,,ii  #aad? ,,congress  #b;d ,session   
,s4 #bfee  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,m>* #i1 #bjaf,mr4     
,c>d9 7= himself & ,ms4 ,coll9s7        
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to improve !      
hi/oric rehabilitation tax cr$it1 & =   
o!r purposes4  #a4 ,%ort title ,?is ,act
 may be cit$ z ! ,hi/oric ,tax ,cr$it   
,improvem5t ,act ( #bjae4  #b4 ,increase
 9 ! rehabilitation cr$it = c]ta9 small 
projects  7a7 ,9 g5]al ,section #dg ( ! 
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new           
subsection3  7e7 ,special rule reg>d+   
c]ta9 small projects  7#a7 ,9 g5]al ,9 !
 case ( any qualifi$ rehabilitat$ build+
 or portion !re(-- 7,a7 :i* is plac$ 9  
s]vice aft] ! date ( ! enactm5t ( ?is   
subsection1 &  7,b7 :i* is a small      
project1  subsection 7a77#b7 %all be    
appli$ by sub/itut+ #cj p]c5t = #bj     
p]c5t4  7#b7 ,maximum cr$it ,! cr$it "u 

?is section 7aft] application ( ?is     
subsection7 ) respect to any project =  
all taxable ye>s %all n exce$ #gej1jjj4 
7#c7 ,small project  7,a7 ,9 g5]al ,=   
purposes ( ?is subsection1 ! t]m small  
project means any c]tifi$ hi/oric       
/ructure or portion !re( if-- 7i7 !     
total qualifi$ rehabilitation           
exp5ditures tak5 into acc\nt = purposes 
( ?is section ) respect to !            
rehabilitation d n exce$ #c1gej1jjj1 &  
7ii7 no cr$it 0 all[$ "u ?is section =  
ei!r ( ! two imm$iately prec$+ taxable  
ye>s ) respect to su* build+4  7,b7     
,progress exp5ditures ,cr$it all[able by
 reason ( subsection 7d7 %all n be tak5 
into acc\nt "u subp>agraph 7,a77ii74  4 
7b7 ,effective date ,! am5dm5t made by  
?is section %all apply to p]iods aft] ! 
date ( ! enactm5t ( ?is ,act1 "u rules  
simil> to ! rules ( section #dh7m7 ( !  
,int]nal ,rev5ue ,code ( #aihf 7z 9     
effect on ! day be=e ! date ( ! enactm5t
 ( ! ,rev5ue ,reconciliation ,act (     
#aiij74  #c4 ,all[ance = ! transf] (    

cr$its = c]ta9 small projects  7a7 ,9   
g5]al ,section #dg7;e7 ( ! ,int]nal     
,rev5ue ,code ( #aihf1 z add$ by section
 #b1 is am5d$ by add+ at ! end ! foll[+ 
new p>agraph3  7#d7 ,transf] ( small    
project cr$it  7,a7 ,9 g5]al ,subject to
 subp>agraph 7,b7 & su* regulations or  
o!r guidance z ! ,secret>y may provide1 
! taxpay] may transf] to any o!r taxpay]
 all or a portion ( ! cr$it all[able to 
! taxpay] "u subsection 7a7 = a small   
project4  7,b7 ,c]tification ,a transf] 
"u subp>agraph 7,a7 %all be accompani$  
by a c]tificate :i* includes-- 7i7 !    
c]tification = ! c]tifi$ hi/oric        
/ructure1  7ii7 ! taxpay]'s "n1 address1
 & tax id5tification numb]1  7iii7 !    
transf]ee's "n1 address1 & tax          
id5tification numb]1  7iv7 ! date (     
project completion & ! am\nt ( cr$it be+
 transf]r$1 &  7v7 su* o!r in=mation z  
may be requir$ by ! ,secret>y4  7,c7    
,cr$it may only be transf]r$ once ,a    
cr$it transf]r$ "u subp>agraph 7,a7 is n
 transf]able by ! transf]ee to any o!r  

taxpay]4  7,d7 ,tax treatm5t ( transf]  
7i7 ,disall[ance ( d$uction ,no d$uction
 %all be all[$ = any am\nt (            
consid]ation paid or incurr$ by !       
transf]ee 9 return = ! transf] ( any    
cr$it "u ?is p>agraph4  7ii7 ,all[ance (
 cr$it ,! am\nt ( cr$it transf]r$ "u    
subp>agraph 7,a7-- 7,i7 %all n be all[$ 
to ! transf]or = any taxable ye>1 &     
7,,ii7 %all be all[able to ! transf]ee z
 a cr$it "u ?is section = ! taxable ye> 
( ! transf]ee 9 :i* su* cr$it is        
transf]r$4  7,e7 ,recapture & o!r       
special rules ,= purposes ( section #ej1
 ! transf]ee ( a cr$it ) respect to a   
small] project "u ?is p>agraph %all be  
treat$ z ! taxpay] ) respect to ! small]
 project4  7,f7 ,in=mation report+ ,!   
transf]or & ! transf]ee %all ea* make   
su* reports reg>d+ ! transf] ( an am\nt 
( cr$it "u p>agraph 7,a71 & conta9+ su* 
in=mation1 z ! ,secret>y may require4 ,!
 reports requir$ by ?is subp>agraph %all
 be fil$ at su* "t & 9 su* mann] z may  
be requir$ by ! ,secret>y4  4  7b7      

,effective date ,! am5dm5ts made by ?is 
section %all apply to p]iods aft]       
,decemb] #ca1 #bjae4  #d4 ,increas+ !   
type ( build+s eligible = rehabilitation
  7a7 ,9 g5]al ,section                 
#dg7;c77#a77;,c77i77,i7 ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 #ej p]c5t ( be=e ! adju/$ basis4  7b7  
,effective date ,! am5dm5t made by      
subsection 7a7 %all apply to taxable    
ye>s beg9n+ aft] ,decemb] #ca1 #bjae4   
#e4 ,r$uction ( basis adju/m5t =        
rehabilitation prop]ty  7a7 ,9 g5]al    
,section #ej7;c7 ( ! ,int]nal ,rev5ue   
,code ( #aihf is am5d$ by add+ at ! end 
! foll[+3  7#f7 ,special rule relat+ to 
! rehabilitation cr$it ,9 ! case ( any  
rehabilitation cr$it--  7,a7 only #ej   
p]c5t ( su* cr$it %all be tak5 into     
acc\nt "u p>agraph 7#a71 &  7,b7 only   
#ej p]c5t ( any recapture am\nt         
attributable to su* cr$it %all be tak5  
into acc\nt "u p>agraph 7#b74  4  7b7   
,coord9ation ) basis adju/m5t           
,subsection 7d7 ( section #ej ( !       

,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new s5t5ce3 ,=
 purposes ( p>agraph 7#e71 9 apply+ !   
provisions ( section #dh7;d77#e77;,b7 7z
 s 9 effect7 to a lease ( prop]ty       
eligible = ! cr$it "u section #dg1 gross
 income ( ! lessee ( su* prop]ty %all   
include1 ratably ov] ! %orte/ recov]y   
p]iod applicable to su* prop]ty "u      
section #afh1 an am\nt equal to #ej     
p]c5t ( ! am\nt ( ! cr$it all[able "u   
section #ch to su* lessee ) respect to  
su* prop]ty44  7c7 ,effective date ,!   
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ! date ( !  
enactm5t ( ?is ,act4  #f4 ,special rules
 = dispositions ( /ate hi/oric tax      
cr$its  7a7 ,9 g5]al ,"p ,,iii (        
sub*apt] ,b ( *apt] #a ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 aft] section #aci;,f ! foll[+ new      
section3  #aci;,g4 ,dispositions ( ,/ate
 hi/oric tax cr$its  7a7 ,exclusion f   
income2 basis r$uction  7#a7 ,9 g5]al ,9
 ! case ( a taxpay] :o receives a ,/ate 

hi/oric tax cr$it & transf]s su* cr$it  
by sale1 allocation1 or o!rwise1 or     
receives a refund ( all or a portion (  
su* cr$it--  7,a7 no portion ( ! net    
proce$s ( su* allocation1 disposition1  
or refund ( su* cr$it %all con/itute    
income to su* taxpay] "u section        
#fa7;a71 &  7,b7 ! taxpay]'s basis =    
purposes ( ?is title 9 ! prop]ty )      
respect to :i* ! ,/ate hi/oric tax cr$it
 is all[$ %all be r$uc$ by ! net proce$s
 ( su* sale1 allocation1 disposition1 or
 refund "u ! rules ( p>agraph 7#b74     
7#b7 ,application ( r$uction 9 basis    
7,a7 ,9 g5]al ,! r$uction 9 basis "u    
p>agraph 7#a77;b7 %all be appli$-- 7i7  
fir/1 aga9/ ! basis 9 ! l&1  7ii7       
second1 aga9/ s mu* ( ! basis ( any     
build+ or int]e/ !re9 z 0 n treat$ z a  
qualifi$ rehabilitation exp5diture by   
reason ( clause 7ii7 or 7iii7 ( section 
#dg7;c77#b77;,b71 &  7iii7 ?ird1 aga9/ !
 rema9+ basis 9 ! prop]ty4  7,b7        
,adju/m5t 9 basis ( int]e/ 9 p>tn]%ip or
 ,s corporation ,! adju/$ basis (--  7i7

 a p>tn]'s int]e/ 9 a p>tn]%ip1 or  7ii7
 /ock 9 an ,s corporation 7z def9$ 9    
section #acfa7;a77#a771 %all be         
appropriately adju/$ to take into acc\nt
 adju/m5ts made "u ?is p>agraph 9 !     
basis ( prop]ty held by ! p>tn]%ip or ,s
 corporation 7if any74  7b7 ,election   
,to include 9 income  7#a7 ,9 g5]al ,9 !
 case ( a taxpay] :o elects to h ?is    
subsection apply 9 lieu ( subsection    
7a7-- 7,a7 ! net proce$s ( ! allocation1
 disposition1 or refund describ$ 9      
subsection 7a77#a7 %all con/itute income
 to ! taxpay] "u section #fa7;a71 &     
7,b7 subsection 7a77#a77;,b7 %all n     
apply4  7#b7 ,mak+ ( election ,an       
election "u ?is subsection %all be made 
at su* "t & 9 su* mann] z ! ,secret>y   
may by regulation prescribe4 ,su*       
election %all apply = ! taxable ye> =   
:i* x is made & = all subsequ5t taxable 
ye>s & may be revok$ only ) ! cons5t ( !
 ,secret>y ( ! ,treasury4  7c7 ,effect  
on qualifi$ rehabilitation exp5ditures &
 rehabilitation cr$its ,= purposes (    

det]m9+ ! rehabilitation cr$it all[able 
to a taxpay] "u section #dg1 ! transf]  
or allocation ( ,/ate hi/oric tax cr$its
 ) respect to any prop]ty by a taxpay]  
%all n affect or r$uce ! am\nt (        
qualifi$ rehabilitation exp5ditures 7z  
def9$ 9 section #dg7;c77#b77 tak5 into  
acc\nt ) su* prop]ty1 nor %all su*      
transf] or disposition1 or any basis    
adju/m5t "u subsection 7a71 be treat$ z 
an e>ly disposition ( inve/m5t cr$it    
prop]ty = purposes ( ! recapture        
provisions ( section #ej4  7d7 ,/ate    
hi/oric tax cr$it ,= purposes ( ?is     
section1 ! t]m ,/ate hi/oric tax cr$it  
means any cr$it aga9/ ,/ate or local tax
 liabilities :i*-- 7#a7 is all[able "u !
 laws ( any ,/ate or political          
subdivision !re( to a taxpay] ) respect 
to exp5ditures made = ! rehabilitation (
 prop]ty id5tifi$ by su* laws1 &  7#b7 c
 be allocat$1 dispos$1 or refund$ "u su*
 laws4  4  7b7 ,cl]ical am5dm5t ,! table
 ( sections = "p ,,iii ( sub*apt] ,b (  
*apt] #a ( ! ,int]nal ,rev5ue ,code (   

#aihf is am5d$ by ins]t+ aft] ! item    
relat+ to section #aci;,f ! foll[+ new  
item3  ,sec4 #aci;,g4 ,dispositions (   
,/ate hi/oric tax cr$its4  4  7c7       
,effective date ,?is section %all apply 
to transf]s or dispositions made1 or    
refunds receiv$1 aft] ! date ( !        
enactm5t ( ?is ,act4  #g4 ,modifications
 reg>d+ c]ta9 tax-exempt use prop]ty    
7a7 ,9 g5]al ,section                   
#dg7;c77#b77;,b77v77,i7 ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 1 & subclauses 7,i71 7,,ii71 & 7,,iii7 
( section #afh7;h77#a77;,b77ii7 %all n  
apply aft] !re(4  7b7 ,effective date ,!
 am5dm5ts made by ?is section %all apply
 to prop]ty plac$ 9 s]vice aft] ! date (
 ! enactm5t ( ?is ,act4