119 S1459 IS: Historic Tax Credit Growth and Opportunity Act of 2025 U.S. Senate 2025-04-10 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
II119th CONGRESS1st SessionS. 1459IN THE SENATE OF THE UNITED STATESApril 10, 2025Mr. Cassidy (for himself, Mr. Warner, Ms. Collins, and Ms. Cantwell) introduced the following bill; which was read twice and referred to the Committee on FinanceA BILLTo amend the Internal Revenue Code of 1986 to improve the historic rehabilitation tax credit, and for other purposes.
1.
Short title
This Act may be cited as the Historic Tax Credit Growth and Opportunity Act of 2025.
2.
Full credit allowed in the year building placed in service
(a)
In general
Section 47(a) of the Internal Revenue Code of 1986 is amended to read as follows:(a)
General rule
For purposes of section 46, the rehabilitation credit for any taxable year is 20 percent of the qualified rehabilitation expenditures..(b)
Effective date
The amendment made by this section shall apply to property placed in service after December 31, 2023.
3.
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 qualifying small project with respect to which there is an election in effect under this subsection—(A)the total qualified rehabilitation expenditures taken into account for purposes of this section with respect to the rehabilitation shall not exceed $3,750,000,(B)subsection (a) shall be applied by substituting 30 percent for 20 percent, and(C)subject to paragraph (4) and such regulations or other guidance as the Secretary may provide, the taxpayer may transfer all or a portion of the credit determined under this section with respect to such qualifying small project.(2)
Qualifying small project
For purposes of this subsection, the term qualifying small project means any qualified rehabilitated building or portion thereof if— (A)such building is placed in service after the date of the enactment of this subsection, and(B)no credit was allowed under this section (other than a credits allowed by reason of subsection (d)) for either of the two immediately preceding taxable years with respect to such building.(3)
Special rule for rural projects
(A)
In general
In the case of any qualifying small project in a rural area, paragraph (1)(A) shall be applied by substituting $5,000,000 for $3,750,000.(B)
Rural area
For purposes of this subparagraph, the term rural area means any area other than—(i)a city or town that has a population of greater than 50,000 inhabitants, or(ii)the urbanized area contiguous and adjacent to a city or town described in clause (i), as defined by the Bureau of the Census based on the latest decennial census of the United States. (4)
Transfer of credit for qualifying small projects
(A)
Certification
(i)
In general
A transfer under paragraph (1)(C)) 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 subsection to a taxpayer shall be transferable to any other taxpayer.(B)
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 paragraph (1)(C)—(I)shall not be allowed to the transferor for any taxable year, and(II)shall be allowable to the transferee as a credit determined 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.(C)
Recapture and other special rules
The taxpayer who claims a credit determined under this section by reason of a transfer of an amount of credit under paragraph (1)(A) with respect to an applicable rural project shall be treated as the taxpayer with respect to such project for purposes of section 50.(D)
Information reporting
The transferor and the transferee shall each make such reports regarding the transfer of an amount of credit under paragraph (1)(C) and containing such information as the Secretary may require. The reports required by this subparagraph shall be filed at such time and in such manner as may be required by the Secretary.(E)
Regulations
The Secretary shall prescribe regulations or other guidance to carry out paragraph (1)(C) and this paragraph in a manner which is consistent with applicable requirements with respect to transfer of credits under section 6418.(5)
Election
An election under this subsection shall be made at such time and in such manner as the Secretary may by regulations prescribe..(b)
Effective date
The amendment made by this section shall apply to property placed in service 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 property placed in service 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)
Effective date
The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.