Us Congress 2025-2026 Regular Session

Us Congress House Bill HB1454 Compare Versions

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Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 1454
5	5	To amend the Internal Revenue Code of 1986 to enhance the rehabilitation
6	6	credit for buildings in rural areas.
7	7	IN THE HOUSE OF REPRESENTATIVES
8	8	FEBRUARY21, 2025
9	9	Mr. C
10	10	AREY(for himself and Mr. HORSFORD) introduced the following bill;
11	11	which was referred to the Committee on Ways and Means
12	12	A BILL
13	13	To amend the Internal Revenue Code of 1986 to enhance
14	14	the rehabilitation credit for buildings in rural areas.
15	15	Be it enacted by the Senate and House of Representa-1
16	16	tives of the United States of America in Congress assembled, 2
17	17	SECTION 1. SHORT TITLE. 3
18	18	This Act may be cited as the ‘‘Rural Historic Tax 4
19	19	Credit Improvement Act’’. 5
20	20	SEC. 2. ENHANCEMENT OF REHABILITATION CREDIT FOR 6
21	21	BUILDINGS IN RURAL AREAS. 7
22	22	(a) I
23	23	NGENERAL.—Section 47(a) of the Internal Rev-8
24	24	enue Code of 1986 is amended— 9
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27	27	•HR 1454 IH
28	28	(1) in paragraph (1), by striking ‘‘For pur-1
29	29	poses’’ and inserting ‘‘Except as provided in para-2
30	30	graph (3), for purposes’’, and 3
31	31	(2) by adding at the end the following new 4
32	32	paragraphs: 5
33	33	‘‘(3) A
34	34	PPLICABLE RURAL PROJECTS .— 6
35	35	‘‘(A) I
36	36	N GENERAL.—In the case of any ap-7
37	37	plicable rural project— 8
38	38	‘‘(i) paragraph (1) shall not apply for 9
39	39	any qualified rehabilitation expenditures 10
40	40	with respect to such project, and 11
41	41	‘‘(ii) for the taxable year in which 12
42	42	such project is placed in service, the reha-13
43	43	bilitation credit for such taxable year is an 14
44	44	amount equal to— 15
45	45	‘‘(I) in the case of a project 16
46	46	which is an affordable housing 17
47	47	project, 40 percent of the qualified re-18
48	48	habilitation expenditures with respect 19
49	49	to such project, or 20
50	50	‘‘(II) in the case of a project 21
51	51	which is not an affordable housing 22
52	52	project, 30 percent of the qualified re-23
53	53	habilitation expenditures with respect 24
54	54	to such project. 25
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57	57	•HR 1454 IH
58	58	‘‘(B) APPLICABLE RURAL PROJECT .— 1
59	59	‘‘(i) I
60	60	N GENERAL.—For purposes of 2
61	61	this section, the term ‘applicable rural 3
62	62	project’ means a qualified rehabilitated 4
63	63	building which is located in a rural area. 5
64	64	‘‘(ii) L
65	65	IMITATION.—In the case of any 6
66	66	applicable rural project, the total amount 7
67	67	of qualified rehabilitation expenditures 8
68	68	which may be taken into account under 9
69	69	this section with respect to such project 10
70	70	may not exceed $5,000,000. 11
71	71	‘‘(iii) R
72	72	URAL AREA.—For purposes of 12
73	73	this paragraph, the term ‘rural area’ 13
74	74	means any area other than— 14
75	75	‘‘(I) a city or town that has a 15
76	76	population of greater than 50,000 in-16
77	77	habitants, or 17
78	78	‘‘(II) the urbanized area contig-18
79	79	uous and adjacent to a city or town 19
80	80	described in subclause (I), as defined 20
81	81	by the Bureau of the Census based on 21
82	82	the latest decennial census of the 22
83	83	United States. 23
84	84	‘‘(C) A
85	85	FFORDABLE HOUSING PROJECT .— 24
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88	88	•HR 1454 IH
89	89	‘‘(i) IN GENERAL.—For purposes of 1
90	90	this paragraph, the term ‘affordable hous-2
91	91	ing project’ means a project— 3
92	92	‘‘(I) in which— 4
93	93	‘‘(aa) not less than 50 per-5
94	94	cent of the aggregate square feet 6
95	95	of the completed project is hous-7
96	96	ing, and 8
97	97	‘‘(bb) with respect to the 9
98	98	housing described in item (aa), 10
99	99	not less than 50 percent of the 11
100	100	aggregate square feet of such 12
101	101	housing— 13
102	102	‘‘(AA) is new affordable 14
103	103	housing, or 15
104	104	‘‘(BB) continues to pro-16
105	105	vide affordable housing, or 17
106	106	‘‘(II) in which not less than 33 18
107	107	percent of the aggregate square feet 19
108	108	of the completed project— 20
109	109	‘‘(aa) is new affordable 21
110	110	housing, or 22
111	111	‘‘(bb) continues to provide 23
112	112	affordable housing. 24
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115	115	•HR 1454 IH
116	116	‘‘(ii) AFFORDABLE HOUSING .—For 1
117	117	purposes of this paragraph, the term ‘af-2
118	118	fordable housing’ means a decent, safe, 3
119	119	and sanitary dwelling, apartment, or other 4
120	120	living accommodation for a household 5
121	121	whose income does not exceed 80 percent 6
122	122	of the median income for the market area 7
123	123	(as defined by the Secretary of Housing 8
124	124	and Urban Development under section 8 of 9
125	125	the United States Housing Act of 1937 10
126	126	(42 U.S.C. 1437f)). 11
127	127	‘‘(4) T
128	128	RANSFER OF CREDIT FOR APPLICABLE 12
129	129	RURAL PROJECTS.— 13
130	130	‘‘(A) I
131	131	N GENERAL.—Subject to subpara-14
132	132	graph (B) and such regulations or other guid-15
133	133	ance as the Secretary may provide, the taxpayer 16
134	134	may transfer all or a portion of the credit deter-17
135	135	mined under paragraph (3) for an applicable 18
136	136	rural project. 19
137	137	‘‘(B) C
138	138	ERTIFICATION.— 20
139	139	‘‘(i) I
140	140	N GENERAL.—A transfer under 21
141	141	subparagraph (A) shall be accompanied by 22
142	142	a certificate which includes— 23
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145	145	•HR 1454 IH
146	146	‘‘(I) the certification for the cer-1
147	147	tified historic structure referred to in 2
148	148	subsection (c)(3), 3
149	149	‘‘(II) the taxpayer’s name, ad-4
150	150	dress, tax identification number, date 5
151	151	of project completion, and the amount 6
152	152	of credit being transferred, 7
153	153	‘‘(III) the transferee’s name, ad-8
154	154	dress, tax identification number, and 9
155	155	the amount of credit being trans-10
156	156	ferred, and 11
157	157	‘‘(IV) such other information as 12
158	158	may be required by the Secretary. 13
159	159	‘‘(ii) T
160	160	RANSFERABILITY OF CERTIFI -14
161	161	CATE.—A certificate issued under this sec-15
162	162	tion to a taxpayer shall be transferable to 16
163	163	any other taxpayer. 17
164	164	‘‘(C) T
165	165	AX TREATMENT RELATING TO CER -18
166	166	TIFICATE.— 19
167	167	‘‘(i) D
168	168	ISALLOWANCE OF DEDUC -20
169	169	TION.—No deduction shall be allowed for 21
170	170	the amount of consideration paid or in-22
171	171	curred by the transferee. 23
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174	174	•HR 1454 IH
175	175	‘‘(ii) ALLOWANCE OF CREDIT .—The 1
176	176	amount of credit transferred under sub-2
177	177	paragraph (A)— 3
178	178	‘‘(I) shall not be allowed to the 4
179	179	transferor for any taxable year, and 5
180	180	‘‘(II) shall be allowable to the 6
181	181	transferee as a credit determined 7
182	182	under this section for the taxable year 8
183	183	of the transferee in which such credit 9
184	184	is transferred. 10
185	185	‘‘(iii) E
186	186	XCLUSION.—Gross income 11
187	187	shall not include any amount received in 12
188	188	connection with the transfer of the certifi-13
189	189	cate. 14
190	190	‘‘(D) R
191	191	ECAPTURE AND OTHER SPECIAL 15
192	192	RULES.—The taxpayer who claims a credit de-16
193	193	termined under this section by reason of a 17
194	194	transfer of an amount of credit under subpara-18
195	195	graph (A) with respect to an applicable rural 19
196	196	project shall be treated as the taxpayer with re-20
197	197	spect to such project for purposes of section 50. 21
198	198	‘‘(E) I
199	199	NFORMATION REPORTING .—The 22
200	200	transferor and the transferee shall each make 23
201	201	such reports regarding the transfer of an 24
202	202	amount of credit under paragraph (A) and con-25
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205	205	•HR 1454 IH
206	206	taining such information as the Secretary may 1
207	207	require. The reports required by this subsection 2
208	208	shall be filed at such time and in such manner 3
209	209	as may be required by the Secretary. 4
210	210	‘‘(F) R
211	211	EGULATIONS.—The Secretary shall 5
212	212	prescribe regulations or other guidance to carry 6
213	213	out this paragraph in a manner which is con-7
214	214	sistent with applicable requirements with re-8
215	215	spect to transfer of credits under section 9
216	216	6418.’’. 10
217	217	(b) R
218	218	ECAPTURE FOR FAILURETOCOMPLYWITH 11
219	219	A
220	220	FFORDABLEHOUSINGREQUIREMENTS.— 12
221	221	(1) I
222	222	N GENERAL.—Section 50(a) of the Internal 13
223	223	Revenue Code of 1986 is amended— 14
224	224	(A) by redesignating paragraphs (4) 15
225	225	through (6) as paragraphs (5) through (7), re-16
226	226	spectively, and 17
227	227	(B) by inserting after paragraph (3) the 18
228	228	following new paragraph: 19
229	229	‘‘(4) F
230	230	AILURE TO COMPLY WITH AFFORDABLE 20
231	231	HOUSING REQUIREMENTS UNDER REHABILITATION 21
232	232	CREDIT.— 22
233	233	‘‘(A) I
234	234	N GENERAL.—In the case of any ap-23
235	235	plicable rural project which is an affordable 24
236	236	housing project (as such terms are defined in 25
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239	239	•HR 1454 IH
240	240	section 47(a)(3)) which is eligible for the reha-1
241	241	bilitation credit under section 47(a), if such 2
242	242	project violates the requirements under section 3
243	243	47(a)(3)(C) before the close of the recapture 4
244	244	period (as described in paragraph (1)), then the 5
245	245	tax under this chapter for the taxable year in 6
246	246	which such violation occurs shall be increased 7
247	247	by 100 percent of the aggregate decrease in the 8
248	248	credits allowed under section 38 for all prior 9
249	249	taxable years which would have resulted solely 10
250	250	from reducing to zero any credit determined 11
251	251	under section 46 which is attributable to the re-12
252	252	habilitation credit under section 47(a) with re-13
253	253	spect to such project. 14
254	254	‘‘(B) E
255	255	XCEPTION.—Subparagraph (A) 15
256	256	shall not apply if the taxpayer demonstrates to 16
257	257	the satisfaction of the Secretary that the viola-17
258	258	tion of the requirements under section 18
259	259	47(a)(3)(C) has been rectified within 45 days of 19
260	260	a determination and notice by the Secretary. 20
261	261	‘‘(C) R
262	262	EGULATIONS AND GUIDANCE .—The 21
263	263	Secretary shall issue such regulations or other 22
264	264	guidance as the Secretary determines necessary 23
265	265	or appropriate to carry out the purposes of this 24
266	266	paragraph, including regulations or other guid-25
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269	269	•HR 1454 IH
270	270	ance which provide for requirements for record-1
271	271	keeping or information reporting for purposes 2
272	272	of administering the requirements of this para-3
273	273	graph.’’. 4
274	274	(2) C
275	275	ONFORMING AMENDMENTS .— 5
276	276	(A) Section 50(a)(5) of such Code, as re-6
277	277	designated by paragraph (1), is amended— 7
278	278	(i) by striking ‘‘or any applicable 8
279	279	transaction to which paragraph (3)(A) ap-9
280	280	plies’’ and inserting ‘‘any applicable trans-10
281	281	action to which paragraph (3)(A) applies, 11
282	282	or any violation to which paragraph (4)(A) 12
283	283	applies’’, and 13
284	284	(ii) by striking ‘‘cessation or applica-14
285	285	ble transaction’’ and inserting ‘‘cessation, 15
286	286	applicable transaction, or violation’’. 16
287	287	(B) Section 50(a)(7)(C) of such Code, as 17
288	288	redesignated by paragraph (1), is amended by 18
289	289	striking ‘‘or (3)’’ and inserting ‘‘(3), or (4)’’. 19
290	290	(C) Section 1371(d)(1) of such Code is 20
291	291	amended by striking ‘‘section 50(a)(5)’’ and in-21
292	292	serting ‘‘section 50(a)(6)’’. 22
293	293	(c) E
294	294	FFECTIVEDATE.—The amendments made by 23
295	295	this section shall apply to property placed in service after 24
296	296	December 31, 2025. 25
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299	299	•HR 1454 IH
300	300	SEC. 3. ELIMINATION OF REHABILITATION CREDIT BASIS 1
301	301	ADJUSTMENT. 2
302	302	(a) I
303	303	NGENERAL.—Section 50(c) of the Internal Rev-3
304	304	enue Code of 1986 is amended by adding at the end the 4
305	305	following new paragraph: 5
306	306	‘‘(6) E
307	307	XCEPTION FOR REHABILITATION CRED -6
308	308	IT.—In the case of the rehabilitation credit with re-7
309	309	spect to any applicable rural project (as defined in 8
310	310	section 47(a)(3)), paragraph (1) shall not apply.’’. 9
311	311	(b) T
312	312	REATMENT INCASE OFCREDITALLOWED TO 10
313	313	L
314	314	ESSEE.—Section 50(d) of such Code is amended by add-11
315	315	ing at the end the following: ‘‘In the case of the rehabilita-12
316	316	tion credit with respect to any applicable rural project (as 13
317	317	defined in section 47(a)(3)), paragraph (5)(B) of the sec-14
318	318	tion 48(d) referred to in paragraph (5) of this subsection 15
319	319	shall not apply.’’. 16
320	320	(c) E
321	321	FFECTIVEDATE.—The amendments made by 17
322	322	this section shall apply to property placed in service after 18
323	323	December 31, 2025. 19
324	324	Æ
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