Historic Tax Credit Growth and Opportunity Act of 2019

H.R. 2825 · 116th Congress · May 17, 2019 · Lineage

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.

1. Short title

This Act may be cited as the “Historic Tax Credit Growth and Opportunity Act of 2019”.

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,

“(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).

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.

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.

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.

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)