Historic Tax Credit Growth and Opportunity Act of 2021
This bill increases the rehabilitation tax credit and modifies certain requirements for the credit.
The bill increases the rate of the credit for qualified rehabilitation expenditures in taxable years beginning after December 31, 2019, and before January 1, 2027, after which the rate reverts to 20%.
The bill increases the rate of the credit to 30% for certain small projects whose qualified rehabilitation expenditures do not exceed $2.5 million.
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 tax-exempt use property eligible for the credit.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2294 Introduced in House (IH)]
<DOC>
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
rehabilitation 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 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 2021''.
SEC. 2. INCREASE IN REHABILITATION CREDIT.
(a) In General.--Section 47(a) of the Internal Revenue 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 expenditures paid or incurred
in any taxable year beginning 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 expenditures,
and
``(ii) the ratable share of such
expenditures 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:
------------------------------------------------------------------------
The applicable
``In the case of a taxable year beginning in: percentage is--
------------------------------------------------------------------------
2020 through 2024...................................... 30
2025................................................... 26
2026................................................... 23
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 expenditures
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 rehabilitation of any qualified
rehabilitated building if--
``(A) the qualified rehabilitation expenditures
taken into account under this section (or which would
be so taken into account but for paragraph (1)(B)) with
respect to such rehabilitation do not exceed
$3,750,000,
``(B) no credit was allowed under this section with
respect to such building to any taxpayer for either of
the 2 taxable years immediately 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 rehabilitation.''.
(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 adjusted 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 60-month periods (referred to in clause (ii) of such section)
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 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)
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) 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) (determined without
regard to the last sentence of section
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.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E324)
Referred to the House Committee on Ways and Means.
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