Title: Historic Tax Credit Growth and Opportunity Act of 2019
Policy area: Taxation

Summary:
Historic Tax Credit Growth and Opportunity Act of 2019
This bill increases the rehabilitation tax credit and modifies certain requirements for the credit.
The bill increases the rate of the credit to 30% for smaller projects (rehabilitation expenditures not exceeding $3.75 million) and caps the credit for such projects at $750,000 for all taxable years. The bill also allows taxpayers to transfer all or a portion of the credits that are allowable for smaller projects.
The bill 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 tax-exempt use property for the credit.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2825 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 2825

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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 17, 2019

 Mr. Blumenauer (for himself, Mr. Kelly of Pennsylvania, Ms. Sewell of 
     Alabama, Mr. LaHood, Mr. Higgins of New York, and Mr. Turner) 
 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 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 2019''.

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 Smaller 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 smaller project,
        subsection (a)(2) shall be applied by substituting `30 percent' 
        for `20 percent'.
            ``(2) Maximum credit.--The credit determined under this 
        subsection with respect to any smaller project for all taxable 
        years shall not exceed $750,000.
            ``(3) Smaller project defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `smaller project' means any qualified 
                rehabilitated building or portion thereof if--
                            ``(i) the qualified rehabilitation 
                        expenditures taken into account for purposes of 
                        this section (or would have been so taken into 
                        account if this subsection had been in effect 
                        for all prior periods) with respect 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 Revenue Code of 
1986, as amended by section 2, is amended by adding at the end the 
following new subsection:
            ``(4) Transfer of smaller project credit.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                such regulations or other guidance as the Secretary may 
                provide, the taxpayer may transfer all or a portion of 
                the credit allowable 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 
                                certified historic structure referred 
                                to in subsection (c)(3),
                                    ``(II) the taxpayer's name, 
                                address, tax identification number, 
                                date of project completion, and the 
                                amount of credit being transferred,
                                    ``(III) the transferee's name, 
                                address, tax identification number, and 
                                the amount of credit being transferred, 
                                and
                                    ``(IV) such other information as 
                                may be required by the Secretary.
                            ``(ii) Transferability of certificate.--A 
                        certificate issued under this section to a 
                        taxpayer shall be transferable to any other 
                        taxpayer.
                    ``(C) Tax treatment relating to certificate.--
                            ``(i) Disallowance of deduction.--No 
                        deduction shall be allowed for the amount of 
                        consideration paid or incurred by the 
                        transferee.
                            ``(ii) Allowance of credit.--The amount of 
                        credit transferred under subparagraph (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 
                                section for the taxable year of the 
                                transferee in which such credit is 
                                transferred.
                            ``(iii) Exclusion.--Gross income shall not 
                        include any amount received in connection with 
                        the transfer of the certificate.
                    ``(D) Recapture and other special rules.--The 
                taxpayer who claims a credit under this section by 
                reason of a transfer of an 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 containing 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''.
    (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 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. 6. 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.
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