Historic Tax Credit Growth and Opportunity Act of 2023
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 small 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 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 118th Congress]
[From the U.S. Government Publishing Office]
[S. 639 Introduced in Senate (IS)]
<DOC>
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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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