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H.R. 2294: Historic Tax Credit Growth and Opportunity Act of 2021


The text of the bill below is as of Apr 1, 2021 (Introduced).


I

117th CONGRESS

1st Session

H. R. 2294

IN THE HOUSE OF REPRESENTATIVES

April 1, 2021

(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.

1.

Short title

This Act may be cited as the Historic Tax Credit Growth and Opportunity Act of 2021.

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:

In the case of a taxable
year beginning in:
The applicable
percentage is—
2020 through 202430
202526
202623
2027 and thereafter20

.

(b)

Effective date

The amendments made by this section shall apply to property placed in service after March 31, 2021.

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.

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.

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.

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.