This bill seeks to significantly improve the existing historic rehabilitation tax credit by introducing several key changes. It proposes allowing the full credit to be claimed in the year a building is placed in service, increasing the credit rate for certain small projects, and making those credits transferable. Additionally, the legislation modifies the criteria for eligible buildings, eliminates the credit basis adjustment, and revises rules concerning tax-exempt use property. For qualifying small projects , the bill increases the rehabilitation credit from 20 percent to 30 percent of qualified expenditures, up to a maximum of $3,750,000. This expenditure limit is further raised to $5,000,000 for projects located in rural areas , defined as areas outside of cities or towns with populations over 50,000 or their adjacent urbanized areas. A significant new provision allows for the transferability of these small project credits , requiring certification and outlining specific tax treatments for both transferors and transferees, such as disallowing deductions for consideration paid and excluding transfer proceeds from gross income. Other notable amendments include changing the eligibility requirement for a qualified rehabilitated building by reducing the "substantially rehabilitated" test from 100 percent to 50 percent of the adjusted basis. The bill also eliminates the rehabilitation credit basis adjustment , meaning taxpayers will no longer have to reduce the building's basis by the amount of the credit claimed. Finally, it modifies rules for tax-exempt use property , specifying that disqualified lease rules will only apply when the tax-exempt entity is a government entity, thereby broadening eligibility for other non-governmental tax-exempt organizations.