Historic Tax Credit Growth and Opportunity Act of 2019

I 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 rehabilita- tion 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Historic Tax Credit 4 Growth and Opportunity Act of 2019’’. 5 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 2 •HR 2825 IH SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR 1 CERTAIN SMALL PROJECTS. 2 (a) IN GENERAL.—Section 47 of the Internal Rev- 3 enue Code of 1986 is amended by adding at the end the 4 following new subsection: 5 ‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALLER 6 PROJECTS.— 7 ‘‘(1) IN GENERAL.—In the case of any qualified 8 rehabilitated building or portion thereof— 9 ‘‘(A) which is placed in service after the 10 date of the enactment of this subsection, and 11 ‘‘(B) which is a smaller project, 12 subsection (a)(2) shall be applied by substituting ‘30 13 percent’ for ‘20 percent’. 14 ‘‘(2) MAXIMUM CREDIT.—The credit deter- 15 mined under this subsection with respect to any 16 smaller project for all taxable years shall not exceed 17 $750,000. 18 ‘‘(3) SMALLER PROJECT DEFINED.— 19 ‘‘(A) IN GENERAL.—For purposes of this 20 subsection, the term ‘smaller project’ means 21 any qualified rehabilitated building or portion 22 thereof if— 23 ‘‘(i) the qualified rehabilitation ex- 24 penditures taken into account for purposes 25 of this section (or would have been so 26 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 3 •HR 2825 IH taken into account if this subsection had 1 been in effect for all prior periods) with re- 2 spect to the rehabilitation are not over 3 $3,750,000, and 4 ‘‘(ii) no credit was allowed under this 5 section for either of the 2 prior taxable 6 years with respect to such building. 7 ‘‘(B) PROGRESS EXPENDITURES.—Credit 8 allowable by reason of subsection (d) shall not 9 be taken into account under subparagraph 10 (A)(ii).’’. 11 (b) EFFECTIVE DATE.—The amendment made by 12 this section shall apply to periods after the date of the 13 enactment of this Act, under rules similar to the rules of 14 section 48(m) of the Internal Revenue Code of 1986 (as 15 in effect on the day before the date of the enactment of 16 the Revenue Reconciliation Act of 1990). 17 SEC. 3. ALLOWANCE FOR THE TRANSFER OF CREDITS FOR 18 CERTAIN SMALL PROJECTS. 19 (a) IN GENERAL.—Section 47(e) of the Internal Rev- 20 enue Code of 1986, as amended by section 2, is amended 21 by adding at the end the following new subsection: 22 ‘‘(4) TRANSFER OF SMALLER PROJECT CRED- 23 IT.— 24 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 4 •HR 2825 IH ‘‘(A) IN GENERAL.—Subject to subpara- 1 graph (B) and such regulations or other guid- 2 ance as the Secretary may provide, the taxpayer 3 may transfer all or a portion of the credit allow- 4 able to the taxpayer under subsection (a) for a 5 smaller project. 6 ‘‘(B) CERTIFICATION.— 7 ‘‘(i) IN GENERAL.—A transfer under 8 subparagraph (A) shall be accompanied by 9 a certificate which includes— 10 ‘‘(I) the certification for the cer- 11 tified historic structure referred to in 12 subsection (c)(3), 13 ‘‘(II) the taxpayer’s name, ad- 14 dress, tax identification number, date 15 of project completion, and the amount 16 of credit being transferred, 17 ‘‘(III) the transferee’s name, ad- 18 dress, tax identification number, and 19 the amount of credit being trans- 20 ferred, and 21 ‘‘(IV) such other information as 22 may be required by the Secretary. 23 ‘‘(ii) TRANSFERABILITY OF CERTIFI- 24 CATE.—A certificate issued under this sec- 25 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 5 •HR 2825 IH tion to a taxpayer shall be transferable to 1 any other taxpayer. 2 ‘‘(C) TAX TREATMENT RELATING TO CER- 3 TIFICATE.— 4 ‘‘(i) DISALLOWANCE OF DEDUC- 5 TION.—No deduction shall be allowed for 6 the amount of consideration paid or in- 7 curred by the transferee. 8 ‘‘(ii) ALLOWANCE OF CREDIT.—The 9 amount of credit transferred under sub- 10 paragraph (A)— 11 ‘‘(I) shall not be allowed to the 12 transferor for any taxable year, and 13 ‘‘(II) shall be allowable to the 14 transferee as a credit under this sec- 15 tion for the taxable year of the trans- 16 feree in which such credit is trans- 17 ferred. 18 ‘‘(iii) EXCLUSION.—Gross income 19 shall not include any amount received in 20 connection with the transfer of the certifi- 21 cate. 22 ‘‘(D) RECAPTURE AND OTHER SPECIAL 23 RULES.—The taxpayer who claims a credit 24 under this section by reason of a transfer of an 25 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 6 •HR 2825 IH amount of credit under subparagraph (A) with 1 respect to a smaller project shall be treated as 2 the taxpayer with respect to the smaller project 3 for purposes of section 50. 4 ‘‘(E) INFORMATION REPORTING.—The 5 transferor and the transferee shall each make 6 such reports regarding the transfer of an 7 amount of credit under paragraph (A) and con- 8 taining such information as the Secretary may 9 require. The reports required by this subsection 10 shall be filed at such time and in such manner 11 as may be required by the Secretary. 12 ‘‘(F) REGULATIONS.—The Secretary shall 13 prescribe regulations or other guidance to carry 14 out this paragraph.’’. 15 (b) EFFECTIVE DATE.—The amendments made by 16 this section shall apply to periods after the date of the 17 enactment of this Act. 18 SEC. 4. INCREASING THE TYPE OF BUILDINGS ELIGIBLE 19 FOR REHABILITATION. 20 (a) IN GENERAL.—Section 47(c)(1)(B)(i)(I) of the 21 Internal Revenue Code of 1986 is amended by inserting 22 ‘‘50 percent of’’ before ‘‘the adjusted basis’’. 23 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 7 •HR 2825 IH (b) EFFECTIVE DATE.—The amendment made by 1 subsection (a) shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 SEC. 5. ELIMINATION OF REHABILITATION CREDIT BASIS 4 ADJUSTMENT. 5 (a) IN GENERAL.—Section 50(c) of the Internal Rev- 6 enue Code of 1986 is amended by adding at the end the 7 following new paragraph: 8 ‘‘(6) EXCEPTION FOR REHABILITATION CRED- 9 IT.—In the case of the rehabilitation credit, para- 10 graph (1) shall not apply.’’. 11 (b) TREATMENT IN CASE OF CREDIT ALLOWED TO 12 LESSEE.—Section 50(d) of such Code is amended by add- 13 ing at the end the following: ‘‘In the case of the rehabilita- 14 tion credit, paragraph (5)(B) of the section 48(d) referred 15 to in paragraph (5) of this subsection shall not apply.’’. 16 (c) EFFECTIVE DATE.—The amendments made by 17 this section shall apply to property placed in service after 18 the date of the enactment of this Act. 19 SEC. 6. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 20 USE PROPERTY. 21 (a) IN GENERAL.—Section 47(c)(2)(B)(v) of the In- 22 ternal Revenue Code of 1986 is amended by adding at the 23 end the following new subclause: 24 VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS 8 •HR 2825 IH ‘‘(III) DISQUALIFIED LEASE 1 RULES TO APPLY ONLY IN CASE OF 2 GOVERNMENT ENTITY.—For purposes 3 of subclause (I), except in the case of 4 a tax-exempt entity described in sec- 5 tion 168(h)(2)(A)(i), the determina- 6 tion of whether property is tax-exempt 7 use property shall be made under sec- 8 tion 168(h) without regard to whether 9 the property is leased in a disqualified 10 lease (as defined in section 11 168(h)(1)(B)(ii)).’’. 12 (b) EFFECTIVE DATE.—The amendments made by 13 this section shall apply to property placed in service after 14 the date of the enactment of this Act. 15 Æ VerDate Sep 11 2014 01:20 May 30, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2825.IH H2825 kjohnson on DSK79L0C42 with BILLS