-
tion 168(h)(2)(A)(i) (determined with-
out regard to the last sentence of sec-
tion 168(h)(2)(A)), 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 leases entered into after the date 
of the enactment of this Act. 
Æ 
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