taken into account if this subsection had 
been in effect for all prior periods) with re-
spect to the rehabilitation are not over 
$3,750,000, and 
‘‘(ii) no credit was allowed under this 
section for either of the 2 prior 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. ALLOWANCE FOR THE TRANSFER OF CREDITS FOR 
CERTAIN SMALL PROJECTS. 
(a) IN GENERAL.—Section 47(e) of the Internal Rev-
enue Code of 1986, as amended by section 2, is amended 
by adding at the end the following new subsection: 
‘‘(4) TRANSFER OF SMALLER PROJECT CRED-
IT.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) and such regulations or other guid-
ance as the Secretary may provide, the taxpayer 
may transfer all or a portion of the credit allow-
able to the taxpayer under subsection (a) for a 
smaller project. 
‘‘(B) CERTIFICATION.— 
‘‘(i) IN GENERAL.—A transfer under 
subparagraph (A) shall be accompanied by 
a certificate which includes— 
‘‘(I) the certification for the cer-
tified historic structure referred to in 
subsection (c)(3), 
‘‘(II) the taxpayer’s name, ad-
dress, tax identification number, date 
of project completion, and the amount 
of credit being transferred, 
‘‘(III) the transferee’s name, ad-
dress, tax identification number, and 
the amount of credit being trans-
ferred, and 
‘‘(IV) such other information as 
may be required by the Secretary. 
‘‘(ii) TRANSFERABILITY OF CERTIFI-
CATE.—A certificate issued under this sec-
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tion to a taxpayer shall be transferable to 
any other taxpayer. 
‘‘(C) TAX TREATMENT RELATING TO CER-
TIFICATE.— 
‘‘(i) 
DISALLOWANCE
OF
DEDUC-
TION.—No deduction shall be allowed for 
the amount of consideration paid or in-
curred by the transferee. 
‘‘(ii) ALLOWANCE
OF
CREDIT.—The 
amount of credit transferred under sub-
paragraph (A)— 
‘‘(I) shall not be allowed to the 
transferor for any taxable year, and 
‘‘(II) shall be allowable to the 
transferee as a credit under this sec-
tion for the taxable year of the trans-
feree in which such credit is trans-
ferred. 
‘‘(iii) 
EXCLUSION.—Gross 
income 
shall not include any amount received in 
connection with the transfer of the certifi-
cate. 
‘‘(D) RECAPTURE
AND
OTHER
SPECIAL 
RULES.—The taxpayer who claims a credit 
under this section by reason of a transfer of an 
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amount of credit under subparagraph (A) with 
respect to a smaller project shall be treated as 
the taxpayer with respect to the smaller project 
for purposes of section 50. 
‘‘(E) 
INFORMATION
REPORTING.—The 
transferor and the transferee shall each make 
such reports regarding the transfer of an 
amount of credit under paragraph (A) and con-
taining such information as the Secretary may 
require. The reports required by this subsection 
shall be filed at such time and in such manner 
as may be required by the Secretary. 
‘‘(F) REGULATIONS.—The Secretary shall 
prescribe regulations or other guidance to carry 
out this paragraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after the date of the 
enactment of this Act. 
SEC. 4. 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’’. 
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kjohnson on DSK79L0C42 with BILLS
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 5. ELIMINATION OF REHABILITATION CREDIT BASIS 
ADJUSTMENT. 
(a) IN GENERAL.—Section 50(c) of the Internal Rev-
enue Code of 1986 is amended by adding 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) of such Code is amended by add-
ing at the end the following: ‘‘In the case of the rehabilita-
tion 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. 6. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 
USE PROPERTY. 
(a) IN GENERAL.—Section 47(c)(2)(B)(v) of the In-
ternal Revenue Code of 1986 is amended by adding at the 
end the following new subclause: 
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‘‘(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 sec-
tion 168(h)(2)(A)(i), the determina-
tion of whether property is tax-exempt 
use property shall be made under sec-
tion 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. 
Æ 
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