,,ii  #aah? ,,congress  #a/ ,session    
,s4 #cdcf  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,decemb] #g1 #bjbc,mr4 
,wyd5 7= himself & ,mr4 ,sullivan7      
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to provide a cr$it
 = middle-income h\s+1 & = o!r purposes4
  #a4 ,%ort title ,?is ,act may be cit$ 
z ! ,work=ce ,h\s+ ,tax ,cr$it ,act4    
#b4 ,middle-income h\s+ tax cr$it  7a7  
,9 g5]al ,subp>t ,d ( "p ,,iv ( sub*apt]
 ,a ( *apt] #a ( ! ,int]nal ,rev5ue     
,code ( #aihf is am5d$ by ins]t+ aft]   
section #db ! foll[+ new section3       
#db;,a4 ,middle-income h\s+ cr$it  7a7  
,9 g5]al ,= purposes ( section #ch1 !   
am\nt ( ! middle-income h\s+ cr$it      
det]m9$ "u ?is section = any taxable ye>
 9 ! cr$it p]iod %all be an am\nt equal 
to-- 7#a7 ! applicable p]c5tage1 (  7#b7
 ! qualifi$ basis ( ea* qualifi$        
middle-income build+4  7b7 ,applicable  
p]c5tage  7#a7 ,det]m9ation ( applicable

 p]c5tage ,= purposes ( ?is section--   
7,a7 ,9 g5]al ,! t]m applicable p]c5tage
 means1 ) respect to any build+1 !      
appropriate p]c5tage prescrib$ by !     
,secret>y = ! e>li] (-- 7i7 ! mon? 9 :i*
 su* build+ is plac$ 9 s]vice1 or  7ii7 
at ! election ( ! taxpay]1 ! mon? 9 :i* 
! taxpay] & ! h\s+ cr$it ag5cy ent] into
 an agreem5t ) respect to su* build+    
7:i* is b9d+ on su* ag5cy1 ! taxpay]1 & 
all successors 9 int]e/7 z to ! h\s+    
cr$it doll> am\nt to be allocat$ to su* 
build+4  ,a mon? may be elect$ "u clause
 7ii7 only if ! election is made n lat] 
?an ! #e? day aft] ! close ( su* mon?4  
,su* an election1 once made1 %all be    
irrevocable4  7,b7 ,me?od ( prescrib+   
p]c5tages ,! p]c5tages prescrib$ by !   
,secret>y = any mon? %all be p]c5tages  
:i* w yield ov] a #ae-ye> p]iod am\nts (
 cr$it "u subsection 7a7 :i* h a pres5t 
value equal to-- 7i7 #ej p]c5t ( !      
qualifi$ basis ( a new build+ :i* is n  
f$]ally subsidiz$ = ! taxable ye>1 &    
7ii7 #bj p]c5t ( ! qualifi$ basis ( a   

build+ n describ$ 9 clause 7i74  7,c7   
,me?od ( disc\nt+ ,! pres5t value "u    
subp>agraph 7,b7 %all be det]m9$-- 7i7 z
 ( ! la/ day ( ! #a/ ye> ( ! #ae-ye>    
p]iod ref]r$ to 9 subp>agraph 7,b71     
7ii7 by us+ a disc\nt rate equal to #gb 
p]c5t ( ! av]age ( ! annual ,f$]al      
mid-t]m rate & ! annual ,f$]al long-t]m 
rate applicable "u section #abgd7;d77#a7
 to ! mon? applicable "u clause 7i7 or  
7ii7 ( subp>agraph 7,a7 & comp\nd$      
annually1 &  7iii7 by assum+ t ! cr$it  
all[able "u ?is section = any ye> is    
receiv$ on ! la/ day ( su* ye>4  7#b7   
,m9imum cr$it rate  7,a7 ,9 g5]al ,!    
applicable p]c5tage = any build+ :i* is 
n f$]ally subsidiz$ = ! taxable ye> %all
 n be less ?an #e p]c5t4  7,b7 ,m9imum  
cr$it rate = ,f$]ally subsidiz$ build+s 
,9 ! case ( any build+ to :i*           
subp>agraph 7,a7 does n apply1 except z 
provid$ 9 p>agraph 7#c71 ! applicable   
p]c5tage %all n be less ?an #b p]c5t4   
7#c7 ,exception = c]ta9 ,f$]ally        
subsidiz$ build+s ,9 ! case ( any build+

 to :i* p>agraph 7#b77;,a7 does n apply1
 ! applicable p]c5tage is z]o unless--  
7,a7 a cr$it is all[$ "u section #db )  
respect to su* build+ = ! taxable ye>1 &
  7,b7 su* build+ is f9anc$ by          
tax-exempt bonds z describ$ 9 section   
#db7;h77#d74  7#d7 ,cross ref]5ces  7,a7
 ,= treatm5t ( c]ta9 rehabilitation     
exp5ditures z sep>ate new build+s1 see  
subsection 7e74  7,b7 ,= det]m9ation (  
applicable p]c5tage = increases 9       
qualifi$ basis aft] ! #a/ ye> ( ! cr$it 
p]iod1 see subsection 7f77#c74  7,c7 ,= 
au?ority ( h\s+ cr$it ag5cy to limit    
applicable p]c5tage & qualifi$ basis :i*
 may be tak5 into acc\nt "u ?is section 
) respect to any build+1 see subsection 
7h77#f74  7c7 ,qualifi$ basis2 qualifi$ 
middle-,income build+ ,= purposes ( ?is 
section-- 7#a7 ,qualifi$ basis  7,a7    
,det]m9ation ,! qualifi$ basis ( any    
qualifi$ middle-income build+ = any     
taxable ye> is an am\nt equal to-- 7i7 !
 applicable fraction 7det]m9$ z ( !     
close ( su* taxable ye>72 &  7ii7 !     

eligible basis ( su* build+ 7det]m9$ "u 
subsection 7d774  7,b7 ,applicable      
fraction ,= purposes ( subp>agraph 7,a71
 ! t]m applicable fraction means !      
small] ( ! unit fraction or ! floor     
space fraction4  7,c7 ,unit fraction ,= 
purposes ( subp>agraph 7,b71 ! t]m unit 
fraction means ! fraction-- 7i7 !       
num]ator ( :i* is ! numb] (             
middle-income units 9 ! build+1 &  7ii7 
! d5om9ator ( :i* is ! numb] (          
resid5tial r5tal units 7:e!r or n       
occupi$7 9 su* build+4  7,d7 ,floor     
space fraction ,= purposes ( subp>agraph
 7,b71 ! t]m floor space fraction means 
! fraction-- 7i7 ! num]ator ( :i* is !  
total floor space ( ! middle-income     
units 9 su* build+1 &  7ii7 ! d5om9ator 
( :i* is ! total floor space ( !        
resid5tial r5tal units 7:e!r or n       
occupi$7 9 su* build+4  7#b7 ,qualifi$  
middle-income build+ ,! t]m qualifi$    
middle-income build+ means any build+   
:i* is "p ( a qualifi$ middle-income    
h\s+ project at all times dur+ ! p]iod--

 7,a7 beg9n+ on ! #a/ day 9 ! cr$it     
p]iod on :i* su* build+ is "p ( su* a   
project1 &  7,b7 end+ on ! la/ day ( !  
cr$it p]iod ) respect to su* build+4    
7d7 ,eligible basis ,= purposes ( ?is   
section-- 7#a7 ,new build+s ,! eligible 
basis ( a new build+ is its adju/$ basis
 z ( ! close ( ! #a/ taxable ye> ( !    
cr$it p]iod4  7#b7 ,exi/+ build+s  7,a7 
,9 g5]al ,! eligible basis ( an exi/+   
build+ is-- 7i7 9 ! case ( a build+ :i* 
meets ! requirem5ts ( subp>agraph 7,b71 
its adju/$ basis z ( ! close ( ! #a/    
taxable ye> ( ! cr$it p]iod1 &  7ii7 z]o
 9 any o!r case4  7,b7 ,requirem5ts ,a  
build+ meets ! requirem5ts ( ?is        
subp>agraph if-- 7i7 ! build+ is acquir$
 by pur*ase 7z def9$ 9 section          
#agi7;d77#b771  7ii7 !re is a p]iod ( at
 lea/ #aj ye>s betwe5 ! date ( its      
acquisition by ! taxpay] & ! date !     
build+ 0 la/ plac$ 9 s]vice1  7iii7 !   
build+ 0 n previ\sly plac$ 9 s]vice by !
 taxpay] or by any p]son :o 0 a relat$  
p]son ) respect to ! taxpay] z ( ! "t   

previ\sly plac$ 9 s]vice1 &  7iv7 except
 z provid$ 9 subsection 7f77#e71 a cr$it
 is all[able "u subsection 7a7 by reason
 ( subsection 7e7 ) respect to ! build+4
  7,c7 ,adju/$ basis ,= purposes (      
subp>agraph 7,a71 ! adju/$ basis ( any  
build+ %all n include s mu* ( ! basis ( 
su* build+ z is det]m9$ by ref]5ce to ! 
basis ( o!r prop]ty held at any "t by ! 
p]son acquir+ ! build+4  7,d7 ,special  
rules  7i7 ,special rules = c]ta9       
transf]s ,= purposes ( det]m9+ "u       
subp>agraph 7,b77ii7 :5 a build+ 0 la/  
plac$ 9 s]vice1 !re %all n be tak5 into 
acc\nt any placem5t 9 s]vice-- 7,i7 9   
connection ) ! acquisition ( ! build+ 9 
a transaction 9 :i* ! basis ( ! build+ 9
 ! h&s ( ! p]son acquir+ x is det]m9$ 9 
:ole or 9 "p by ref]5ce to ! adju/$     
basis ( su* build+ 9 ! h&s ( ! p]son f  
:om acquir$1  7,,ii7 by a p]son ^: basis
 9 su* build+ is det]m9$ "u section     
#ajad7;a7 7relat+ to prop]ty acquir$ f a
 dec$5t71  7,,iii7 by any gov]nm5tal    
unit or qualifi$ nonpr(it organization  

if ! requirem5ts ( subp>agraph 7,b77ii7 
are met ) respect to ! placem5t 9 s]vice
 by su* unit or organization & all !    
income f su* prop]ty is exempt f ,f$]al 
income taxation1  7,,iv7 by any p]son :o
 acquir$ su* build+ by =eclosure 7or by 
in/rum5t 9 lieu ( =eclosure7 ( any      
pur*ase-money security int]e/ held by   
su* p]son if ! requirem5ts ( subp>agraph
 7,b77ii7 are met ) respect to !        
placem5t 9 s]vice by su* p]son & su*    
build+ is resold )9 #ab mon?s aft] !    
date su* build+ is plac$ 9 s]vice by su*
 p]son aft] su* =eclosure1 or  7,v7 ( a 
s+le-family resid5ce by any individual  
:o own$ & us$ su* resid5ce = no o!r     
purpose ?an z 8 pr9cipal resid5ce4  7ii7
 ,relat$ p]son ,= purposes ( subp>agraph
 7,b77iii71 a p]son 7h]e9aft] 9 ?is     
subclause ref]r$ to z ! relat$ p]son7 is
 relat$ to any p]son if ! relat$ p]son  
be>s a relation%ip to su* p]son specifi$
 9 section #bfg7;b7 or #gjg7;b77#a71 or 
! relat$ p]son & su* p]son are engag$ 9 
trades or bus9esses "u common control   

7)9 ! mean+ ( subsections 7a7 & 7b7 (   
section #eb74  7#c7 ,special rules      
relat+ to det]m9ation ( adju/$ basis ,= 
purposes ( ?is subsection-- 7,a7 ,9     
g5]al ,except z provid$ 9 subp>agraph   
7,b71 ! adju/$ basis ( any build+ %all  
be det]m9$ )\t reg>d to ! adju/$ basis (
 any prop]ty :i* is n resid5tial r5tal  
prop]ty4  7,b7 ,basis ( prop]ty 9 common
 areas1 etc41 includ$  7i7 ,9 g5]al     
,except z provid$ 9 clause 7ii71 !      
adju/$ basis ( any build+ %all be       
det]m9$ by tak+ into acc\nt ! adju/$    
basis ( prop]ty 7( a "* subject to !    
all[ance = depreciation7 us$ 9 common   
areas or provid$ z comp>able am5ities to
 all resid5tial r5tal units 9 su*       
build+4  7ii7 ,special rule ,9 ! case ( 
any build+ = :i* ! l[-income h\s+ tax   
cr$it is all[able "u section #db1 !     
adju/$ basis ( ! build+ "u ?is section  
%all be det]m9$ )\t reg>d to prop]ty us$
 9 common areas or provid$ z comp>able  
am5ities to all resid5tial r5tal units 9
 su* build+4  7,c7 ,no r$uction =       

depreciation ,! adju/$ basis ( any      
build+ %all be det]m9$ )\t reg>d to     
p>agraphs 7#b7 & 7#c7 ( section         
#ajaf7;a74  7#d7 ,special rules =       
det]m9+ eligible basis  7,a7 ,f$]al     
grants n tak5 into acc\nt 9 det]m9+     
eligible basis ,! eligible basis ( a    
build+ %all n include any co/s f9anc$ ) 
! proce$s ( a f$]ally fund$ grant4  7,b7
 ,increase 9 cr$it = build+s 9 high co/ 
areas  7i7 ,9 g5]al ,9 ! case ( any     
build+ locat$ 9 a difficult developm5t  
area :i* is designat$ = purposes ( ?is  
subp>agraph-- 7,i7 9 ! case ( a new     
build+1 ! eligible basis ( su* build+   
%all be #acj p]c5t ( su* basis det]m9$  
)\t reg>d to ?is subp>agraph1 &  7,,ii7 
9 ! case ( an exi/+ build+1 !           
rehabilitation exp5ditures tak5 into    
acc\nt "u subsection 7e7 %all be #acj   
p]c5t ( su* exp5ditures det]m9$ )\t     
reg>d to ?is subp>agraph4  7ii7         
,limitation ,clause 7i7 %all n apply to 
any build+ if p>agraph 7#a7 ( subsection
 7h7 does n apply to any portion ( !    

eligible basis ( su* build+ by reason ( 
p>agraph 7#i7 ( su* subsection4  7iii7  
,difficult developm5t areas  7,i7 ,9    
g5]al ,! t]m difficult developm5t areas 
means any area designat$ by ! ,secret>y 
( ,h\s+ & ,urban ,developm5t z an area  
:i* has high con/ruction1 l&1 or utility
 co/s relative to area m$ian gross      
income1 any rural area1 & any ,indian   
area4  7,,ii7 ,rural area ,= purposes ( 
subclause 7,i71 ! t]m rural area means  
any non-metropolitan area1 or any rural 
area z def9$ by section #ebj ( ! ,h\s+  
,act ( #aidi1 :i* is id5tifi$ by !      
qualifi$ allocation plan "u subsection  
7m77#a77;,b74  7,,iii7 ,indian area ,=  
purposes ( subclause 7,i71 ! t]m ,indian
 area means any ,indian area 7z def9$ 9 
section #d7aa7 ( ! ,native ,am]ican     
,h\s+ ,assi/ance & ,self ,det]m9ation   
,act ( #aiif 7#be ,u4,s4,c4 #dajc7aa7774
  7,,iv7 ,special rule = build+s 9      
,indian areas ,9 ! case ( an area :i* is
 a difficult developm5t area solely     
because x is an ,indian area1 a build+  

%all n be treat$ z locat$ 9 su* area    
unless su* build+ is assi/$ or f9anc$ "u
 ! ,native ,am]ican ,h\s+ ,assi/ance &  
,self ,det]m9ation ,act ( #aiif 7#be    
,u4,s4,c4 #daja et seq47 or ! project   
sponsor is an ,indian tribe 7z def9$ 9  
section #de;,a7c77#f771 a tribally      
designat$ h\s+ entity 7z def9$ 9 section
 #d7bb7 ( su* ,act 7#be ,u4,s4,c4       
#dajc7bb7771 or :olly own$ or controll$ 
by su* an ,indian tribe or tribally     
designat$ h\s+ entity4  7,v7 ,limit on  
areas designat$ ,! portions (           
metropolitan /ati/ical areas :i* may be 
designat$ = purposes ( ?is subp>agraph  
%all n exce$ an aggregate area hav+ #bj 
p]c5t ( ! population ( su* metropolitan 
/ati/ical areas4 ,a comp>able rule %all 
apply to nonmetropolitan areas4  7iv7   
,special rules & def9itions ,= purposes 
( ?is subp>agraph-- 7,i7 population %all
 be det]m9$ on ! basis ( ! mo/ rec5t    
dec5nial c5sus = :i* data are available1
  7,,ii7 area m$ian gross income %all be
 det]m9$ 9 accordance ) subsection      

7g77#d71  7,,iii7 ! t]m metropolitan    
/ati/ical area has ! same mean+ z :5 us$
 9 section #adc7k77#b77;,b71 &  7,,iv7 !
 t]m nonmetropolitan area means any     
c\nty 7or portion !re(7 :i* is n )9 a   
metropolitan /ati/ical area4  7v7       
,build+s designat$ by ,/ate ,h\s+ ,cr$it
 ,ag5cy ,any build+ :i* is designat$ by 
! ,/ate h\s+ cr$it ag5cy z requir+ !    
increase 9 cr$it "u ?is subp>agraph 9   
ord] = su* build+ to be f9ancially      
feasible z "p ( a qualifi$ middle-income
 h\s+ project %all be treat$ = purposes 
( ?is subp>agraph z locat$ 9 a difficult
 developm5t area :i* is designat$ =     
purposes ( ?is subp>agraph4  7#e7 ,cr$it
 all[able = c]ta9 build+s acquir$ dur+  
#aj-ye> p]iod ,on application by !      
taxpay]1 ! ,secret>y may waive p>agraph 
7#b77;,b77ii7 ) respect to any build+   
acquir$ f an insur$ depository          
in/itution 9 default 7z def9$ 9 section 
#c ( ! ,f$]al ,deposit ,insurance ,act7 
or f a receiv] or cons]vator ( su* an   
in/itution4  7#f7 ,acquisition ( build+ 

be=e end ( prior cr$it p]iod  7,a7 ,9   
g5]al ,"u regulations prescrib$ by !    
,secret>y1 9 ! case ( a build+ describ$ 
9 subp>agraph 7,b7 7or int]e/ !re97 :i* 
is acquir$ by ! taxpay]-- 7i7 p>agraph  
7#b77;,b7 %all n apply1 b  7ii7 ! cr$it 
all[able by reason ( subsection 7a7 to !
 taxpay] = any p]iod aft] su*           
acquisition %all be equal to ! am\nt (  
cr$it :i* w\ld h be5 all[able "u        
subsection 7a7 = su* p]iod to ! prior   
own] ref]r$ to 9 subp>agraph 7,b7 _h su*
 own] n dispos$ ( ! build+4  7,b7       
,description ( build+ ,a build+ is      
describ$ 9 ?is subp>agraph if-- 7i7 a   
cr$it 0 all[$ by reason ( subsection 7a7
 to any prior own] ( su* build+1 &  7ii7
 ! taxpay] acquir$ su* build+ be=e ! end
 ( ! cr$it p]iod = su* build+ ) respect 
to su* prior own] 7det]m9$ )\t reg>d to 
any disposition by su* prior own]74  7e7
 ,rehabilitation exp5ditures treat$ z   
sep>ate new build+  7#a7 ,9 g5]al       
,rehabilitation exp5ditures paid or     
incurr$ by ! taxpay] ) respect to any   

build+ %all be treat$ = purposes ( ?is  
section z a sep>ate new build+4  7#b7   
,rehabilitation exp5ditures ,= purposes 
( p>agraph 7#a7-- 7,a7 ,9 g5]al ,! t]m  
rehabilitation exp5ditures means am\nts 
*>geable to capital acc\nt & incurr$ =  
prop]ty 7or additions or improvem5ts to 
prop]ty7 ( a "* subject to ! all[ance = 
depreciation 9 connection ) !           
rehabilitation ( a build+4  7,b7 ,co/ ( 
acquisition1 etc41 n includ$ ,su* t]m   
does n include ! co/ ( acquir+ any      
build+ 7or int]e/ !re97 or any am\nt n  
p]mitt$ to be tak5 into acc\nt "u       
p>agraph 7#c7 ( subsection 7d74  7,c7   
,c]ta9 relocation co/s ,9 ! case ( a    
rehabilitation ( a build+ to :i* section
 #bhj;,b does n apply1 co/s relat+ to ! 
relocation ( occupants1 includ+-- 7i7   
am\nts paid to occupants1  7ii7 am\nts  
paid to ?ird p>ties = s]vices relat+ to 
su* relocation1 &  7iii7 am\nts paid =  
tempor>y h\s+ = occupants1  %all be     
treat$ z *>geable to capital acc\nt &   
tak5 into acc\nt z rehabilitation       

exp5ditures4  7#c7 ,m9imum exp5ditures  
to qualify  7,a7 ,9 g5]al ,p>agraph 7#a7
 %all apply to rehabilitation           
exp5ditures ) respect to any build+ only
 if-- 7i7 ! exp5ditures are allocable to
 #a or m middle-income units or         
sub/antially b5efit su* units1 &  7ii7 !
 am\nt ( su* exp5ditures dur+ any       
#bd-mon? p]iod meets ! requirem5ts (    
:i*ev] ( ! foll[+ subclauses requires ! 
great] am\nt ( su* exp5ditures3 7,i7 ,! 
requirem5t ( ?is subclause is met if su*
 am\nt is n less ?an #bj p]c5t ( !      
adju/$ basis ( ! build+ 7det]m9$ z ( !  
#a/ day ( su* p]iod & )\t reg>d to      
p>agraphs 7#b7 & 7#c7 ( section         
#ajaf7;a774  7,,ii7 ,! requirem5t ( ?is 
subclause is met if ! qualifi$ basis    
attributable to su* am\nt1 :5 divid$ by 
! numb] ( middle-income units 9 !       
build+1 is equal to or great] ?an !     
doll> am\nt 9 effect "u section         
#db7;e77#c77;,a77ii77,,ii7 = ! cal5d>   
ye> 9 :i* su* exp5ditures are treat$ z  
plac$ 9 s]vice "u p>agraph 7#d74  7,b7  

,date ( det]m9ation ,! det]m9ation "u   
subp>agraph 7,a7 %all be made z ( !     
close ( ! #a/ taxable ye> 9 ! cr$it     
p]iod ) respect to su* exp5ditures4     
7#d7 ,special rules ,= purposes ( apply+
 ?is section ) respect to exp5ditures   
:i* are treat$ z a sep>ate build+ by    
reason ( ?is subsection-- 7,a7 su*      
exp5ditures %all be treat$ z plac$ 9    
s]vice at ! close ( ! #bd-mon? p]iod    
ref]r$ to 9 p>agraph 7#c77;,a71 &  7,b7 
! applicable fraction "u subsection     
7c77#a7 %all be ! applicable fraction = 
! build+ 7)\t reg>d to p>agraph 7#a77 ) 
respect to :i* ! exp5ditures 7 incurr$4 
,no?+ 9 subsection 7d77#b7 %all prev5t a
 cr$it f be+ all[$ by reason ( ?is      
subsection4  7#e7 ,no d\ble c\nt+       
,rehabilitation exp5ditures may1 at !   
election ( ! taxpay]1 be tak5 into      
acc\nt "u ?is subsection or subsection  
7d77#b77;,a77i7 b n "u bo? su*          
subsections4  7#f7 ,regulations to apply
 subsection ) respect to gr\p ( units 9 
build+ ,! ,secret>y may prescribe       

regulations1 consi/5t ) ! purposes ( ?is
 subsection1 treat+ a gr\p ( units )    
respect to :i* rehabilitation           
exp5ditures are incurr$ z a sep>ate new 
build+4  7f7 ,def9ition & special rules 
relat+ to cr$it p]iod  7#a7 ,cr$it p]iod
 def9$ ,= purposes ( ?is section1 ! t]m 
cr$it p]iod means1 ) respect to any     
build+1 ! p]iod ( #ae taxable ye>s      
beg9n+ )-- 7,a7 ! taxable ye> 9 :i* !   
build+ is plac$ 9 s]vice1 or  7,b7 at ! 
election ( ! taxpay]1 ! succe$+ taxable 
ye>1  b only if ! build+ is a qualifi$  
middle-income build+ z ( ! close ( ! #a/
 ye> ( su* p]iod4 ,! election "u        
subp>agraph 7,b71 once made1 %all be    
irrevocable4  7#b7 ,special rule = #a/  
ye> ( cr$it p]iod  7,a7 ,9 g5]al ,!     
cr$it all[able "u subsection 7a7 )      
respect to any build+ = ! #a/ taxable   
ye> ( ! cr$it p]iod %all be det]m9$ by  
sub/itut+ = ! applicable fraction "u    
subsection 7c77#a7 ! fraction-- 7i7 !   
num]ator ( :i* is ! sum ( ! applicable  
fractions det]m9$ "u subsection 7c77#a7 

z ( ! close ( ea* full mon? ( su* ye>   
dur+ :i* su* build+ 0 9 s]vice1 &  7ii7 
! d5om9ator ( :i* is #ab4  7,b7         
,disall[$ #a/-ye> cr$it all[$ 9 #af? ye>
 ,any r$uction by reason ( subp>agraph  
7,a7 9 ! cr$it all[able 7)\t reg>d to   
subp>agraph 7,a77 = ! #a/ taxable ye> ( 
! cr$it p]iod %all be all[able "u       
subsection 7a7 = ! #a/ taxable ye>      
foll[+ ! cr$it p]iod4  7#c7 ,det]m9ation
 ( applicable p]c5tage ) respect to     
increases 9 qualifi$ basis aft] #a/ ye> 
( cr$it p]iod  7,a7 ,9 g5]al ,9 ! case (
 any build+ :i* 0 a qualifi$            
middle-income build+ z ( ! close ( ! #a/
 ye> ( ! cr$it p]iod1 if-- 7i7 z ( !    
close ( any taxable ye> 9 ! cr$it p]iod 
7aft] ! #a/ ye> ( su* p]iod7 ! qualifi$ 
basis ( su* build+1 exce$s  7ii7 !      
qualifi$ basis ( su* build+ z ( ! close 
( ! #a/ ye> ( ! cr$it p]iod1  !         
applicable p]c5tage :i* %all apply "u   
subsection 7a7 = ! taxable ye> to su*   
excess %all be ! p]c5tage equal to #b_/c
 ( ! applicable p]c5tage :i* 7aft] !    

application ( subsection 7h77 w\ld b =  
?is p>agraph apply to su* basis4  7,b7  
#a/ ye> computation applies ,a rule     
simil> to ! rule ( p>agraph 7#b77;,a7   
%all apply to any increase 9 qualifi$   
basis to :i* subp>agraph 7,a7 applies = 
! #a/ ye> ( su* increase4  7#d7         
,dispositions ( prop]ty ,if a build+ 7or
 an int]e/ !re97 is dispos$ ( dur+ any  
ye> = :i* cr$it is all[able "u          
subsection 7a71 su* cr$it %all be       
allocat$ betwe5 ! p>ties on ! basis ( ! 
numb] ( days dur+ su* ye> ! build+ 7or  
int]e/7 0 held by ea*4  7#e7 ,cr$it     
p]iod = exi/+ build+s n to beg9 be=e    
rehabilitation cr$it all[$  7,a7 ,9     
g5]al ,! cr$it p]iod = an exi/+ build+  
%all n beg9 be=e ! #a/ taxable ye> ( !  
cr$it p]iod = rehabilitation exp5ditures
 ) respect to ! build+4  7,b7           
,acquisition cr$it all[$ = c]ta9 build+s
 n all[$ a rehabilitation cr$it  7i7 ,9 
g5]al ,9 ! case ( a build+ describ$ 9   
clause 7ii7-- 7,i7 subsection           
7d77#b77;,b77iv7 %all n apply1 &  7,,ii7

 ! cr$it p]iod = su* build+ %all n beg9 
be=e ! taxable ye> :i* w\ld be ! #a/    
taxable ye> ( ! cr$it p]iod =           
rehabilitation exp5ditures ) respect to 
! build+ "u ! modifications describ$ 9  
clause 7ii77,,ii74  7ii7 ,build+        
describ$ ,a build+ is describ$ 9 ?is    
clause if-- 7,i7 a waiv] is grant$ "u   
subsection 7d77#d7 ) respect to !       
acquisition ( ! build+1 &  7,,ii7 a     
cr$it w\ld be all[$ = rehabilitation    
exp5ditures ) respect to su* build+ if  
subsection 7e77#c77;,a77ii77,i7 did n   
apply & if ! doll> am\nt 9 effect "u    
subsection 7e77#c77;,a77ii77,,ii7 7     
two-?irds ( su* am\nt4  7g7 ,qualifi$   
middle-,income h\s+ project ,= purposes 
( ?is section-- 7#a7 ,9 g5]al ,! t]m    
qualifi$ middle-income h\s+ project     
means any project = resid5tial r5tal    
prop]ty if-- 7,a7 #fj p]c5t or m ( !    
resid5tial units 9 su* project are bo?  
r5t-re/rict$ & occupi$ by individuals ^:
 income is #ajj p]c5t or less ( area    
m$ian gross income1 &  7,b7 n less ?an  

#bj p]c5t ( ! resid5tial units 9 su*    
project are units :i*-- 7i7 are describ$
 9 subp>agraph 7,a71 &  7ii7 are n      
resid5tial units :i* are tak5 into      
acc\nt "u section #db4  7#b7            
,r5t-re/rict$ units  7,a7 ,9 g5]al ,=   
purposes ( p>agraph 7#a71 a resid5tial  
unit is r5t-re/rict$ if ! gross r5t )   
respect to su* unit does n exce$ #cj    
p]c5t ( ! imput$ income limitation      
applicable to su* unit4 ,= purposes ( ! 
prec$+ s5t5ce1 ! am\nt ( ! income       
limitation "u p>agraph 7#a7 applicable =
 any p]iod %all n be less ?an su*       
limitation applicable = ! e>lie/ p]iod !
 build+ 7:i* conta9s ! unit7 0 includ$ 9
 ! det]m9ation ( :e!r ! project is a    
qualifi$ middle-income h\s+ project4    
7,b7 ,gross r5t ,= purposes (           
subp>agraph 7,a71 gross r5t-- 7i7       
includes any utility all[ance det]m9$ by
 ! ,secret>y aft] tak+ into acc\nt su*  
det]m9ations "u section #h ( ! ,unit$   
,/ates ,h\s+ ,act ( #aicg1  7ii7 does n 
include any fee = a supportive s]vice   

:i* is paid to ! own] ( ! unit 7on !    
basis ( ! middle-income /atus ( ! t5ant 
( ! unit7 by any gov]nm5tal program (   
assi/ance 7or by an organization        
describ$ 9 section #eja7;c77#c7 & exempt
 f tax "u section #eja7;a77 if su*      
program 7or organization7 provides      
assi/ance = r5t & ! am\nt ( assi/ance   
provid$ = r5t is n sep>able f ! am\nt ( 
assi/ance provid$ = supportive s]vices1 
&  7iii7 does n include any r5tal paym5t
 to ! own] ( ! unit to ! ext5t su* own] 
pays an equival5t am\nt to ! ,f>m]s'    
,home ,adm9i/ration "u section #eae ( ! 
,h\s+ ,act ( #aidi4  ,= purposes (      
clause 7ii71 ! t]m supportive s]vice    
means any s]vice provid$ "u a plann$    
program ( s]vices design$ to enable     
resid5ts ( a resid5tial r5tal prop]ty to
 rema9 indep5d5t & avoid placem5t 9 a   
hospital1 nurs+ home1 or int]m$iate c>e 
facility = ! m5tally or physically      
h&icapp$4  7,c7 ,imput$ income          
limitation applicable to unit ,=        
purposes ( ?is p>agraph1 ! imput$ income

 limitation applicable to a unit is !   
income limitation :i* w\ld apply "u     
p>agraph 7#a7 to individuals occupy+ !  
unit if ! numb] ( individuals occupy+ ! 
unit 7 z foll[s3 7i7 ,9 ! case ( a unit 
:i* does n h a sep>ate b$room1 #a       
individual4  7ii7 ,9 ! case ( a unit :i*
 has #a or m sep>ate b$rooms1 #a4e      
individuals = ea* sep>ate b$room4  ,9 ! 
case ( a project ) respect to :i* a     
cr$it is all[able by reason ( ?is       
section & = :i* f9anc+ is provid$ by a  
bond describ$ 9 section #adb7;a77#g71 ! 
imput$ income limitation %all apply 9   
lieu ( ! o!rwise applicable income      
limitation = purposes ( apply+ section  
#adb7;d77#d77;,b77ii74  7,d7 ,treatm5t (
 units occupi$ by individuals ^: incomes
 rise above limit  7i7 ,9 g5]al ,except 
z provid$ 9 clause 7ii71 not)/&+ an     
increase 9 ! income ( ! occupants ( a   
middle-income unit above ! income       
limitation applicable "u p>agraph 7#a71 
su* unit %all cont9ue to be treat$ z a  
middle-income unit if ! income ( su*    

occupants initially met su* income      
limitation & su* unit cont9ues to be    
r5t-re/rict$4  7ii7 ,next available unit
 mu/ be r5t$ to middle-income t5ant if  
income rises above #adj p]c5t ( income  
limit ,if ! income ( ! occupants ( !    
unit increases above #adj p]c5t ( !     
income limitation applicable "u p>agraph
 7#a71 clause 7i7 %all cease to apply to
 su* unit if any resid5tial r5tal unit 9
 ! build+ 7( a size comp>able to1 or    
small] ?an1 su* unit7 is occupi$ by a   
new resid5t ^: income exce$s su* income 
limitation4  7#c7 ,date = meet+         
requirem5ts  7,a7 ,9 g5]al ,except z    
o!rwise provid$ 9 ?is p>agraph1 a build+
 %all be treat$ z a qualifi$            
middle-income build+ only if ! project  
7( :i* su* build+ is a "p7 meets !      
requirem5ts ( p>agraph 7#a7 n lat] ?an !
 close ( ! #a/ ye> ( ! cr$it p]iod = su*
 build+4  7,b7 ,build+s :i* rely on lat]
 build+s = qualification  7i7 ,9 g5]al  
,9 det]m9+ :e!r a build+ 7h]e9aft] 9 ?is
 subp>agraph ref]r$ to z ! prior build+7

 is a qualifi$ middle-income build+1 !  
taxpay] may take into acc\nt #a or m    
additional build+s plac$ 9 s]vice dur+ !
 #ab-mon? p]iod describ$ 9 subp>agraph  
7,a7 ) respect to ! prior build+ only if
 ! taxpay] elects to apply clause 7ii7 )
 respect to ea* additional build+ tak5  
into acc\nt4  7ii7 ,treatm5t ( elect$   
build+s ,9 ! case ( a build+ :i* !      
taxpay] elects to take into acc\nt "u   
clause 7i71 ! p]iod "u subp>agraph 7,a7 
= su* build+ %all end at ! close ( !    
#ab-mon? p]iod applicable to ! prior    
build+4  7iii7 ,date prior build+ is    
treat$ z plac$ 9 s]vice ,= purposes (   
det]m9+ ! cr$it p]iod = ! prior build+1 
! prior build+ %all be treat$ = purposes
 ( ?is section z plac$ 9 s]vice on ! mo/
 rec5t date any additional build+ elect$
 by ! taxpay] 7) respect to su* prior   
build+7 0 plac$ 9 s]vice4  7,c7 ,special
 rule ,a build+-- 7i7 o!r ?an ! #a/     
build+ plac$ 9 s]vice z "p ( a project1 
&  7ii7 o!r ?an a build+ :i* is plac$ 9 
s]vice dur+ ! #ab-mon? p]iod describ$ 9 

subp>agraph 7,a7 ) respect to a prior   
build+ :i* becomes a qualifi$           
middle-income build+1  %all 9 no ev5t be
 treat$ z a qualifi$ middle-income      
build+ unless ! project is a qualifi$   
middle-income h\s+ project 7)\t reg>d to
 su* build+7 on ! date su* build+ is    
plac$ 9 s]vice4  7,d7 ,projects ) m ?an 
#a build+ mu/ be id5tifi$ ,= purposes ( 
?is section1 a project %all be treat$ z 
consi/+ ( only #a build+ unless1 be=e ! 
close ( ! #a/ cal5d> ye> 9 ! project    
p]iod 7z def9$ 9 subsection             
7h77#a77;,f77ii771 ea* build+ :i* is 7or
 w be7 "p ( su* project is id5tifi$ 9   
su* =m & mann] z ! ,secret>y may        
provide4  7#d7 ,c]ta9 rules made        
applicable ,p>agraphs 7#b7 7o!r ?an     
subp>agraph 7,a7 !re(71 7#c71 & 7#g7 (  
section #adb7;d71 & section #ffeb7;j71  
%all apply = purposes ( det]m9+ :e!r any
 project is a qualifi$ middle-income    
h\s+ project & :e!r any unit is a       
middle-income unit2 except t1 9 apply+  
su* provisions = su* purposes-- 7,a7 !  

t]m gross r5t %all h ! mean+ giv5 su*   
t]m by p>agraph 7#b77;,b7 ( ?is         
subsection1 &  7,b7 ! t]m applicable    
income limit means ! limitation "u      
p>agraph 7#a7 ( ?is subsection4  7#e7   
,election to treat build+ aft] cr$it    
p]iod z n "p ( a project ,= purposes (  
?is section1 ! taxpay] may elect to     
treat any build+ z n "p ( a qualifi$    
middle-income h\s+ project = any p]iod  
beg9n+ aft] ! cr$it p]iod = su* build+4 
7#f7 ,special rule :]e de m9imis equity 
contribution ,prop]ty %all n be treat$ z
 fail+ to be resid5tial r5tal prop]ty = 
purposes ( ?is section m]ely because !  
occupant ( a resid5tial unit 9 ! project
 pays 7on a volunt>y basis7 to ! lessor 
a de m9imis am\nt to be held t[>d !     
pur*ase by su* occupant ( a resid5tial  
unit 9 su* project if-- 7,a7 all am\nts 
s paid are refund$ to ! occupant on !   
cessation ( 8 occupancy ( a unit 9 !    
project1 &  7,b7 ! pur*ase ( ! unit is n
 p]mitt$ until aft] ! close ( ! cr$it   
p]iod ) respect to ! build+ 9 :i* ! unit

 is locat$4  ,any am\nt paid to ! lessor
 z describ$ 9 ! prec$+ s5t5ce %all be   
includ$ 9 gross r5t "u p>agraph 7#b7 =  
purposes ( det]m9+ :e!r ! unit is       
r5t-re/rict$4  7#g7 ,scatt]$ site       
projects ,build+s :i* w\ld 7b = _! lack 
( proximity7 be treat$ z a project =    
purposes ( ?is section %all be s treat$ 
if all ( ! dwell+ units 9 ea* ( !       
build+s are r5t-re/rict$ 7)9 ! mean+ (  
p>agraph 7#b77 resid5tial r5tal units4  
7#h7 ,waiv] ( c]ta9 rec]tifications ,on 
application by ! taxpay]1 ! ,secret>y   
may waive any annual rec]tification (   
t5ant income = purposes ( ?is           
subsection1 if ! entire build+ is       
occupi$ by middle-income t5ants4  7#i7  
,cl>ification ( g5]al public use        
requirem5t ,a project does n fail to    
meet ! g5]al public use requirem5t      
solely because ( occupancy re/rictions  
or pref]5ces t favor t5ants-- 7,a7 )    
special ne$s1 or  7,b7 :o are memb]s ( a
 specifi$ gr\p "u a ,f$]al program or   
,/ate program or policy t supports h\s+ 

= su* a specifi$ gr\p4  7h7 ,limitation 
on aggregate cr$it all[able ) respect to
 projects locat$ 9 a ,/ate  7#a7 ,cr$it 
may n exce$ cr$it am\nt allocat$ to     
build+  7,a7 ,9 g5]al ,! am\nt ( ! cr$it
 det]m9$ "u ?is section = any taxable   
ye> ) respect to any build+ %all n exce$
 ! h\s+ cr$it doll> am\nt allocat$ to   
su* build+ "u ?is subsection4  7,b7 ,"t 
= mak+ allocation ,except 9 ! case ( an 
allocation :i* meets ! requirem5ts (    
subp>agraph 7,c71 7,d71 7,e71 or 7,f71  
an allocation %all be tak5 into acc\nt  
"u subp>agraph 7,a7 only if x is made n 
lat] ?an ! close ( ! cal5d> ye> 9 :i* ! 
build+ is plac$ 9 s]vice4  7,c7         
,exception :]e b9d+ commitm5t ,an       
allocation meets ! requirem5ts ( ?is    
subp>agraph if !re is a b9d+ commitm5t  
7n lat] ?an ! close ( ! cal5d> ye> 9 :i*
 ! build+ is plac$ 9 s]vice7 by ! h\s+  
cr$it ag5cy to allocate a specifi$ h\s+ 
cr$it doll> am\nt to su* build+ beg9n+ 9
 a specifi$ lat] taxable ye>4  7,d7     
,exception :]e increase 9 qualifi$ basis

  7i7 ,9 g5]al ,an allocation meets !   
requirem5ts ( ?is subp>agraph if su*    
allocation is made n lat] ?an ! close ( 
! cal5d> ye> 9 :i* ends ! taxable ye> to
 :i* x w #a/ apply b only to ! ext5t !  
am\nt ( su* allocation does n exce$ !   
limitation "u clause 7ii74  7ii7        
,limitation ,! limitation "u ?is clause 
is ! am\nt ( cr$it all[able "u ?is      
section 7)\t reg>d to ?is subsection7 = 
a taxable ye> ) respect to an increase 9
 ! qualifi$ basis ( ! build+ equal to ! 
excess (-- 7,i7 ! qualifi$ basis ( su*  
build+ z ( ! close ( ! #a/ taxable ye>  
to :i* su* allocation w apply1 ov]      
7,,ii7 ! qualifi$ basis ( su* build+ z (
 ! close ( ! #a/ taxable ye> to :i* !   
mo/ rec5t prior h\s+ cr$it allocation ) 
respect to su* build+ appli$4  7iii7    
,h\s+ cr$it doll> am\nt r$uc$ by full   
allocation ,not)/&+ clause 7i71 ! full  
am\nt ( ! allocation %all be tak5 into  
acc\nt "u p>agraph 7#b74  7,e7          
,exception :]e #aj p]c5t ( co/ incurr$  
7i7 ,9 g5]al ,an allocation meets !     

requirem5ts ( ?is subp>agraph if su*    
allocation is made ) respect to a       
qualifi$ build+ :i* is plac$ 9 s]vice n 
lat] ?an ! close ( ! second cal5d> ye>  
foll[+ ! cal5d> ye> 9 :i* ! allocation  
is made4  7ii7 ,qualifi$ build+ ,=      
purposes ( clause 7i71 ! t]m qualifi$   
build+ means any build+ :i* is "p ( a   
project if ! taxpay]'s basis 9 su*      
project 7z ( ! date :i* is #a ye> aft] !
 date t ! allocation 0 made7 is m ?an   
#aj p]c5t ( ! taxpay]'s reasonably      
expect$ basis 9 su* project 7z ( ! close
 ( ! second cal5d> ye> ref]r$ to 9      
clause 7i774 ,su* t]m does n include any
 exi/+ build+ unless a cr$it is all[able
 "u subsection 7e7 = rehabilitation     
exp5ditures paid or incurr$ by ! taxpay]
 ) respect to su* build+ = a taxable ye>
 end+ dur+ ! second cal5d> ye> ref]r$ to
 9 clause 7i7 or ! prior taxable ye>4   
7,f7 ,allocation ( cr$it on a project   
basis  7i7 ,9 g5]al ,9 ! case ( a       
project :i* includes 7or w include7 m   
?an #a build+1 an allocation meets !    

requirem5ts ( ?is subp>agraph if-- 7,i7 
! allocation is made to ! project = a   
cal5d> ye> dur+ ! project p]iod1  7,,ii7
 ! allocation only applies to build+s   
plac$ 9 s]vice dur+ or aft] ! cal5d> ye>
 = :i* ! allocation is made1 &  7,,iii7 
! portion ( su* allocation :i* is       
allocat$ to any build+ 9 su* project is 
specifi$ n lat] ?an ! close ( ! cal5d>  
ye> 9 :i* ! build+ is plac$ 9 s]vice4   
7ii7 ,project p]iod ,= purposes ( clause
 7i71 ! t]m project p]iod means !       
p]iod-- 7,i7 beg9n+ ) ! #a/ cal5d> ye> =
 :i* an allocation may be made = ! #a/  
build+ plac$ 9 s]vice z "p ( su*        
project1 &  7,,ii7 end+ ) ! cal5d> ye> !
 la/ build+ is plac$ 9 s]vice z "p ( su*
 project4  7#b7 ,allocat$ cr$it am\nt to
 apply to all taxable ye>s end+ dur+ or 
aft] cr$it allocation ye> ,any h\s+     
cr$it doll> am\nt allocat$ to any build+
 = any cal5d> ye>-- 7,a7 %all apply to  
su* build+ = all taxable ye>s 9 ! cr$it 
p]iod end+ dur+ or aft] su* cal5d> ye>1 
&  7,b7 %all r$uce ! aggregate h\s+     

cr$it doll> am\nt ( ! allocat+ ag5cy    
only = su* cal5d> ye>4  7#c7 ,h\s+ cr$it
 doll> am\nt = ag5cies  7,a7 ,9 g5]al ,!
 aggregate h\s+ cr$it doll> am\nt :i* a 
h\s+ cr$it ag5cy may allocate = any     
cal5d> ye> is ! portion ( ! ,/ate h\s+  
cr$it ceil+ allocat$ "u ?is p>agraph =  
su* cal5d> ye> to su* ag5cy4  7,b7 ,/ate
 ceil+ initially allocat$ to ,/ate h\s+ 
cr$it ag5cies ,except z provid$ 9       
subp>agraph 7,d71 ! ,/ate h\s+ cr$it    
ceil+ = ea* cal5d> ye> %all be allocat$ 
to ! h\s+ cr$it ag5cy ( su* ,/ate4 ,if  
!re is m ?an #a h\s+ cr$it ag5cy ( a    
,/ate1 all su* ag5cies %all be treat$ z 
a s+le ag5cy4  7,c7 ,/ate h\s+ cr$it    
ceil+ ,! ,/ate h\s+ cr$it ceil+         
applicable to any ,/ate = any cal5d> ye>
 %all be an am\nt equal to ! sum (-- 7i7
 ! unus$ ,/ate h\s+ cr$it ceil+ 7if any7
 ( su* ,/ate = ! prec$+ cal5d> ye>1     
7ii7 ! great] (-- 7,i7 #a4jj multipli$  
by ! ,/ate population1 or  7,,ii7       
#a1ejj1jjj1 plus  7iii7 ! am\nt ( ,/ate 
h\s+ cr$it ceil+ return$ 9 ! cal5d> ye>4

  ,= purposes ( clause 7i71 ! unus$     
,/ate h\s+ cr$it ceil+ = any cal5d> ye> 
is ! excess 7if any7 ( ! sum ( ! am\nts 
describ$ 9 clauses 7ii7 7r$uc$ by !     
aggregate am\nts describ$ 9 p>agraph    
7#aj77;,a77i7 ) respect to all elections
 made = su* cal5d> ye>7 & 7iii7 ov] !   
aggregate h\s+ cr$it doll> am\nt        
allocat$ = su* ye>4 ,= purposes ( clause
 7iii71 ! am\nt ( ,/ate h\s+ cr$it ceil+
 return$ 9 ! cal5d> ye> equals ! h\s+   
cr$it doll> am\nt previ\sly allocat$ )9 
! ,/ate to any project :i* fails to meet
 ! #aj p]c5t te/ "u p>agraph            
7#a77;,e77ii7 on a date aft] ! close ( !
 cal5d> ye> 9 :i* ! allocation 0 made or
 :i* does n become a qualifi$           
middle-income h\s+ project )9 ! p]iod   
requir$ by ?is section or ! t]ms ( !    
allocation or to any project ) respect  
to :i* an allocation is cancell$ by     
mutual cons5t ( ! h\s+ cr$it ag5cy & !  
allocation recipi5t4  7,d7 ,/ate may    
provide = diff]5t allocation ,rules     
simil> to ! rules ( section #adf7;e7    

7o!r ?an p>agraph 7#b77;,b7 !re(7 %all  
apply = purposes ( ?is p>agraph4  7,e7  
,population ,= purposes ( ?is p>agraph1 
population %all be det]m9$ 9 accordance 
) section #adf7;j74  7,f7 ,co/-(-liv+   
adju/m5t  7i7 ,9 g5]al ,9 ! case ( a    
cal5d> ye> aft] #bjbd1 ! #a1ejj1jjj &   
#a4jj am\nts 9 subp>agraph 7,c7 %all ea*
 be increas$ by an am\nt equal to-- 7,i7
 su* doll> am\nt1 multipli$ by  7,,ii7 !
 co/-(-liv+ adju/m5t det]m9$ "u section 
#a7;f77#c7 = su* cal5d> ye> by sub/itut+
 cal5d> ye> #bjbc = cal5d> ye> #bjaf 9  
subp>agraph 7,a77ii7 !re(4  7ii7 ,r\nd+ 
7,i7 ,9 ! case ( ! #a1adj1jjj am\nt1 any
 increase "u clause 7i7 :i* is n a      
multiple ( #e1jjj %all be r\nd$ to !    
next l[e/ multiple ( #e1jjj4  7,,ii7 ,9 
! case ( ! #a4jj am\nt1 any increase "u 
clause 7i7 :i* is n a multiple ( #e c5ts
 %all be r\nd$ to ! next l[e/ multiple (
 #e c5ts4  7#d7 ,portion ( ,/ate ceil+  
set-aside = c]ta9 projects involv+      
qualifi$ nonpr(it organizations  7,a7 ,9
 g5]al ,n m ?an #ij p]c5t ( ! ,/ate h\s+

 cr$it ceil+ 7det]m9$ )\t reg>d to      
p>agraph 7#g77 = any ,/ate = any cal5d> 
ye> %all be allocat$ to projects o!r ?an
 qualifi$ middle-income h\s+ projects   
describ$ 9 subp>agraph 7,b74  7,b7      
,projects involv+ qualifi$ nonpr(it     
organizations ,= purposes ( subp>agraph 
7,a71 a qualifi$ middle-income h\s+     
project is describ$ 9 ?is subp>agraph if
 a qualifi$ nonpr(it organization is to 
own an int]e/ 9 ! project 7directly or  
?r\gh a p>tn]%ip7 & mat]ially p>ticipate
 7)9 ! mean+ ( section #dfi7;h77 9 !    
developm5t & op]ation ( ! project       
?r\gh\t ! cr$it p]iod4  7,c7 ,qualifi$  
nonpr(it organization ,= purposes ( ?is 
p>agraph1 ! t]m qualifi$ nonpr(it       
organization means any organization if--
 7i7 su* organization is describ$ 9     
p>agraph 7#c7 or 7#d7 ( section #eja7;c7
 & is exempt f tax "u section #eja7;a72 
7ii7 su* organization is det]m9$ by !   
,/ate h\s+ cr$it ag5cy n to be affiliat$
 ) or controll$ by a =-pr(it            
organization2 &  7iii7 "o ( ! exempt    

purposes ( su* organization includes !  
fo/]+ ( middle-income h\s+4  7,d7       
,treatm5t ( c]ta9 subsidi>ies  7i7 ,9   
g5]al ,= purposes ( ?is p>agraph1 a     
qualifi$ nonpr(it organization %all be  
treat$ z satisfy+ ! own]%ip & mat]ial   
p>ticipation te/ ( subp>agraph 7,b7 if  
any qualifi$ corporation 9 :i* su*      
organization holds /ock satisfies su*   
te/4  7ii7 ,qualifi$ corporation ,=     
purposes ( clause 7i71 ! t]m qualifi$   
corporation means any corporation if    
#ajj p]c5t ( ! /ock ( su* corporation is
 held by #a or m qualifi$ nonpr(it      
organizations at all times dur+ ! p]iod 
su* corporation is 9 exi/5ce4  7,e7     
,/ate may n ov]ride set-aside ,no?+ 9   
subp>agraph 7,e7 ( p>agraph 7#c7 %all be
 con/ru$ to p]mit a ,/ate n to comply ) 
subp>agraph 7,a7 ( ?is p>agraph4  7#e7  
,build+s eligible = cr$it only if m9imum
 long-t]m commitm5t to middle-income    
h\s+  7,a7 ,9 g5]al ,no cr$it %all be   
all[$ by reason ( ?is section ) respect 
to any build+ = ! taxable ye> unless an 

ext5d$ middle-income h\s+ commitm5t is 9
 effect z ( ! end ( su* taxable ye>4    
7,b7 ,ext5d$ middle-income h\s+         
commitm5t ,= purposes ( ?is p>agraph1 ! 
t]m ext5d$ middle-income h\s+ commitm5t 
means any agreem5t betwe5 ! taxpay] & ! 
h\s+ cr$it ag5cy-- 7i7 :i* requires t ! 
applicable fraction 7z def9$ 9          
subsection 7c77#a77 = ! build+ = ea*    
taxable ye> 9 ! ext5d$ use p]iod w n be 
less ?an ! applicable fraction specifi$ 
9 su* agreem5t & :i* prohibits ! actions
 describ$ 9 subclauses 7,i7 & 7,,ii7 (  
subp>agraph 7,e77ii71  7ii7 :i* all[s   
individuals :o meet ! income limitation 
applicable to ! build+ "u subsection 7g7
 7:e!r prospective1 pres5t1 or =m]      
occupants ( ! build+7 ! "r to en=ce 9   
any ,/ate c\rt ! requirem5t &           
prohibitions ( clause 7i71  7iii7 :i*   
prohibits ! disposition to any p]son (  
any portion ( ! build+ to :i* su*       
agreem5t applies unless all ( ! build+  
to :i* su* agreem5t applies is dispos$ (
 to su* p]son1  7iv7 :i* prohibits !    

refusal to lease to a hold] ( a v\*] or 
c]tificate ( eligibility "u section #h (
 ! ,unit$ ,/ates ,h\s+ ,act ( #aicg     
because ( ! /atus ( ! prospective t5ant 
z su* a hold]1  7v7 :i* is b9d+ on all  
successors ( ! taxpay]1 &  7vi7 :i*1 )  
respect to ! prop]ty1 is record$        
pursuant to ,/ate law z a re/rictive    
cov5ant4  7,c7 ,allocation ( cr$it may n
 exce$ am\nt necess>y to support        
commitm5t ,! h\s+ cr$it doll> am\nt     
allocat$ to any build+ may n exce$ !    
am\nt necess>y to support ! applicable  
fraction specifi$ 9 ! ext5d$            
middle-income h\s+ commitm5t = su*      
build+1 includ+ any increase 9 su*      
fraction pursuant to ! application (    
subsection 7f77#c7 if su* increase is   
reflect$ 9 an am5d$ middle-income h\s+  
commitm5t4  7,d7 ,ext5d$ use p]iod ,=   
purposes ( ?is p>agraph1 ! t]m ext5d$   
use p]iod means ! p]iod-- 7i7 beg9n+ on 
! #a/ day 9 ! cr$it p]iod on :i* su*    
build+ is "p ( a qualifi$ middle-income 
h\s+ project1 &  7ii7 end+ on ! lat] (--

 7,i7 ! date specifi$ by su* ag5cy 9 su*
 agreem5t1 or  7,,ii7 ! date :i* is #ae 
ye>s aft] ! close ( ! cr$it p]iod4  7,e7
 ,exceptions if =eclosure or if no buy] 
will+ to ma9ta9 middle-income /atus  7i7
 ,9 g5]al ,! ext5d$ use p]iod = any     
build+ %all t]m9ate on ! #fa/ day aft] !
 taxpay] 7or a successor 9 int]e/7      
provides notice to ! ,secret>y & ! h\s+ 
cr$it ag5cy t ! build+ has be5 acquir$  
by =eclosure 7or in/rum5t 9 lieu (      
=eclosure7 & t ! taxpay] int5ds !       
t]m9ation ( su* p]iod1 unless1 be=e su* 
date1 ! ,secret>y or ! h\s+ cr$it ag5cy 
det]m9es t su* acquisition is "p ( an   
arrangem5t ) ! taxpay] a purpose ( :i*  
is to t]m9ate su* p]iod4  7ii7          
,eviction1 etc41 ( exi/+ middle-income  
t5ants n p]mitt$ ,! t]m9ation ( an      
ext5d$ use p]iod "u clause 7i7 %all n be
 con/ru$ to p]mit be=e ! close ( !      
#c-ye> p]iod foll[+ su* t]m9ation-- 7,i7
 ! eviction or ! t]m9ation ( t5ancy 7o!r
 ?an = good cause7 ( an exi/+ t5ant (   
any middle-income unit1 or  7,,ii7 any  

increase 9 ! gross r5t ) respect to su* 
unit n o!rwise p]mitt$ "u ?is section4  
7,f7 ,effect ( noncompliance ,if1 dur+ a
 taxable ye>1 !re is a det]m9ation t an 
ext5d$ middle-income h\s+ agreem5t 0 n 9
 effect z ( ! beg9n+ ( su* ye>1 su*     
det]m9ation %all n apply to any p]iod   
be=e su* ye> & subp>agraph 7,a7 %all be 
appli$ )\t reg>d to su* det]m9ation if !
 failure is correct$ )9 #a ye> f ! date 
( ! det]m9ation4  7,g7 ,projects :i*    
consi/ ( m ?an #a build+ ,! application 
( ?is p>agraph to projects :i* consi/ ( 
m ?an #a build+ %all be made "u         
regulations prescrib$ by ! ,secret>y4   
7#f7 ,special rules  7,a7 ,build+ mu/ be
 locat$ )9 jurisdiction ( cr$it ag5cy ,a
 h\s+ cr$it ag5cy may allocate its      
aggregate h\s+ cr$it doll> am\nt only to
 build+s locat$ 9 ! jurisdiction ( !    
gov]nm5tal unit ( :i* su* ag5cy is a "p4
  7,b7 ,ag5cy allocations 9 excess (    
limit ,if ! aggregate h\s+ cr$it doll>  
am\nts allocat$ by a h\s+ cr$it ag5cy = 
any cal5d> ye> exce$ ! portion ( ! ,/ate

 h\s+ cr$it ceil+ allocat$ to su* ag5cy 
= su* cal5d> ye>1 ! h\s+ cr$it doll>    
am\nts s allocat$ %all be r$uc$ 7to !   
ext5t ( su* excess7 = build+s 9 ! rev]se
 ( ! ord] 9 :i* ! allocations ( su*     
am\nts 7 made4  7,c7 ,cr$it r$uc$ if    
allocat$ cr$it doll> am\nt is less ?an  
cr$it :i* w\ld be all[able )\t reg>d to 
plac$ 9 s]vice conv5tion1 etc  7i7 ,9   
g5]al ,! am\nt ( ! cr$it det]m9$ "u ?is 
section ) respect to any build+ %all n  
exce$ ! clause 7ii7 p]c5tage ( ! am\nt (
 ! cr$it :i* w\ld 7b = ?is subp>agraph7 
be det]m9$ "u ?is section ) respect to  
su* build+4  7ii7 ,det]m9ation (        
p]c5tage ,= purposes ( clause 7i71 !    
clause 7ii7 p]c5tage ) respect to any   
build+ is ! p]c5tage :i*-- 7,i7 ! h\s+  
cr$it doll> am\nt allocat$ to su*       
build+1 be>s to  7,,ii7 ! cr$it am\nt   
det]m9$ 9 accordance ) clause 7iii74    
7iii7 ,det]m9ation ( cr$it am\nt ,!     
cr$it am\nt det]m9$ 9 accordance ) ?is  
clause is ! am\nt ( ! cr$it :i* w\ld 7b 
= ?is subp>agraph7 be det]m9$ "u ?is    

section ) respect to ! build+ if-- 7,i7 
?is section 7 appli$ )\t reg>d to       
p>agraphs 7#b77;,a7 & 7#c77;,b7 (       
subsection 7f71 &  7,,ii7 subsection    
7f77#c77;,a7 7 appli$ )\t reg>d to !    
p]c5tage equal to #b_/c (4  7,d7 ,h\s+  
cr$it ag5cy to specify applicable       
p]c5tage & maximum qualifi$ basis ,9    
allocat+ a h\s+ cr$it doll> am\nt to any
 build+1 ! h\s+ cr$it ag5cy %all specify
 ! applicable p]c5tage & ! maximum      
qualifi$ basis :i* may be tak5 into     
acc\nt "u ?is section ) respect to su*  
build+4 ,! applicable p]c5tage & maximum
 qualifi$ basis s specifi$ %all n exce$ 
! applicable p]c5tage & qualifi$ basis  
det]m9$ "u ?is section )\t reg>d to ?is 
subsection4  7#g7 ,increase 9 ,/ate     
ceil+ d$icat$ to c]ta9 rural developm5t 
projects  7,a7 ,9 g5]al ,! ,/ate h\s+   
cr$it ceil+ = any cal5d> ye> %all be    
increas$ by an am\nt equal to #e p]c5t (
 ! am\nt det]m9$ "u p>agraph            
7#c77;,c77ii74  7,b7 ,use ( increas$    
am\nt  7i7 ,9 g5]al ,! am\nt ( !        

increase "u subp>agraph 7,a7 = any      
cal5d> ye> may only be allocat$ to      
build+s locat$ 9 a rural area4  7ii7    
,rural area ,= purposes ( clause 7i71 ! 
t]m rural area means any                
non-metropolitan area1 or any rural area
 z def9$ by section #ebj ( ! ,h\s+ ,act 
( #aidi1 :i* is id5tifi$ by ! qualifi$  
allocation plan "u subsection           
7l77#a77;,b74  7#h7 ,o!r def9itions ,=  
purposes ( ?is subsection-- 7,a7 ,h\s+  
cr$it ag5cy ,! t]m h\s+ cr$it ag5cy     
means any ag5cy au?oriz$ to c>ry out ?is
 subsection4  7,b7 ,possessions treat$ z
 ,/ates ,! t]m ,/ate includes a         
possession ( ! ,unit$ ,/ates4  7#i7     
,cr$it = build+s f9anc$ by tax-exempt   
bonds subject to volume cap n tak5 into 
acc\nt ,rules simil> to ! rules (       
subsections 7h77#d71 7m77#a77;,d71 &    
7m77#b77;,d7 ( section #db %all apply = 
purposes ( ?is subsection4  7#aj7       
,election to transf] ,/ate h\s+ cr$it   
ceil+ = allocations to l[-income build+s
  7,a7 ,9 g5]al ,if a ,/ate h\s+ cr$it  

ag5cy makes an election "u ?is p>agraph 
) respect to a cal5d> ye>-- 7i7 ! ,/ate 
h\s+ cr$it ceil+ = su* cal5d> ye> "u    
p>agraph 7#c7 7det]m9$ be=e application 
( p>agraph 7#g77 %all be r$uc$ by !     
am\nt specifi$ 9 su* election1  7ii7 !  
am\nt det]m9$ "u p>agraph 7#g7 = su*    
cal5d> ye> %all be r$uc$ by ! am\nt     
specifi$ 9 su* election1 &  7iii7 !     
am\nt det]m9$ "u section                
#db7;h77#c77;,c77ii7 = su* cal5d> ye>   
%all be increas$ by ! sum ( ! am\nts    
specifi$ 9 clauses 7i7 & 7ii71 except t 
any am\nt specifi$ "u clause 7ii7-- 7,i7
 may only be allocat$ "u su* section to 
qualifi$ l[-income build+s 7z def9$ 9   
section #db7 locat$ 9 a rural area 7z   
def9$ 9 p>agraph 7#g71 &  7,,ii7 %all n 
be tak5 into acc\nt = purposes ( det]m9+
 ! unus$ h\s+ cr$it ceil+ "u ! second   
s5t5ce ( section #db7;h77#c77;,c74  7,b7
 ,"t & mann] = mak+ election  7i7 ,9    
g5]al ,an election "u ?is p>agraph--    
7,i7 %all be made be=e ! end ( ! cal5d> 
ye> ) respect to :i* su* election       

applies1  7,,ii7 %all be made 9 su*     
mann] z specifi$ by ! ,secret>y1 &      
7,,iii7 %all sep>ately specify ! am\nt (
 r$uctions to be made "u p>agraph 7#c7 &
 p>agraph 7#g74  7ii7 ,frequ5cy ,a ,/ate
 h\s+ cr$it ag5cy may make m ?an "o     
election "u ?is section ) respect to any
 cal5d> ye>1 & any su* election1 once   
made1 %all be revocable only if su*     
revocation is made be=e ! end ( ! cal5d>
 ye> ) respect to :i* su* election is   
made4  7,c7 ,limitation ,! aggregate    
am\nt specifi$ 9 elections "u ?is       
p>agraph ) respect to any ,/ate h\s+    
cr$it ag5cy = cal5d> ye> %all n exce$ ! 
sum (-- 7i7 ! am\nt det]m9$ "u p>agraph 
7#c77;,c77ii7 = su* cal5d> ye>1 plus    
7ii7 ! am\nt det]m9$ "u p>agraph 7#g7 = 
su* cal5d> ye>4  7i7 ,def9itions &      
special rules ,= purposes ( ?is         
section-- 7#a7 ,middle-income unit  7,a7
 ,9 g5]al ,! t]m middle-income unit     
means any unit 9 a build+ if-- 7i7 su*  
unit is r5t-re/rict$ 7z def9$ 9         
subsection 7g77#b771 &  7ii7 !          

individuals occupy+ su* unit meet !     
income limitation applicable "u         
subsection 7g77#a7 to ! project ( :i*   
su* build+ is a "p4  7,b7 ,exceptions   
7i7 ,exclusion ( l[-income units ,a unit
 %all n be treat$ z a middle-income unit
 if su* unit is a l[-income unit 7z     
def9$ "u section #db7;i77#c774  7ii7    
,unit mu/ be suitable = p]man5t         
occupancy  7,i7 ,9 g5]al ,a unit %all n 
be treat$ z a middle-income unit unless 
! unit is suitable = occupancy & us$ o!r
 ?an on a transi5t basis4  7,,ii7       
,suitability = occupancy ,= purposes (  
subclause 7,i71 ! suitability ( a unit =
 occupancy %all be det]m9$ "u           
regulations prescrib$ by ! ,secret>y    
tak+ into acc\nt local heal?1 safety1 & 
build+ codes4  7,,iii7 ,s+le-room       
occupancy units ,= purposes ( subclause 
7,i71 a s+le-room occupancy unit %all n 
be treat$ z us$ on a transi5t basis     
m]ely because x is r5t$ on a            
mon?-by-mon? basis4  7,c7 ,special rule 
= build+s hav+ #d or few] units ,9 !    

case ( any build+ :i* has #d or few]    
resid5tial r5tal units1 no unit 9 su*   
build+ %all be treat$ z a middle-income 
unit if ! units 9 su* build+ are own$   
by-- 7i7 any individual :o occupies a   
resid5tial unit 9 su* build+1 or  7ii7  
any p]son :o is relat$ 7z def9$ 9       
subsection 7d77#b77;,d77ii77 to su*     
individual4  7,d7 ,rules relat+ to      
/ud5ts  7i7 ,9 g5]al ,a unit occupi$    
solely by individuals :o-- 7,i7 h n     
atta9$ age #bd1 &  7,,ii7 are enroll$ 9 
a full-"t c\rse ( /udy at an in/itution 
( high] education 7z def9$ 9 section    
#ccjd7;f771  %all n be treat$ z a       
middle-income unit4  7ii7 ,exception =  
c]ta9 f$]al programs ,9 ! case ( a      
f$]ally assi/$ build+ 7z def9$ 9        
subsection 7d77#f77;,c77i7 ( section    
#db71 clause 7i7 %all n apply to a unit 
all ( ! occupants ( :i* meet all        
applicable requirem5ts "u ! h\s+ program
 describ$ 9 su* subsection ?r\gh :i* !  
build+ is assi/$1 f9anc$1 or op]at$4    
7iii7 ,o!r exceptions ,clause 7i7 %all n

 apply to a unit occupi$ by an          
individual :o-- 7,i7 is m>ri$1 if su*   
individual's sp\se also occupies ! unit1
  7,,ii7 is a p]son ) disabilities 7z   
def9$ 9 section #c7;b77#c77;,e7 ( !     
,unit$ ,/ates ,h\s+ ,act ( #aicg71      
7,,iii7 is a vet]an 7z def9$ 9 section  
#aja7b7 ( title #ch1 ,unit$ ,/ates      
,code71  7,,iv7 has "o or m qualify+    
*ildr5 7z def9$ 9 section #aeb7;c771 if 
su* *ildr5 also occupy ! unit1 !        
individual is n a dep5d5t 7z def9$ 9    
section #aeb1 det]m9$ )\t reg>d to      
subsections 7b77#a71 7b77#b71 &         
7d77#a77;,b7 !re(7 ( ano!r individual1 &
 su* *ildr5 are n claim$ z dep5d5ts 7z s
 def9$7 ( ano!r individual1 or  7,v7 is1
 or 0 imm$iately prior to atta9+ ! age (
 majority-- 7aa7 an emancipat$ m9or or 9
 legal gu>dian%ip z det]m9$ by a c\rt ( 
compet5t jurisdiction 9 ! individual's  
,/ate ( legal resid5ce1  7bb7 "u ! c>e &
 placem5t responsibility ( ! ,/ate ag5cy
 responsible = adm9i/]+ a plan "u "p ,b 
or "p ,e ( title ,,iv ( ! ,social       

,security ,act1 or  7cc7 0 an           
unaccompani$ y\? 7)9 ! mean+ ( section  
#gbe7f7 ( ! ,mc,kinney-,v5to ,homeless  
,assi/ance ,act 7#db ,u4,s4,c4          
#aadcd;a7#f777 or a homeless *ild or y\?
 7)9 ! mean+ ( section #gbe7b7 ( su*    
,act 7#db ,u4,s4,c4 #aadcd;a7#b7774     
7,e7 ,own]-occupi$ build+s hav+ #d or   
few] units eligible = cr$it :]e         
developm5t plan  7i7 ,9 g5]al           
,subp>agraph 7,c7 %all n apply to !     
acquisition or rehabilitation ( a build+
 pursuant to a developm5t plan ( action 
sponsor$ by a ,/ate or local gov]nm5t or
 a qualifi$ nonpr(it organization4  7ii7
 ,limitation on cr$it ,9 ! case ( a     
build+ to :i* clause 7i7 applies1 !     
applicable fraction %all n exce$ #hj    
p]c5t ( ! unit fraction4  7iii7 ,c]ta9  
unr5t$ units treat$ z own]-occupi$ ,9 ! 
case ( a build+ to :i* clause 7i7       
applies1 any unit :i* is n r5t$ = #ij   
days or m %all be treat$ z occupi$ by ! 
own] ( ! build+ z ( ! #a/ day x is n    
r5t$4  7#b7 ,new build+ ,! t]m new      

build+ means a build+ ! orig9al use (   
:i* beg9s ) ! taxpay]4  7#c7 ,exi/+     
build+ ,! t]m exi/+ build+ means any    
build+ :i* is n a new build+4  7#d7     
,application to e/ates & tru/s ,9 ! case
 ( an e/ate or tru/1 ! am\nt ( ! cr$it  
det]m9$ "u subsection 7a7 %all be       
apportion$ betwe5 ! e/ate or tru/ & !   
b5efici>ies on ! basis ( ! income ( !   
e/ate or tru/ allocable to ea*4  7#e7   
,impact ( t5ant's option to acquire     
prop]ty  7,a7 ,9 g5]al ,no ,f$]al income
 tax b5efit %all fail to be all[able to 
! taxpay] ) respect to any qualifi$     
middle-income build+ m]ely by reason (  
an option held by ! t5ants 79 coop]ative
 =m or o!rwise7 or resid5t managem5t    
corporation ( su* build+ or by a        
qualifi$ nonpr(it organization or       
gov]nm5t ag5cy to pur*ase ! prop]ty or  
all ( ! p>tn]%ip int]e/s 7o!r ?an       
int]e/s ( ! p]son ex]cis+ su* option or 
a relat$ p>ty !reto 7)9 ! mean+ (       
section #bfg7;b7 or #gjg7;b77#a777      
relat+ to ! prop]ty aft] ! close ( !    

cr$it p]iod = a price :i* is n less ?an 
! m9imum pur*ase price det]m9$ "u       
subp>agraph 7,b74  7,b7 ,m9imum pur*ase 
price ,= purposes ( subp>agraph 7,a71 ! 
m9imum pur*ase price "u ?is subp>agraph 
is an am\nt equal to ! pr9cipal am\nt ( 
out/&+ indebt$ness secur$ by ! build+   
7o!r ?an indebt$ness incurr$ )9 ! #e-ye>
 p]iod end+ on ! date ( ! sale to !     
t5ants74 ,9 ! case ( a pur*ase ( a      
p>tn]%ip int]e/1 ! m9imum pur*ase price 
is an am\nt equal to su* int]e/'s       
ratable %>e ( ! am\nt det]m9$ "u !      
prec$+ s5t5ce4  7#f7 ,treatm5t ( rural  
projects ,= purposes ( ?is section1 9 ! 
case ( any project = resid5tial r5tal   
prop]ty locat$ 9 a rural area 7z def9$ 9
 section #ebj ( ! ,h\s+ ,act ( #aidi71  
any income limitation measur$ by ref]5ce
 to area m$ian gross income %all be     
measur$ by ref]5ce to ! great] ( area   
m$ian gross income or national          
non-metropolitan m$ian income4  7#g7    
,det]m9ation ( :e!r build+ is ,f$]ally  
subsidiz$  7,a7 ,9 g5]al ,except z      

o!rwise provid$ 9 ?is p>agraph1 =       
purposes ( ?is section1 a project %all  
be treat$ z f$]ally subsidiz$ = any     
taxable ye> if1 at any "t dur+ su*      
taxable ye> or any prior taxable ye>1   
!re is or 0 out/&+ any obligation !     
int]e/ on :i* is exempt f tax "u section
 #ajc ! proce$s ( :i* are or 7 us$      
7directly or indirectly7 ) respect to   
su* project or ! op]ation !re(4  7,b7   
,special rule = subsidiz$ con/ruction   
f9anc+ ,subp>agraph 7,a7 %all n apply to
 any tax-exempt obligation us$ to       
provide con/ruction f9anc+ = any build+ 
if-- 7i7 su* obligation 7:5 issu$7      
id5tifi$ ! build+ = :i* ! proce$s ( su* 
obligation w\ld be us$1 &  7ii7 su*     
obligation is r$eem$ be=e su* build+ is 
plac$ 9 s]vice4  7#h7 ,r$uction 9 basis 
,9 ! case ( any build+ = :i* a cr$it is 
all[able "u ?is section & section #db1 !
 basis ( ! build+ %all be r$uc$ by !    
am\nt ( su* cr$it all[$ "u subsection   
7a74  7j7 ,application ( at-,risk rules 
,= purposes ( ?is section-- 7#a7 ,9     

g5]al ,except z o!rwise provid$ 9 ?is   
subsection1 rules simil> to ! rules (   
section #di7;a77#a7 7o!r ?an            
subp>agraphs 7,d77ii77,,ii7 &           
7,d77iv77,i7 !re(71 section #di7;a77#b71
 & section #di7;b77#a7 %all apply 9     
det]m9+ ! qualifi$ basis ( any build+ 9 
! same mann] z su* sections apply 9     
det]m9+ ! cr$it base ( prop]ty4  7#b7   
,special rules = det]m9+ qualifi$ p]son 
,= purposes ( p>agraph 7#a7-- 7,a7 ,9   
g5]al ,if ! requirem5ts ( subp>agraphs  
7,b71 7,c71 & 7,d7 are met ) respect to 
any f9anc+ borr[$ f a qualifi$ nonpr(it 
organization1 ! det]m9ation ( :e!r su*  
f9anc+ is qualifi$ comm]cial f9anc+ )   
respect to any qualifi$ middle-income   
build+ %all be made )\t reg>d to :e!r   
su* organization-- 7i7 is actively &    
regul>ly engag$ 9 ! bus9ess ( l5d+      
money1 or  7ii7 is a p]son describ$ 9   
section #di7;a77#a77;,d77iv77,,ii74     
7,b7 ,f9anc+ secur$ by prop]ty ,!       
requirem5ts ( ?is subp>agraph are met ) 
respect to any f9anc+ if su* f9anc+ is  

secur$ by ! qualifi$ middle-income      
build+1 except t ?is subp>agraph %all n 
apply 9 ! case ( a f$]ally assi/$ build+
 describ$ 9 section #db7;d77#f77;,c7    
if-- 7i7 a security int]e/ 9 su* build+ 
is n p]mitt$ by a ,f$]al ag5cy hold+ or 
insur+ ! mortgage secur$ by su* build+1 
&  7ii7 ! proce$s f ! f9anc+ 7if any7   
are appli$ to acquire or improve su*    
build+4  7,c7 ,portion ( build+         
attributable to f9anc+ ,! requirem5ts ( 
?is subp>agraph are met ) respect to any
 f9anc+ = any taxable ye> 9 ! cr$it     
p]iod if1 z ( ! close ( su* taxable ye>1
 n m ?an #fj p]c5t ( ! eligible basis ( 
! qualifi$ middle-income build+ is      
attributable to su* f9anc+ 7r$uc$ by !  
pr9cipal & int]e/ ( any gov]nm5tal      
f9anc+ :i* is "p ( a wrap-ar\nd mortgage
 involv+ su* f9anc+74  7,d7 ,repaym5t ( 
pr9cipal & int]e/ ,! requirem5ts ( ?is  
subp>agraph are met ) respect to any    
f9anc+ if su* f9anc+ is fully repaid on 
or be=e ! e>lie/ (-- 7i7 ! date on :i*  
su* f9anc+ matures1  7ii7 ! #ij? day    

aft] ! close ( ! cr$it p]iod ) respect  
to ! qualifi$ middle-income build+1 or  
7iii7 ! date ( its ref9anc+ or ! sale ( 
! build+ to :i* su* f9anc+ relates4  ,9 
! case ( a qualifi$ nonpr(it            
organization :i* is n describ$ 9 section
 #di7;a77#a77;,d77iv77,,ii7 ) respect to
 a build+1 clause 7ii7 ( ?is subp>agraph
 %all be appli$ z if ! date describ$    
!re9 7 ! #ij? day aft] ! e>li] ( ! date 
! build+ ceases to be a qualifi$        
middle-income build+ or ! date :i* is   
#ae ye>s aft] ! close ( a cr$it p]iod ) 
respect !reto4  7#c7 ,pres5t value (    
f9anc+ ,if ! rate ( int]e/ on any f9anc+
 describ$ 9 p>agraph 7#b77;,a7 is less  
?an ! rate :i* is #a p]c5tage po9t bel[ 
! applicable ,f$]al rate z ( ! "t su*   
f9anc+ is incurr$1 !n ! qualifi$ basis  
7to :i* su* f9anc+ relates7 ( ! qualifi$
 middle-income build+ %all be ! pres5t  
value ( ! am\nt ( su* f9anc+1 us+ z !   
disc\nt rate su* applicable ,f$]al rate4
 ,= purposes ( ! prec$+ s5t5ce1 ! rate (
 int]e/ on any f9anc+ %all be det]m9$ by

 treat+ int]e/ to ! ext5t ( gov]nm5t    
subsidies z n payable4  7#d7 ,failure to
 fully repay  7,a7 ,9 g5]al ,to ! ext5t 
t ! requirem5ts ( p>agraph 7#b77;,d7 are
 n met1 !n ! taxpay]'s tax "u ?is *apt] 
= ! taxable ye> 9 :i* su* failure occurs
 %all be increas$ by an am\nt equal to !
 applicable portion ( ! cr$it "u ?is    
section ) respect to su* build+1        
increas$ by an am\nt ( int]e/ = !       
p]iod-- 7i7 beg9n+ ) ! due date = ! fil+
 ( ! return ( tax impos$ by *apt] #a = !
 #a/ taxable ye> = :i* su* cr$it 0      
all[able1 &  7ii7 end+ ) ! due date = ! 
taxable ye> 9 :i* su* failure occurs1   
det]m9$ by us+ ! und]paym5t rate & me?od
 "u section #ffba4  7,b7 ,applicable    
portion ,= purposes ( subp>agraph 7,a71 
! t]m applicable portion means !        
aggregate decrease 9 ! cr$its all[$ to a
 taxpay] "u section #ch = all prior     
taxable ye>s :i* w\ld h result$ if !    
eligible basis ( ! build+ 7 r$uc$ by !  
am\nt ( f9anc+ :i* does n meet          
requirem5ts ( p>agraph 7#b77;,d74  7,c7 

,c]ta9 rules to apply ,rules simil> to !
 rules ( subp>agraphs 7,a7 & 7,d7 (     
section #db7;j77#d7 %all apply =        
purposes ( ?is subsection4  7k7         
,c]tifications & o!r reports to         
,secret>y  7#a7 ,c]tification ) respect 
to #a/ ye> ( cr$it p]iod ,foll[+ ! close
 ( ! #a/ taxable ye> 9 ! cr$it p]iod )  
respect to any qualifi$ middle-income   
build+1 ! taxpay] %all c]tify to !      
,secret>y 7at su* "t & 9 su* =m & 9 su* 
mann] z ! ,secret>y prescribes7-- 7,a7 !
 taxable ye>1 & cal5d> ye>1 9 :i* su*   
build+ 0 plac$ 9 s]vice1  7,b7 ! adju/$ 
basis & eligible basis ( su* build+ z ( 
! close ( ! #a/ ye> ( ! cr$it p]iod1    
7,c7 ! maximum applicable p]c5tage &    
qualifi$ basis p]mitt$ to be tak5 into  
acc\nt by ! appropriate h\s+ cr$it ag5cy
 "u subsection 7h71 &  7,d7 su* o!r     
in=mation z ! ,secret>y may require4  ,9
 ! case ( a failure to make !           
c]tification requir$ by ! prec$+ s5t5ce 
on ! date prescrib$ !re=1 unless x is   
%[n t su* failure is due to reasonable  

cause & n to willful neglect1 no cr$it  
%all be all[able by reason ( subsection 
7a7 ) respect to su* build+ = any       
taxable ye> end+ be=e su* c]tification  
is made4  7#b7 ,annual reports to !     
,secret>y ,! ,secret>y may require      
taxpay]s to submit an in=mation return  
7at su* "t & 9 su* =m & mann] z !       
,secret>y prescribes7 = ea* taxable ye> 
sett+ =?-- 7,a7 ! qualifi$ basis = !    
taxable ye> ( ea* qualifi$ middle-income
 build+ ( ! taxpay]1  7,b7 ! in=mation  
describ$ 9 p>agraph 7#a77;,c7 = !       
taxable ye>1 &  7,c7 su* o!r in=mation z
 ! ,secret>y may require4  ,! p5alty "u 
section #ffeb7;j7 %all apply to any     
failure to submit ! return requir$ by ! 
,secret>y "u ! prec$+ s5t5ce on ! date  
prescrib$ !re=4  7#c7 ,annual reports f 
h\s+ cr$it ag5cies ,ea* ag5cy :i*       
allocates any h\s+ cr$it am\nt to any   
build+ = any cal5d> ye> %all submit to !
 ,secret>y 7at su* "t & 9 su* mann] z ! 
,secret>y %all prescribe7 an annual     
report specify+-- 7,a7 ! am\nt ( h\s+   

cr$it am\nt allocat$ to ea* build+ = su*
 ye>1  7,b7 suffici5t in=mation to      
id5tify ea* su* build+ & ! taxpay] )    
respect !reto1 &  7,c7 su* o!r in=mation
 z ! ,secret>y may require4  ,! p5alty  
"u section #ffeb7;j7 %all apply to any  
failure to submit ! report requir$ by ! 
prec$+ s5t5ce on ! date prescrib$ !re=4 
7l7 ,responsibilities ( h\s+ cr$it      
ag5cies  7#a7 ,plans = allocation (     
cr$it among projects  7,a7 ,9 g5]al     
,not)/&+ any o!r provision ( ?is        
section1 ! h\s+ cr$it doll> am\nt )     
respect to any build+ %all be z]o       
unless-- 7i7 su* am\nt 0 allocat$       
pursuant to a qualifi$ allocation plan (
 ! h\s+ cr$it ag5cy :i* is approv$ by ! 
gov]nm5tal unit 79 accordance ) rules   
simil> to ! rules ( section #db7m77#a77 
( :i* su* ag5cy is a "p1  7ii7 a        
compreh5sive m>ket /udy ( ! h\s+ ne$s ( 
middle-income individuals 9 ! area to be
 s]v$ by ! project is conduct$ be=e !   
cr$it allocation is made & at !         
develop]'s exp5se by a dis9t]e/$ p>ty :o

 is approv$ by su* ag5cy1 &  7iii7 a    
writt5 explanation is available to !    
g5]al public = any allocation ( a h\s+  
cr$it doll> am\nt :i* is n made 9       
accordance ) e/abli%$ priorities &      
selection crit]ia ( ! h\s+ cr$it ag5cy4 
7,b7 ,qualifi$ allocation plan ,=       
purposes ( ?is p>agraph1 ! t]m qualifi$ 
allocation plan means any plan-- 7i7 :i*
 sets =? selection crit]ia to be us$ to 
det]m9e h\s+ priorities ( ! h\s+ cr$it  
ag5cy :i* are appropriate to local      
conditions1  7ii7 :i* also gives        
pref]5ce 9 allocat+ h\s+ cr$it doll>    
am\nts among select$ projects to-- 7,i7 
projects obligat$ to s]ve qualifi$      
t5ants = ! longe/ p]iods1  7,,ii7       
projects 9 areas ) insuffici5t supply ( 
h\s+ af=dable to m$ian income h\seholds1
  7,,iii7 projects :i* t>get h\s+ to    
t5ants at a range ( incomes betwe5 #fj &
 #ajj p]c5t ( area m$ian gross income1 &
  7,,iv7 projects locat$ ne> transit    
hubs1 &  7iii7 :i* provides a proc$ure t
 ! ag5cy 7or an ag5t or o!r private     

contractor ( su* ag5cy7 w foll[ 9       
monitor+ = noncompliance ) ! provisions 
( ?is section & 9 notify+ ! ,int]nal    
,rev5ue ,s]vice ( su* noncompliance :i* 
su* ag5cy becomes aw>e ( & 9 monitor+ = 
noncompliance ) habitability /&>ds ?r\gh
 regul> site visits4  7,c7 ,c]ta9       
selection crit]ia mu/ be us$ ,!         
selection crit]ia set =? 9 a qualifi$   
allocation plan mu/ include-- 7i7       
project location1  7ii7 h\s+ ne$s       
*>act]i/ics1  7iii7 project *>act]i/ics1
 includ+ :e!r ! project includes ! use (
 exi/+ h\s+ z "p ( a community          
revitalization plan1  7iv7 sponsor      
*>act]i/ics1  7v7 t5ant populations )   
special h\s+ ne$s1  7vi7 t5ant          
populations ( individuals ) *ildr51     
7vii7 projects int5d$ = ev5tual t5ant   
own]%ip1  7viii7 ! en]gy effici5cy ( !  
project1 &  7ix7 ! hi/oric nature ( !   
project4  7,d7 ,c]ta9 selection crit]ia 
prohibit$ ,! selection crit]ia set =? 9 
a qualifi$ allocation plan %all n       
include a requirem5t ( local approval or

 local contributions1 ei!r z a ?re%old  
qualification requirem5t or z "p ( a    
po9t sy/em to be consid]$ = allocations 
( h\s+ cr$it doll> am\nt4  7#b7 ,cr$it  
allocat$ to build+ n to exce$ am\nt     
necess>y to assure project feasibility  
7,a7 ,9 g5]al ,! h\s+ cr$it doll> am\nt 
allocat$ to a project %all n exce$ !    
am\nt ! h\s+ cr$it ag5cy det]m9es is    
necess>y = ! f9ancial feasibility ( !   
project & its viability z a qualifi$    
middle-income h\s+ project ?r\gh\t !    
cr$it p]iod4  7,b7 ,ag5cy evaluation ,9 
mak+ ! det]m9ation "u subp>agraph 7,a71 
! h\s+ cr$it ag5cy %all consid]-- 7i7 ! 
s\rces & uses ( funds & ! total f9anc+  
plann$ = ! project1  7ii7 any proce$s or
 receipts expect$ to be g5]at$ by reason
 ( tax b5efits1  7iii7 ! p]c5tage ( !   
h\s+ cr$it doll> am\nt us$ = project    
co/s o!r ?an ! co/ ( int]m$i>ies1 &     
7iv7 ! reasonabl5ess ( ! developm5tal & 
op]ational co/s ( ! project4  ,clause   
7iii7 %all n be appli$ s z to imp$e !   
developm5t ( projects 9 h>d-to-develop  

areas4 ,su* a det]m9ation %all n be     
con/ru$ to be a repres5tation or w>ranty
 z to ! feasibility or viability ( !    
project4  7,c7 ,det]m9ation made :5     
cr$it am\nt appli$ = & :5 build+ plac$ 9
 s]vice  7i7 ,9 g5]al ,a det]m9ation "u 
subp>agraph 7,a7 %all be made z ( ea* ( 
! foll[+ times3 7,i7 ,! application = ! 
h\s+ cr$it doll> am\nt4  7,,ii7 ,!      
allocation ( ! h\s+ cr$it doll> am\nt4  
7,,iii7 ,! date ! build+ is plac$ 9     
s]vice4  7ii7 ,c]tification z to am\nt (
 o!r subsidies ,prior to ea* det]m9ation
 "u clause 7i71 ! taxpay] %all c]tify to
 ! h\s+ cr$it ag5cy ! full ext5t ( all  
,f$]al1 ,/ate1 & local subsidies :i*    
apply 7or :i* ! taxpay] expects to      
apply7 ) respect to ! build+4  7m7      
,regulations ,! ,secret>y %all prescribe
 su* regulations z may be necess>y or   
appropriate to c>ry out ! purposes ( ?is
 section1 includ+-- 7#a7 regulations    
deal+ )-- 7,a7 projects :i* include m   
?an #a build+ or only a portion ( a     
build+1 or  7,b7 build+s :i* are plac$ 9

 s]vice 9 portions1  7#b7 regulations   
provid+ = ! application ( ?is section to
 %ort taxable ye>s1  7#c7 regulations   
prev5t+ ! avoidance ( ! rules ( ?is     
section1  7#d7 regulations provid+ !    
opportunity = h\s+ cr$it ag5cies to     
correct adm9i/rative errors & omissions 
) respect to allocations & record keep+ 
)9 a reasonable p]iod aft] _! discov]y1 
tak+ into acc\nt ! availability (       
regulations & o!r adm9i/rative guidance 
f ! ,secret>y1 &  7#e7 9 consultation ) 
! ,secret>y ( ,h\s+ & ,urban            
,developm5t1 regulations or guidance to 
promote uni=m def9itions & to /reaml9e  
requirem5ts = ) respect to qualifi$     
middle-income build+s :i* receive fund+ 
f programs adm9i/rat$ by ! ,dep>tm5t (  
,h\s+ & ,urban ,developm5t1 includ+     
programs au?oriz$ by ,native ,am]ican   
,h\s+ ,assi/ance & ,self-,det]m9ation   
,act ( #aiif 4  4  7b7 ,treatm5t z "p ( 
g5]al bus9ess cr$it ,section #ch7;b7 ( !
 ,int]nal ,rev5ue ,code ( #aihf is am5d$
 by /rik+ plus at ! end ( p>agraph      

7#dj71 by /rik+ ! p]iod at ! end (      
p>agraph 7#da7 & ins]t+ 1 plus1 & by    
add+ at ! end ! foll[+ new p>agraph3    
7#db7 ! middle-income h\s+ cr$it det]m9$
 "u section #db;,a7a74  4  7c7 ,r$uction
 9 basis ,section #ajaf7;a7 ( ! ,int]nal
 ,rev5ue ,code ( #aihf is am5d$-- 7#a7  
by /rik+ & at ! end ( p>agraph 7#cg72   
7#b7 by r$esignat+ p>agraph 7#ch7 z     
p>agraph 7#ci72 &  7#c7 by ins]t+ aft]  
p>agraph 7#cg7 ! foll[+ new p>agraph3   
7#ch7 to ! ext5t provid$ 9 section      
#db;,a7i77#h71 &  4  7d7 ,treatm5t "u   
base erosion m9imum tax ,section        
#ei;,a7b77#d7 ( he ,int]nal ,rev5ue     
,code ( #aihf is am5d$ by r$esignat+    
subp>agraphs 7,b7 & 7,c7 z subp>agraphs 
7,c7 & 7,d71 respectively1 & by ins]t+  
aft] subp>agraphs 7,a7 ! foll[+ new     
subp>agraph3  7,b7 ! middle-income h\s+ 
cr$it det]m9$ "u section #db;,a7a71  4  
7e7 ,con=m+ am5dm5ts relat+ to          
l[-,income h\s+ tax cr$it ,section      
#db7n7 ( ! ,int]nal ,rev5ue ,code (     
#aihf is am5d$-- 7#a7 by /rik+          

regulations 9 ! matt] prec$+ p>agraph   
7#a71  7#b7 by ins]t+ regulations be=e  
deal+ ) 9 p>agraph 7#a71  7#c7 by ins]t+
 regulations be=e provid+ 9 p>agraphs   
7#b7 & 7#d71  7#d7 by ins]t+ regulations
 be=e prev5t+ 9 p>agraph 7#c71  7#e7 by 
/rik+ &at ! end ( p>agraph 7#c71  7#f7  
by /rik+ ! p]iod at ! end ( p>agraph    
7#d7 & ins]t+ 1 &1 &  7#g7 by add+ at ! 
end ! foll[+ new p>agraph3  7#e7 9      
consultation ) ! ,secret>y ( ,h\s+ &    
,urban ,developm5t1 regulations or      
guidance to promote uni=m def9itions &  
to /reaml9e requirem5ts = ) respect to  
qualifi$ l[-income build+s :i* receive  
fund+ f programs adm9i/rat$ by !        
,dep>tm5t ( ,h\s+ & ,urban ,developm5t1 
includ+ programs au?oriz$ by ,native    
,am]ican ,h\s+ ,assi/ance &             
,self-,det]m9ation ,act ( #aiif4  4  7f7
 ,con=m+ am5dm5ts  7#a7 ,section        
#de,l7e7 ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by ins]t+ or #db;,a aft] 
#db4  7#b7 ,section #ej7;c77#c77;,c7 (  
su* ,code is am5d$ by ins]t+ or #db;,a  

aft] #db4  7#c7 ,section #ee7;c77#a7 (  
su* ,code is am5d$ by ins]t+ #db;,a7j71 
be=e #de7;e77#aa77;,c74  7#d7           
,subsections 7i77#c77;,c71              
7i77#f77;,b77i71 & 7k77#a7 ( section    
#dfi ( su* ,code are ea* am5d$ by ins]t+
 or #db;,a aft] #db4  7#e7 ,! table (   
sections = subp>t ,d ( "p ,,iv (        
sub*apt] ,a ( *apt] #a ( su* ,code is   
am5d$ by ins]t+ aft] ! item relat+ to   
section #db ! foll[+ new item3  ,sec4   
#db;,a4 ,middle-income h\s+ cr$it4  4   
7g7 ,effective date ,! am5dm5ts made by 
?is section %all apply to build+s plac$ 
9 s]vice aft] ,decemb] #ca1 #bjbc1 9    
taxable ye>s end+ aft] su* date4