,i #aaith ,,congress #ast ,session ,h4 ,r4 #hic ,,in ,,the ,,house ,,of ,,representatives ,january #ca1 #bjbe,mr4 ,ryan introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committees on ,energy and ,commerce1 and ,transportation and ,infrastructure1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a credit for working families housing development1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,working ,families ,housing ,tax ,credit ,act4 #b4 ,sense of ,congress relating to the working families housing tax credit ,it is the sense of ,congress that-- 7#a7 the working family housing tax credit under section #db;,a of the ,internal ,revenue ,code of #aihf is a critically important ,federal ,government policy tool to encourage the production of quality housing for our teachers1 firefighters1 police officers1 veterans1 and all hard-working ,americans2 and 7#b7 ,congress should further improve and enhance the working families housing tax credit by passing pro-housing legislation4 #c4 ,working families housing tax credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #db the following new section3 #db;,a4 ,working families housing credit 7a7 ,in general ,for purposes of section #ch1 the amount of the working families housing credit determined under this section for any taxable year in the credit period shall be an amount equal to-- 7#a7 the applicable percentage1 of 7#b7 the qualified basis of each qualified working families building4 7b7 ,applicable percentage 7#a7 ,determination of applicable percentage ,for purposes of this section-- 7,a7 ,in general ,the term applicable percentage means1 with respect to any building1 the appropriate percentage prescribed by the ,secretary for the earlier of-- 7i7 the month in which such building is placed in service1 or 7ii7 at the election of the taxpayer1 the month in which the taxpayer and the housing credit agency enter into an agreement with respect to such building 7which is binding on such agency1 the taxpayer1 and all successors in interest7 as to the housing credit dollar amount to be allocated to such building4 ,a month may be elected under clause 7ii7 only if the election is made not later than the #eth day after the close of such month4 ,such an election1 once made1 shall be irrevocable4 7,b7 ,method of prescribing percentages ,the percentages prescribed by the ,secretary for any month shall be percentages which will yield over a #ae-year period amounts of credit under subsection 7a7 which have a present value equal to-- 7i7 #ej percent of the qualified basis of a new building1 and 7ii7 #fj percent of the qualified basis of a building not described in clause 7i74 7,c7 ,method of discounting ,the present value under subparagraph 7,b7 shall be determined-- 7i7 as of the last day of the #ast year of the #ae-year period referred to in subparagraph 7,b71 7ii7 by using a discount rate equal to #gb percent of the average of the annual ,federal mid-term rate and the annual ,federal long-term rate applicable under section #abgd7;d77#a7 to the month applicable under clause 7i7 or 7ii7 of subparagraph 7,a7 and compounded annually1 and 7iii7 by assuming that the credit allowable under this section for any year is received on the last day of such year4 7#b7 ,minimum credit rate 7,a7 ,in general ,the applicable percentage for any building which is not ,federally subsidized for the taxable year shall not be less than #e percent4 7,b7 ,minimum credit rate for ,federally subsidized buildings ,in the case of any building to which subparagraph 7,a7 does not apply1 except as provided in paragraph 7#c71 the applicable percentage shall not be less than #b percent4 7#c7 ,exception for certain ,federally subsidized buildings ,in the case of any building to which paragraph 7#b77;,a7 does not apply1 the applicable percentage is zero unless-- 7,a7 a credit is allowed under section #db with respect to such building for the taxable year1 and 7,b7 such building is financed by tax-exempt bonds as described in section #db7;h77#d74 7#d7 ,cross references 7,a7 ,for treatment of certain rehabilitation expenditures as separate new buildings1 see subsection 7e74 7,b7 ,for determination of applicable percentage for increases in qualified basis after the #ast year of the credit period1 see subsection 7f77#c74 7,c7 ,for authority of housing credit agency to limit applicable percentage and qualified basis which may be taken into account under this section with respect to any building1 see subsection 7h77#f74 7c7 ,qualified basis2 qualified working families building ,for purposes of this section-- 7#a7 ,qualified basis 7,a7 ,determination ,the qualified basis of any qualified working families building for any taxable year is an amount equal to-- 7i7 the applicable fraction 7determined as of the close of such taxable year7 of 7ii7 the eligible basis of such building 7determined under subsection 7d774 7,b7 ,applicable fraction ,for purposes of subparagraph 7,a71 the term applicable fraction means the smaller of the unit fraction or the floor space fraction4 7,c7 ,unit fraction ,for purposes of subparagraph 7,b71 the term unit fraction means the fraction-- 7i7 the numerator of which is the number of working families units in the building1 and 7ii7 the denominator of which is the number of residential rental units 7whether or not occupied7 in such building4 7,d7 ,floor space fraction ,for purposes of subparagraph 7,b71 the term floor space fraction means the fraction-- 7i7 the numerator of which is the total floor space of the working families units in such building1 and 7ii7 the denominator of which is the total floor space of the residential rental units 7whether or not occupied7 in such building4 7#b7 ,qualified working families building ,the term qualified working families building means any building which is part of a qualified working families housing project at all times during the period-- 7,a7 beginning on the #ast day in the credit period on which such building is part of such a project1 and 7,b7 ending on the last day of the credit period with respect to such building4 7d7 ,eligible basis ,for purposes of this section-- 7#a7 ,new buildings ,the eligible basis of a new building is its adjusted basis as of the close of the #ast taxable year of the credit period4 7#b7 ,existing buildings 7,a7 ,in general ,the eligible basis of an existing building is-- 7i7 in the case of a building which meets the requirements of subparagraph 7,b71 its adjusted basis as of the close of the #ast taxable year of the credit period1 and 7ii7 zero in any other case4 7,b7 ,requirements ,a building meets the requirements of this subparagraph if-- 7i7 the building is acquired by purchase 7as defined in section #agi7;d77#b771 7ii7 there is a period of at least #aj years between the date of its acquisition by the taxpayer and the date the building was last placed in service1 7iii7 the building was not previously placed in service by the taxpayer or by any person who was a related person with respect to the taxpayer as of the time previously placed in service1 and 7iv7 except as provided in subsection 7f77#e71 a credit is allowable under subsection 7a7 by reason of subsection 7e7 with respect to the building4 7,c7 ,adjusted basis ,for purposes of subparagraph 7,a71 the adjusted basis of any building shall not include so much of the basis of such building as is determined by reference to the basis of other property held at any time by the person acquiring the building4 7,d7 ,special rules 7i7 ,special rules for certain transfers ,for purposes of determining under subparagraph 7,b77ii7 when a building was last placed in service1 there shall not be taken into account any placement in service-- 7,i7 in connection with the acquisition of the building in a transaction in which the basis of the building in the hands of the person acquiring it is determined in whole or in part by reference to the adjusted basis of such building in the hands of the person from whom acquired1 7,,ii7 by a person whose basis in such building is determined under section #ajad7;a7 7relating to property acquired from a decedent71 7,,iii7 by any governmental unit or qualified nonprofit organization if the requirements of subparagraph 7,b77ii7 are met with respect to the placement in service by such unit or organization and all the income from such property is exempt from ,federal income taxation1 7,,iv7 by any person who acquired such building by foreclosure 7or by instrument in lieu of foreclosure7 of any purchase-money security interest held by such person if the requirements of subparagraph 7,b77ii7 are met with respect to the placement in service by such person and such building is resold within #ab months after the date such building is placed in service by such person after such foreclosure1 or 7,v7 of a single-family residence by any individual who owned and used such residence for no other purpose than as his principal residence4 7ii7 ,related person ,for purposes of subparagraph 7,b77iii71 a person 7hereinafter in this subclause referred to as the related person7 is related to any person if the related person bears a relationship to such person specified in section #bfg7;b7 or #gjg7;b77#a71 or the related person and such person are engaged in trades or businesses under common control 7within the meaning of subsections 7a7 and 7b7 of section #eb74 7#c7 ,special rules relating to determination of adjusted basis ,for purposes of this subsection-- 7,a7 ,in general ,except as provided in subparagraph 7,b71 the adjusted basis of any building shall be determined without regard to the adjusted basis of any property which is not residential rental property4 7,b7 ,basis of property in common areas1 etc41 included 7i7 ,in general ,except as provided in clause 7ii71 the adjusted basis of any building shall be determined by taking into account the adjusted basis of property 7of a character subject to the allowance for depreciation7 used in common areas or provided as comparable amenities to all residential rental units in such building4 7ii7 ,special rule ,in the case of any building for which the low-income housing tax credit is allowable under section #db1 the adjusted basis of the building under this section shall be determined without regard to property used in common areas or provided as comparable amenities to all residential rental units in such building4 7,c7 ,no reduction for depreciation ,the adjusted basis of any building shall be determined without regard to paragraphs 7#b7 and 7#c7 of section #ajaf7;a74 7#d7 ,special rules for determining eligible basis 7,a7 ,federal grants not taken into account in determining eligible basis ,the eligible basis of a building shall not include any costs financed with the proceeds of a ,federally funded grant4 7,b7 ,increase in credit for buildings in high cost areas 7i7 ,in general ,in the case of any building located in a difficult development area which is designated for purposes of this subparagraph-- 7,i7 in the case of a new building1 the eligible basis of such building shall be #acj percent of such basis determined without regard to this subparagraph1 and 7,,ii7 in the case of an existing building1 the rehabilitation expenditures taken into account under subsection 7e7 shall be #acj percent of such expenditures determined without regard to this subparagraph4 7ii7 ,limitation ,clause 7i7 shall not apply to any building if paragraph 7#a7 of subsection 7h7 does not apply to any portion of the eligible basis of such building by reason of paragraph 7#i7 of such subsection4 7iii7 ,difficult development areas 7,i7 ,in general ,the term difficult development areas means any area designated by the ,secretary of ,housing and ,urban ,development as an area which has high construction1 land1 or utility costs relative to area median gross income1 any rural area1 and any ,indian area4 7,,ii7 ,rural area ,for purposes of subclause 7,i71 the term rural area means any non-metropolitan area1 or any rural area as defined by section #ebj of the ,housing ,act of #aidi1 which is identified by the qualified allocation plan under subsection 7m77#a77;,b74 7,,iii7 ,indian area ,for purposes of subclause 7,i71 the term ,indian area means any ,indian area 7as defined in section #d7aa7 of the ,native ,american ,housing ,assistance and ,self ,determination ,act of #aiif 7#be ,u4,s4,c4 #dajc7aa7774 7,,iv7 ,special rule for buildings in ,indian areas ,in the case of an area which is a difficult development area solely because it is an ,indian area1 a building shall not be treated as located in such area unless such building is assisted or financed under the ,native ,american ,housing ,assistance and ,self ,determination ,act of #aiif 7#be ,u4,s4,c4 #daja et seq47 or the project sponsor is an ,indian tribe 7as defined in section #de;,a7c77#f771 a tribally designated housing entity 7as defined in section #d7bb7 of such ,act 7#be ,u4,s4,c4 #dajc7bb7771 or wholly owned or controlled by such an ,indian tribe or tribally designated housing entity4 7,v7 ,limit on areas designated ,the portions of metropolitan statistical areas which may be designated for purposes of this subparagraph shall not exceed an aggregate area having #bj percent of the population of such metropolitan statistical areas4 ,a comparable rule shall apply to nonmetropolitan areas4 7iv7 ,special rules and definitions ,for purposes of this subparagraph-- 7,i7 population shall be determined on the basis of the most recent decennial census for which data are available1 7,,ii7 area median gross income shall be determined in accordance with subsection 7g77#d71 7,,iii7 the term metropolitan statistical area has the same meaning as when used in section #adc7k77#b77;,b71 and 7,,iv7 the term nonmetropolitan area means any county 7or portion thereof7 which is not within a metropolitan statistical area4 7v7 ,buildings designated by ,state ,housing ,credit ,agency ,any building which is designated by the ,state housing credit agency as requiring the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified working families housing project shall be treated for purposes of this subparagraph as located in a difficult development area which is designated for purposes of this subparagraph4 7#e7 ,credit allowable for certain buildings acquired during #aj-year period ,on application by the taxpayer1 the ,secretary may waive paragraph 7#b77;,b77ii7 with respect to any building acquired from an insured depository institution in default 7as defined in section #c of the ,federal ,deposit ,insurance ,act7 or from a receiver or conservator of such an institution4 7#f7 ,acquisition of building before end of prior credit period 7,a7 ,in general ,under regulations prescribed by the ,secretary1 in the case of a building described in subparagraph 7,b7 7or interest therein7 which is acquired by the taxpayer-- 7i7 paragraph 7#b77;,b7 shall not apply1 but 7ii7 the credit allowable by reason of subsection 7a7 to the taxpayer for any period after such acquisition shall be equal to the amount of credit which would have been allowable under subsection 7a7 for such period to the prior owner referred to in subparagraph 7,b7 had such owner not disposed of the building4 7,b7 ,description of building ,a building is described in this subparagraph if-- 7i7 a credit was allowed by reason of subsection 7a7 to any prior owner of such building1 and 7ii7 the taxpayer acquired such building before the end of the credit period for such building with respect to such prior owner 7determined without regard to any disposition by such prior owner74 7e7 ,rehabilitation expenditures treated as separate new building 7#a7 ,in general ,rehabilitation expenditures paid or incurred by the taxpayer with respect to any building shall be treated for purposes of this section as a separate building which is not a new building4 7#b7 ,rehabilitation expenditures ,for purposes of paragraph 7#a7-- 7,a7 ,in general ,the term rehabilitation expenditures means amounts chargeable to capital account and incurred for property 7or additions or improvements to property7 of a character subject to the allowance for depreciation in connection with the rehabilitation of a building4 7,b7 ,cost of acquisition1 etc41 not included ,such term does not include the cost of acquiring any building 7or interest therein7 or any amount not permitted to be taken into account under paragraph 7#c7 of subsection 7d74 7,c7 ,certain relocation costs ,in the case of a rehabilitation of a building to which section #bhj;,b does not apply1 costs relating to the relocation of occupants1 including-- 7i7 amounts paid to occupants1 7ii7 amounts paid to third parties for services relating to such relocation1 and 7iii7 amounts paid for temporary housing for occupants1 shall be treated as chargeable to capital account and taken into account as rehabilitation expenditures4 7#c7 ,minimum expenditures to qualify 7,a7 ,in general ,paragraph 7#a7 shall apply to rehabilitation expenditures with respect to any building only if-- 7i7 the expenditures are allocable to #a or more working families units or substantially benefit such units1 and 7ii7 the amount of such expenditures during any #bd-month period meets the requirements of whichever of the following subclauses requires the greater amount of such expenditures3 7,i7 ,the requirement of this subclause is met if such amount is not less than #bj percent of the adjusted basis of the building 7determined as of the #ast day of such period and without regard to paragraphs 7#b7 and 7#c7 of section #ajaf7;a774 7,,ii7 ,the requirement of this subclause is met if the qualified basis attributable to such amount1 when divided by the number of working families units in the building1 is equal to or greater than the dollar amount in effect under section #db7;e77#c77;,a77ii77,,ii7 for the calendar year in which such expenditures are treated as placed in service under paragraph 7#d74 7,b7 ,date of determination ,the determination under subparagraph 7,a7 shall be made as of the close of the #ast taxable year in the credit period with respect to such expenditures4 7#d7 ,special rules ,for purposes of applying this section with respect to expenditures which are treated as a separate building by reason of this subsection-- 7,a7 such expenditures shall be treated as placed in service at the close of the #bd-month period referred to in paragraph 7#c77;,a71 and 7,b7 the applicable fraction under subsection 7c77#a7 shall be the applicable fraction for the building 7without regard to paragraph 7#a77 with respect to which the expenditures were incurred4 ,nothing in subsection 7d77#b7 shall prevent a credit from being allowed by reason of this subsection4 7#e7 ,no double counting ,rehabilitation expenditures may1 at the election of the taxpayer1 be taken into account under this subsection or subsection 7d77#b77;,a77i7 but not under both such subsections4 7#f7 ,regulations to apply subsection with respect to group of units in building ,the ,secretary may prescribe regulations1 consistent with the purposes of this subsection1 treating a group of units with respect to which rehabilitation expenditures are incurred as a separate new building4 7f7 ,definition and special rules relating to credit period 7#a7 ,credit period defined ,for purposes of this section1 the term credit period means1 with respect to any building1 the period of #ae taxable years beginning with-- 7,a7 the taxable year in which the building is placed in service1 or 7,b7 at the election of the taxpayer1 the succeeding taxable year1 but only if the building is a qualified working families building as of the close of the #ast year of such period4 ,the election under subparagraph 7,b71 once made1 shall be irrevocable4 7#b7 ,special rule for #ast year of credit period 7,a7 ,in general ,the credit allowable under subsection 7a7 with respect to any building for the #ast taxable year of the credit period shall be determined by substituting for the applicable fraction under subsection 7c77#a7 the fraction-- 7i7 the numerator of which is the sum of the applicable fractions determined under subsection 7c77#a7 as of the close of each full month of such year during which such building was in service1 and 7ii7 the denominator of which is #ab4 7,b7 ,disallowed #ast-year credit allowed in #afth year ,any reduction by reason of subparagraph 7,a7 in the credit allowable 7without regard to subparagraph 7,a77 for the #ast taxable year of the credit period shall be allowable under subsection 7a7 for the #ast taxable year following the credit period4 7#c7 ,determination of applicable percentage with respect to increases in qualified basis after #ast year of credit period 7,a7 ,in general ,in the case of any building which was a qualified working families building as of the close of the #ast year of the credit period1 if-- 7i7 as of the close of any taxable year in the credit period 7after the #ast year of such period7 the qualified basis of such building1 exceeds 7ii7 the qualified basis of such building as of the close of the #ast year of the credit period1 the applicable percentage which shall apply under subsection 7a7 for the taxable year to such excess shall be the percentage equal to #b_/c of the applicable percentage which 7after the application of subsection 7h77 would but for this paragraph apply to such basis4 7,b7 #ast year computation applies ,a rule similar to the rule of paragraph 7#b77;,a7 shall apply to any increase in qualified basis to which subparagraph 7,a7 applies for the #ast year of such increase4 7#d7 ,dispositions of property ,if a building 7or an interest therein7 is disposed of during any year for which credit is allowable under subsection 7a71 such credit shall be allocated between the parties on the basis of the number of days during such year the building 7or interest7 was held by each4 7#e7 ,credit period for existing buildings not to begin before rehabilitation credit allowed 7,a7 ,in general ,the credit period for an existing building shall not begin before the #ast taxable year of the credit period for rehabilitation expenditures with respect to the building4 7,b7 ,acquisition credit allowed for certain buildings not allowed a rehabilitation credit 7i7 ,in general ,in the case of a building described in clause 7ii7-- 7,i7 subsection 7d77#b77;,b77iv7 shall not apply1 and 7,,ii7 the credit period for such building shall not begin before the taxable year which would be the #ast taxable year of the credit period for rehabilitation expenditures with respect to the building under the modifications described in clause 7ii77,,ii74 7ii7 ,building described ,a building is described in this clause if-- 7,i7 a waiver is granted under subsection 7d77#d7 with respect to the acquisition of the building1 and 7,,ii7 a credit would be allowed for rehabilitation expenditures with respect to such building if subsection 7e77#c77;,a77ii77,i7 did not apply and if the dollar amount in effect under subsection 7e77#c77;,a77ii77,,ii7 were two-thirds of such amount4 7g7 ,qualified working families housing project ,for purposes of this section-- 7#a7 ,qualified working families housing project 7,a7 ,in general ,the term qualified working families housing project means any project for residential rental property if such project meets the low-income requirements of subparagraph 7,b7 and the working families requirements of subparagraph 7,c74 7,b7 ,low-income requirements ,the project meets the low-income requirements of this subparagraph if #bj percent or more of the residential units in such project are both rent-restricted and occupied by individuals whose income is #fj percent or less of area median gross income4 7,c7 ,working families requirements 7i7 ,in general ,the project meets the working families requirements of this subparagraph if #dj percent or more of the residential units in such project are both rent-restricted and occupied by individuals whose income does not exceed the imputed income limitation designated by the taxpayer with respect to the respective unit4 7ii7 ,special ,rules ,relating to ,income ,limitation ,for purposes of clause 7i7-- 7,i7 ,designation ,the taxpayer shall designate the imputed income limitation of each unit taken into account under such clause4 7,,ii7 ,average test ,the average of the imputed income limitations designated under subclause 7,i7 shall not exceed #ajj percent of area median gross income4 7,,iii7 ,permitted increments ,the designated imputed income limitation of any unit under subclause 7,i7 shall be #gj1 #hj1 #ij1 #ajj1 #aaj1 #abj1 #acj1 #adj1 #aej1 #afj1 #agj1 or #ahj percent of area median gross income4 ,any designation under this paragraph1 once made1 shall be irrevocable4 ,for purposes of this paragraph1 any property shall not be treated as failing to be residential rental property merely because part of the building in which such property is located is used for purposes other than residential rental purposes4 7#b7 ,rent-restricted units 7,a7 ,in general ,for purposes of paragraph 7#a71 a residential unit is rent-restricted if the gross rent with respect to such unit does not exceed #cj percent of the imputed income limitation applicable to such unit4 ,for purposes of the preceding sentence1 the amount of the income limitation under paragraph 7#a7 applicable for any period shall not be less than such limitation applicable for the earliest period the building 7which contains the unit7 was included in the determination of whether the project is a qualified working families housing project4 7,b7 ,gross rent ,for purposes of subparagraph 7,a71 gross rent-- 7i7 includes any utility allowance determined by the ,secretary after taking into account such determinations under section #h of the ,united ,states ,housing ,act of #aicg1 7ii7 does not include any fee for a supportive service which is paid to the owner of the unit 7on the basis of the working families status of the tenant of the unit7 by any governmental program of assistance 7or by an organization described in section #eja7;c77#c7 and exempt from tax under section #eja7;a77 if such program 7or organization7 provides assistance for rent and the amount of assistance provided for rent is not separable from the amount of assistance provided for supportive services1 and 7iii7 does not include any rental payment to the owner of the unit to the extent such owner pays an equivalent amount to the ,farmers' ,home ,administration under section #eae of the ,housing ,act of #aidi4 ,for purposes of clause 7ii71 the term supportive service means any service provided under a planned program of services designed to enable residents of a residential rental property to remain independent and avoid placement in a hospital1 nursing home1 or intermediate care facility for the mentally or physically handicapped4 7,c7 ,imputed income limitation applicable to unit ,for purposes of this paragraph1 the imputed income limitation applicable to a unit is the income limitation which would apply under paragraph 7#a7 to individuals occupying the unit if the number of individuals occupying the unit were as follows3 7i7 ,in the case of a unit which does not have a separate bedroom1 #a individual4 7ii7 ,in the case of a unit which has #a or more separate bedrooms1 #a4e individuals for each separate bedroom4 ,in the case of a project with respect to which a credit is allowable by reason of this section and for which financing is provided by a bond described in section #adb7;a77#g71 the imputed income limitation shall apply in lieu of the otherwise applicable income limitation for purposes of applying section #adb7;d77#d77;,b77ii74 7,d7 ,treatment of units occupied by individuals whose incomes rise above limit 7i7 ,in general ,except as provided in clause 7ii71 notwithstanding an increase in the income of the occupants of a working families unit above the income limitation applicable under paragraph 7#a71 such unit shall continue to be treated as a working families unit if the income of such occupants initially met such income limitation and such unit continues to be rent-restricted4 7ii7 ,next available unit must be rented to working families tenant if income rises above #adj percent of income limit ,if the income of the occupants of the unit increases above #adj percent of the income limitation applicable under paragraph 7#a71 clause 7i7 shall cease to apply to such unit if any residential rental unit in the building 7of a size comparable to1 or smaller than1 such unit7 is occupied by a new resident whose income exceeds such income limitation4 7#c7 ,date for meeting requirements 7,a7 ,in general ,except as otherwise provided in this paragraph1 a building shall be treated as a qualified working families building only if the project 7of which such building is a part7 meets the requirements of paragraph 7#a7 not later than the close of the #ast year of the credit period for such building4 7,b7 ,buildings which rely on later buildings for qualification 7i7 ,in general ,in determining whether a building 7hereinafter in this subparagraph referred to as the prior building7 is a qualified working families building1 the taxpayer may take into account #a or more additional buildings placed in service during the #ab-month period described in subparagraph 7,a7 with respect to the prior building only if the taxpayer elects to apply clause 7ii7 with respect to each additional building taken into account4 7ii7 ,treatment of elected buildings ,in the case of a building which the taxpayer elects to take into account under clause 7i71 the period under subparagraph 7,a7 for such building shall end at the close of the #ab-month period applicable to the prior building4 7iii7 ,date prior building is treated as placed in service ,for purposes of determining the credit period for the prior building1 the prior building shall be treated for purposes of this section as placed in service on the most recent date any additional building elected by the taxpayer 7with respect to such prior building7 was placed in service4 7,c7 ,special rule ,a building-- 7i7 other than the #ast building placed in service as part of a project1 and 7ii7 other than a building which is placed in service during the #ab-month period described in subparagraph 7,a7 with respect to a prior building which becomes a qualified working families building1 shall in no event be treated as a qualified working families building unless the project is a qualified working families housing project 7without regard to such building7 on the date such building is placed in service4 7,d7 ,projects with more than #a building must be identified ,for purposes of this section1 a project shall be treated as consisting of only #a building unless1 before the close of the #ast calendar year in the project period 7as defined in subsection 7h77#a77;,f77ii771 each building which is 7or will be7 part of such project is identified in such form and manner as the ,secretary may provide4 7#d7 ,certain rules made applicable ,paragraphs 7#b7 7other than subparagraph 7,a7 thereof71 7#c71 and 7#g7 of section #adb7;d71 and section #ffeb7;j71 shall apply for purposes of determining whether any project is a qualified working families housing project and whether any unit is a working families unit2 except that1 in applying such provisions for such purposes-- 7,a7 the term gross rent shall have the meaning given such term by paragraph 7#b77;,b7 of this subsection1 and 7,b7 the term applicable income limit means the limitation under paragraph 7#a7 of this subsection4 7#e7 ,election to treat building after credit period as not part of a project ,for purposes of this section1 the taxpayer may elect to treat any building as not part of a qualified working families housing project for any period beginning after the credit period for such building4 7#f7 ,special rule where de minimis equity contribution ,property shall not be treated as failing to be residential rental property for purposes of this section merely because the occupant of a residential unit in the project pays 7on a voluntary basis7 to the lessor a de minimis amount to be held toward the purchase by such occupant of a residential unit in such project if-- 7,a7 all amounts so paid are refunded to the occupant on the cessation of his occupancy of a unit in the project1 and 7,b7 the purchase of the unit is not permitted until after the close of the credit period with respect to the building in which the unit is located4 ,any amount paid to the lessor as described in the preceding sentence shall be included in gross rent under paragraph 7#b7 for purposes of determining whether the unit is rent-restricted4 7#g7 ,scattered site projects ,buildings which would 7but for their lack of proximity7 be treated as a project for purposes of this section shall be so treated if all of the dwelling units in each of the buildings are rent-restricted 7within the meaning of paragraph 7#b77 residential rental units4 7#h7 ,waiver of certain recertifications ,on application by the taxpayer1 the ,secretary may waive any annual recertification of tenant income for purposes of this subsection1 if the entire building is occupied by working families tenants4 7#i7 ,clarification of general public use requirement ,a project does not fail to meet the general public use requirement solely because of occupancy restrictions or preferences that favor tenants-- 7,a7 with special needs1 or 7,b7 who are members of a specified group under a ,federal program or ,state program or policy that supports housing for such a specified group4 7#aj7 ,prevailing wage requirements ,no credit shall be determined under this section with respect to any building 7including any rehabilitation expenditures treated as a separate building under subsection 7e77 unless such building meets requirements similar the requirements described in section #de7;b77#g74 7h7 ,limitation on aggregate credit allowable with respect to projects located in a ,state 7#a7 ,credit may not exceed credit amount allocated to building 7,a7 ,in general ,the amount of the credit determined under this section for any taxable year with respect to any building shall not exceed the housing credit dollar amount allocated to such building under this subsection4 7,b7 ,time for making allocation ,except in the case of an allocation which meets the requirements of subparagraph 7,c71 7,d71 7,e71 or 7,f71 an allocation shall be taken into account under subparagraph 7,a7 only if it is made not later than the close of the calendar year in which the building is placed in service4 7,c7 ,exception where binding commitment ,an allocation meets the requirements of this subparagraph if there is a binding commitment 7not later than the close of the calendar year in which the building is placed in service7 by the housing credit agency to allocate a specified housing credit dollar amount to such building beginning in a specified later taxable year4 7,d7 ,exception where increase in qualified basis 7i7 ,in general ,an allocation meets the requirements of this subparagraph if such allocation is made not later than the close of the calendar year in which ends the taxable year to which it will #ast apply but only to the extent the amount of such allocation does not exceed the limitation under clause 7ii74 7ii7 ,limitation ,the limitation under this clause is the amount of credit allowable under this section 7without regard to this subsection7 for a taxable year with respect to an increase in the qualified basis of the building equal to the excess of-- 7,i7 the qualified basis of such building as of the close of the #ast taxable year to which such allocation will apply1 over 7,,ii7 the qualified basis of such building as of the close of the #ast taxable year to which the most recent prior housing credit allocation with respect to such building applied4 7iii7 ,housing credit dollar amount reduced by full allocation ,notwithstanding clause 7i71 the full amount of the allocation shall be taken into account under paragraph 7#b74 7,e7 ,exception where #aj percent of cost incurred 7i7 ,in general ,an allocation meets the requirements of this subparagraph if such allocation is made with respect to a qualified building which is placed in service not later than the close of the second calendar year following the calendar year in which the allocation is made4 7ii7 ,qualified building ,for purposes of clause 7i71 the term qualified building means any building which is part of a project if the taxpayer's basis in such project 7as of the date which is #a year after the date that the allocation was made7 is more than #aj percent of the taxpayer's reasonably expected basis in such project 7as of the close of the second calendar year referred to in clause 7i774 ,such term does not include any existing building unless a credit is allowable under subsection 7e7 for rehabilitation expenditures paid or incurred by the taxpayer with respect to such building for a taxable year ending during the second calendar year referred to in clause 7i7 or the prior taxable year4 7,f7 ,allocation of credit on a project basis 7i7 ,in general ,in the case of a project which includes 7or will include7 more than #a building1 an allocation meets the requirements of this subparagraph if-- 7,i7 the allocation is made to the project for a calendar year during the project period1 7,,ii7 the allocation only applies to buildings placed in service during or after the calendar year for which the allocation is made1 and 7,,iii7 the portion of such allocation which is allocated to any building in such project is specified not later than the close of the calendar year in which the building is placed in service4 7ii7 ,project period ,for purposes of clause 7i71 the term project period means the period-- 7,i7 beginning with the #ast calendar year for which an allocation may be made for the #ast building placed in service as part of such project1 and 7,,ii7 ending with the calendar year the last building is placed in service as part of such project4 7#b7 ,allocated credit amount to apply to all taxable years ending during or after credit allocation year ,any housing credit dollar amount allocated to any building for any calendar year-- 7,a7 shall apply to such building for all taxable years in the credit period ending during or after such calendar year1 and 7,b7 shall reduce the aggregate housing credit dollar amount of the allocating agency only for such calendar year4 7#c7 ,housing credit dollar amount for agencies 7,a7 ,in general ,the aggregate housing credit dollar amount which a housing credit agency may allocate for any calendar year is the portion of the ,state housing credit ceiling allocated under this paragraph for such calendar year to such agency4 7,b7 ,state ceiling initially allocated to ,state housing credit agencies ,except as provided in subparagraph 7,d71 the ,state housing credit ceiling for each calendar year shall be allocated to the housing credit agency of such ,state4 ,if there is more than #a housing credit agency of a ,state1 all such agencies shall be treated as a single agency4 7,c7 ,state housing credit ceiling ,the ,state housing credit ceiling applicable to any ,state for any calendar year shall be an amount equal to the sum of-- 7i7 the unused ,state housing credit ceiling 7if any7 of such ,state for the preceding calendar year1 7ii7 the greater of-- 7,i7 #a4jj multiplied by the ,state population1 or 7,,ii7 #a1ejj1jjj1 plus 7iii7 the amount of ,state housing credit ceiling returned in the calendar year4 ,for purposes of clause 7i71 the unused ,state housing credit ceiling for any calendar year is the excess 7if any7 of the sum of the amounts described in clauses 7ii7 7reduced by the aggregate amounts described in paragraph 7#aj77;,a77i7 with respect to all elections made for such calendar year7 and 7iii7 over the aggregate housing credit dollar amount allocated for such year4 ,for purposes of clause 7iii71 the amount of ,state housing credit ceiling returned in the calendar year equals the housing credit dollar amount previously allocated within the ,state to any project which fails to meet the #aj percent test under paragraph 7#a77;,e77ii7 on a date after the close of the calendar year in which the allocation was made or which does not become a qualified working families housing project within the period required by this section or the terms of the allocation or to any project with respect to which an allocation is cancelled by mutual consent of the housing credit agency and the allocation recipient4 7,d7 ,state may provide for different allocation ,rules similar to the rules of section #adf7;e7 7other than paragraph 7#b77;,b7 thereof7 shall apply for purposes of this paragraph4 7,e7 ,population ,for purposes of this paragraph1 population shall be determined in accordance with section #adf7;j74 7,f7 ,cost-of-living adjustment 7i7 ,in general ,in the case of a calendar year after #bjbf1 the #a1ejj1jjj and #a4jj amounts in subparagraph 7,c7 shall each be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7ii7 ,rounding 7,i7 ,in the case of the #a1adj1jjj amount1 any increase under clause 7i7 which is not a multiple of #e1jjj shall be rounded to the next lowest multiple of #e1jjj4 7,,ii7 ,in the case of the #a4jj amount1 any increase under clause 7i7 which is not a multiple of #e cents shall be rounded to the next lowest multiple of #e cents4 7#d7 ,portion of ,state ceiling set-aside for certain projects involving qualified nonprofit organizations 7,a7 ,in general ,not more than #ij percent of the ,state housing credit ceiling 7determined without regard to paragraph 7#g77 for any ,state for any calendar year shall be allocated to projects other than qualified working families housing projects described in subparagraph 7,b74 7,b7 ,projects involving qualified nonprofit organizations ,for purposes of subparagraph 7,a71 a qualified working families housing project is described in this subparagraph if a qualified nonprofit organization is to own an interest in the project 7directly or through a partnership7 and materially participate 7within the meaning of section #dfi7;h77 in the development and operation of the project throughout the credit period4 7,c7 ,qualified nonprofit organization ,for purposes of this paragraph1 the term qualified nonprofit organization means any organization if-- 7i7 such organization is described in paragraph 7#c7 or 7#d7 of section #eja7;c7 and is exempt from tax under section #eja7;a71 7ii7 such organization is determined by the ,state housing credit agency not to be affiliated with or controlled by a for-profit organization1 and 7iii7 one of the exempt purposes of such organization includes the fostering of working families housing4 7,d7 ,treatment of certain subsidiaries 7i7 ,in general ,for purposes of this paragraph1 a qualified nonprofit organization shall be treated as satisfying the ownership and material participation test of subparagraph 7,b7 if any qualified corporation in which such organization holds stock satisfies such test4 7ii7 ,qualified corporation ,for purposes of clause 7i71 the term qualified corporation means any corporation if #ajj percent of the stock of such corporation is held by #a or more qualified nonprofit organizations at all times during the period such corporation is in existence4 7,e7 ,state may not override set-aside ,nothing in subparagraph 7,e7 of paragraph 7#c7 shall be construed to permit a ,state not to comply with subparagraph 7,a7 of this paragraph4 7#e7 ,buildings eligible for credit only if minimum long-term commitment to working families housing 7,a7 ,in general ,no credit shall be allowed by reason of this section with respect to any building for the taxable year unless an extended working families housing commitment is in effect as of the end of such taxable year4 7,b7 ,extended working families housing commitment ,for purposes of this paragraph1 the term extended working families housing commitment means any agreement between the taxpayer and the housing credit agency-- 7i7 which requires that the applicable fraction 7as defined in subsection 7c77#a77 for the building for each taxable year in the extended use period will not be less than the applicable fraction specified in such agreement and which prohibits the actions described in subclauses 7,i7 and 7,,ii7 of subparagraph 7,e77ii71 7ii7 which allows individuals who meet the income limitation applicable to the building under subsection 7g7 7whether prospective1 present1 or former occupants of the building7 the right to enforce in any ,state court the requirement and prohibitions of clause 7i71 7iii7 which prohibits the disposition to any person of any portion of the building to which such agreement applies unless all of the building to which such agreement applies is disposed of to such person1 7iv7 which prohibits the refusal to lease to a holder of a voucher or certificate of eligibility under section #h of the ,united ,states ,housing ,act of #aicg because of the status of the prospective tenant as such a holder1 7v7 which is binding on all successors of the taxpayer1 and 7vi7 which1 with respect to the property1 is recorded pursuant to ,state law as a restrictive covenant4 7,c7 ,allocation of credit may not exceed amount necessary to support commitment ,the housing credit dollar amount allocated to any building may not exceed the amount necessary to support the applicable fraction specified in the extended working families housing commitment for such building1 including any increase in such fraction pursuant to the application of subsection 7f77#c7 if such increase is reflected in an amended working families housing commitment4 7,d7 ,extended use period ,for purposes of this paragraph1 the term extended use period means the period-- 7i7 beginning on the #ast day in the credit period on which such building is part of a qualified working families housing project1 and 7ii7 ending on the later of-- 7,i7 the date specified by such agency in such agreement1 or 7,,ii7 the date which is #ae years after the close of the credit period4 7,e7 ,exceptions if foreclosure or if no buyer willing to maintain working families status 7i7 ,in general ,the extended use period for any building shall terminate on the #fast day after the taxpayer 7or a successor in interest7 provides notice to the ,secretary and the housing credit agency that the building has been acquired by foreclosure 7or instrument in lieu of foreclosure7 and that the taxpayer intends the termination of such period1 unless1 before such date1 the ,secretary or the housing credit agency determines that such acquisition is part of an arrangement with the taxpayer a purpose of which is to terminate such period4 7ii7 ,eviction1 etc41 of existing working families tenants not permitted ,the termination of an extended use period under clause 7i7 shall not be construed to permit before the close of the #c-year period following such termination-- 7,i7 the eviction or the termination of tenancy 7other than for good cause7 of an existing tenant of any working families unit1 or 7,,ii7 any increase in the gross rent with respect to such unit not otherwise permitted under this section4 7,f7 ,effect of noncompliance ,if1 during a taxable year1 there is a determination that an extended working families housing agreement was not in effect as of the beginning of such year1 such determination shall not apply to any period before such year and subparagraph 7,a7 shall be applied without regard to such determination if the failure is corrected within #a year from the date of the determination4 7,g7 ,projects which consist of more than #a building ,the application of this paragraph to projects which consist of more than #a building shall be made under regulations prescribed by the ,secretary4 7#f7 ,special rules 7,a7 ,building must be located within jurisdiction of credit agency ,a housing credit agency may allocate its aggregate housing credit dollar amount only to buildings located in the jurisdiction of the governmental unit of which such agency is a part4 7,b7 ,agency allocations in excess of limit ,if the aggregate housing credit dollar amounts allocated by a housing credit agency for any calendar year exceed the portion of the ,state housing credit ceiling allocated to such agency for such calendar year1 the housing credit dollar amounts so allocated shall be reduced 7to the extent of such excess7 for buildings in the reverse of the order in which the allocations of such amounts were made4 7,c7 ,credit reduced if allocated credit dollar amount is less than credit which would be allowable without regard to placed in service convention1 etc 7i7 ,in general ,the amount of the credit determined under this section with respect to any building shall not exceed the clause 7ii7 percentage of the amount of the credit which would 7but for this subparagraph7 be determined under this section with respect to such building4 7ii7 ,determination of percentage ,for purposes of clause 7i71 the clause 7ii7 percentage with respect to any building is the percentage which-- 7,i7 the housing credit dollar amount allocated to such building1 bears to 7,,ii7 the credit amount determined in accordance with clause 7iii74 7iii7 ,determination of credit amount ,the credit amount determined in accordance with this clause is the amount of the credit which would 7but for this subparagraph7 be determined under this section with respect to the building if-- 7,i7 this section were applied without regard to paragraphs 7#b77;,a7 and 7#c77;,b7 of subsection 7f71 and 7,,ii7 subsection 7f77#c77;,a7 were applied without regard to the percentage equal to #b_/c of4 7,d7 ,housing credit agency to specify applicable percentage and maximum qualified basis ,in allocating a housing credit dollar amount to any building1 the housing credit agency shall specify the applicable percentage and the maximum qualified basis which may be taken into account under this section with respect to such building4 ,the applicable percentage and maximum qualified basis so specified shall not exceed the applicable percentage and qualified basis determined under this section without regard to this subsection4 7#g7 ,increase in ,state ceiling dedicated to certain rural development projects 7,a7 ,in general ,the ,state housing credit ceiling for any calendar year shall be increased by an amount equal to #bj percent of the amount determined under paragraph 7#c77;,c77ii74 7,b7 ,use of increased amount 7i7 ,in general ,the amount of the increase under subparagraph 7,a7 for any calendar year may only be allocated to buildings located in a rural area or exurban area4 7ii7 ,rural area ,for purposes of clause 7i71 the term rural area means any non-metropolitan area1 or any rural area as defined by section #ebj of the ,housing ,act of #aidi1 which is identified by the qualified allocation plan under subsection 7l77#a77;,b74 7iii7 ,exurban area ,for purposes of clause 7i71 the term exurban area has the meaning given such term by the ,secretary after consultation with the ,bureau of the ,census4 7#h7 ,other definitions ,for purposes of this subsection-- 7,a7 ,housing credit agency ,the term housing credit agency means any agency authorized to carry out this subsection4 7,b7 ,possessions treated as ,states ,the term ,state includes a possession of the ,united ,states4 7#i7 ,credit for buildings financed by tax-exempt bonds subject to volume cap not taken into account ,rules similar to the rules of subsections 7h77#d71 7m77#a77;,d71 and 7m77#b77;,d7 of section #db shall apply for purposes of this subsection4 7#aj7 ,election to transfer ,state housing credit ceiling for allocations to low-income buildings 7,a7 ,in general ,if a ,state housing credit agency makes an election under this paragraph with respect to a calendar year-- 7i7 the ,state housing credit ceiling for such calendar year under paragraph 7#c7 7determined before application of paragraph 7#g77 shall be reduced by the amount specified in such election1 7ii7 the amount determined under paragraph 7#g7 for such calendar year shall be reduced by the amount specified in such election1 and 7iii7 the amount determined under section #db7;h77#c77;,c77ii7 for such calendar year shall be increased by the sum of the amounts specified in clauses 7i7 and 7ii71 except that any amount specified under clause 7ii7-- 7,i7 may only be allocated under such section to qualified low-income buildings 7as defined in section #db7 located in a rural area or exurban area 7as defined in paragraph 7#g771 and 7,,ii7 shall not be taken into account for purposes of determining the unused housing credit ceiling under the second sentence of section #db7;h77#c77;,c74 7,b7 ,time and manner for making election 7i7 ,in general ,an election under this paragraph-- 7,i7 shall be made before the end of the calendar year with respect to which such election applies1 7,,ii7 shall be made in such manner as specified by the ,secretary1 and 7,,iii7 shall separately specify the amount of reductions to be made under paragraph 7#c7 and paragraph 7#g74 7ii7 ,frequency ,a ,state housing credit agency may make more than one election under this section with respect to any calendar year1 and any such election1 once made1 shall be revocable only if such revocation is made before the end of the calendar year with respect to which such election is made4 7,c7 ,limitation ,the aggregate amount specified in elections under this paragraph with respect to any ,state housing credit agency for calendar year shall not exceed the sum of-- 7i7 the amount determined under paragraph 7#c77;,c77ii7 for such calendar year1 plus 7ii7 the amount determined under paragraph 7#g7 for such calendar year4 7i7 ,definitions and special rules ,for purposes of this section-- 7#a7 ,working families unit 7,a7 ,in general ,the term working families unit means any unit in a building if-- 7i7 such unit is rent-restricted 7as defined in subsection 7g77#b771 and 7ii7 the individuals occupying such unit meet the income limitation applicable under subsection 7g77#a7 to the project of which such building is a part4 7,b7 ,exceptions 7i7 ,exclusion of low-income units ,a unit shall not be treated as a working families unit if such unit is a low-income unit 7as defined under section #db7;i77#c774 7ii7 ,unit must be suitable for permanent occupancy 7,i7 ,in general ,a unit shall not be treated as a working families unit unless the unit is suitable for occupancy and used other than on a transient basis4 7,,ii7 ,suitability for occupancy ,for purposes of subclause 7,i71 the suitability of a unit for occupancy shall be determined under regulations prescribed by the ,secretary taking into account local health1 safety1 and building codes4 7,,iii7 ,single-room occupancy units ,for purposes of subclause 7,i71 a single-room occupancy unit shall not be treated as used on a transient basis merely because it is rented on a month-by-month basis4 7,c7 ,special rule for buildings having #d or fewer units ,in the case of any building which has #d or fewer residential rental units1 no unit in such building shall be treated as a working families unit if the units in such building are owned by-- 7i7 any individual who occupies a residential unit in such building1 or 7ii7 any person who is related 7as defined in subsection 7d77#b77;,d77ii77 to such individual4 7,d7 ,rules relating to students 7i7 ,in general ,a unit occupied solely by individuals who-- 7,i7 have not attained age #bd1 and 7,,ii7 are enrolled in a full-time course of study at an institution of higher education 7as defined in section #ccjd7;f771 shall not be treated as a working families unit4 7ii7 ,exception for certain federal programs ,in the case of a ,federally-assisted building 7as defined in subsection 7d77#f77;,c77i7 of section #db71 clause 7i7 shall not apply to a unit all of the occupants of which meet all applicable requirements under the housing program described in such subsection through which the building is assisted1 financed1 or operated4 7iii7 ,other exceptions ,clause 7i7 shall not apply to a unit occupied by an individual who-- 7,i7 is married1 if such individual's spouse also occupies the unit1 7,,ii7 is a person with disabilities 7as defined in section #c7;b77#c77;,e7 of the ,united ,states ,housing ,act of #aicg71 7,,iii7 is a veteran 7as defined in section #aja7b7 of title #ch1 ,united ,states ,code71 7,,iv7 has one or more qualifying children 7as defined in section #aeb7;c771 if such children also occupy the unit1 the individual is not a dependent 7as defined in section #aeb1 determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof7 of another individual1 and such children are not claimed as dependents 7as so defined7 of another individual1 or 7,v7 is1 or was immediately prior to attaining the age of majority-- 7aa7 an emancipated minor or in legal guardianship as determined by a court of competent jurisdiction in the individual's ,state of legal residence1 7bb7 under the care and placement responsibility of the ,state agency responsible for administering a plan under part ,b or part ,e of title ,,iv of the ,social ,security ,act1 or 7cc7 was an unaccompanied youth 7within the meaning of section #gbe7f7 of the ,mc,kinney-,vento ,homeless ,assistance ,act 7#db ,u4,s4,c4 #aadcd;a7#f777 or a homeless child or youth 7within the meaning of section #gbe7b7 of such ,act 7#db ,u4,s4,c4 #aadcd;a7#b7774 7,e7 ,owner-occupied buildings having #d or fewer units eligible for credit where development plan 7i7 ,in general ,subparagraph 7,c7 shall not apply to the acquisition or rehabilitation of a building pursuant to a development plan of action sponsored by a ,state or local government or a qualified nonprofit organization4 7ii7 ,limitation on credit ,in the case of a building to which clause 7i7 applies1 the applicable fraction shall not exceed #hj percent of the unit fraction4 7iii7 ,certain unrented units treated as owner-occupied ,in the case of a building to which clause 7i7 applies1 any unit which is not rented for #ij days or more shall be treated as occupied by the owner of the building as of the #ast day it is not rented4 7#b7 ,new building ,the term new building means a building the original use of which begins with the taxpayer4 7#c7 ,existing building ,the term existing building means any building which is not a new building4 7#d7 ,application to estates and trusts ,in the case of an estate or trust1 the amount of the credit determined under subsection 7a7 shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each4 7#e7 ,impact of tenant's option to acquire property 7,a7 ,in general ,no ,federal income tax benefit shall fail to be allowable to the taxpayer with respect to any qualified working families building merely by reason of an option held by the tenants 7in cooperative form or otherwise7 or resident management corporation of such building or by a qualified nonprofit organization or government agency to purchase the property or all of the partnership interests 7other than interests of the person exercising such option or a related party thereto 7within the meaning of section #bfg7;b7 or #gjg7;b77#a777 relating to the property after the close of the credit period for a price which is not less than the minimum purchase price determined under subparagraph 7,b74 7,b7 ,minimum purchase price ,for purposes of subparagraph 7,a71 the minimum purchase price under this subparagraph is an amount equal to the principal amount of outstanding indebtedness secured by the building 7other than indebtedness incurred within the #e-year period ending on the date of the sale to the tenants74 ,in the case of a purchase of a partnership interest1 the minimum purchase price is an amount equal to such interest's ratable share of the amount determined under the preceding sentence4 7#f7 ,treatment of rural projects ,for purposes of this section1 in the case of any project for residential rental property located in a rural area 7as defined in section #ebj of the ,housing ,act of #aidi71 any income limitation measured by reference to area median gross income shall be measured by reference to the greater of area median gross income or national non-metropolitan median income4 7#g7 ,determination of whether building is ,federally subsidized 7,a7 ,in general ,except as otherwise provided in this paragraph1 for purposes of this section1 a project shall be treated as ,federally subsidized for any taxable year if1 at any time during such taxable year or any prior taxable year1 there is or was outstanding any obligation the interest on which is exempt from tax under section #ajc the proceeds of which are or were used 7directly or indirectly7 with respect to such project or the operation thereof4 7,b7 ,special rule for subsidized construction financing ,subparagraph 7,a7 shall not apply to any tax-exempt obligation used to provide construction financing for any building if-- 7i7 such obligation 7when issued7 identified the building for which the proceeds of such obligation would be used1 and 7ii7 such obligation is redeemed before such building is placed in service4 7#h7 ,reduction in basis ,in the case of any building for which a credit is allowable under this section and section #db1 the basis of the building shall be reduced by the amount of such credit allowed under subsection 7a74 7j7 ,application of at-,risk rules ,for purposes of this section-- 7#a7 ,in general ,except as otherwise provided in this subsection1 rules similar to the rules of section #di7;a77#a7 7other than subparagraphs 7,d77ii77,,ii7 and 7,d77iv77,i7 thereof71 section #di7;a77#b71 and section #di7;b77#a7 shall apply in determining the qualified basis of any building in the same manner as such sections apply in determining the credit base of property4 7#b7 ,special rules for determining qualified person ,for purposes of paragraph 7#a7-- 7,a7 ,in general ,if the requirements of subparagraphs 7,b71 7,c71 and 7,d7 are met with respect to any financing borrowed from a qualified nonprofit organization1 the determination of whether such financing is qualified commercial financing with respect to any qualified working families building shall be made without regard to whether such organization-- 7i7 is actively and regularly engaged in the business of lending money1 or 7ii7 is a person described in section #di7;a77#a77;,d77iv77,,ii74 7,b7 ,financing secured by property ,the requirements of this subparagraph are met with respect to any financing if such financing is secured by the qualified working families building1 except that this subparagraph shall not apply in the case of a federally assisted building described in section #db7;d77#f77;,c7 if-- 7i7 a security interest in such building is not permitted by a ,federal agency holding or insuring the mortgage secured by such building1 and 7ii7 the proceeds from the financing 7if any7 are applied to acquire or improve such building4 7,c7 ,portion of building attributable to financing ,the requirements of this subparagraph are met with respect to any financing for any taxable year in the credit period if1 as of the close of such taxable year1 not more than #fj percent of the eligible basis of the qualified working families building is attributable to such financing 7reduced by the principal and interest of any governmental financing which is part of a wrap-around mortgage involving such financing74 7,d7 ,repayment of principal and interest ,the requirements of this subparagraph are met with respect to any financing if such financing is fully repaid on or before the earliest of-- 7i7 the date on which such financing matures1 7ii7 the #ijth day after the close of the credit period with respect to the qualified working families building1 or 7iii7 the date of its refinancing or the sale of the building to which such financing relates4 ,in the case of a qualified nonprofit organization which is not described in section #di7;a77#a77;,d77iv77,,ii7 with respect to a building1 clause 7ii7 of this subparagraph shall be applied as if the date described therein were the #ijth day after the earlier of the date the building ceases to be a qualified working families building or the date which is #ae years after the close of a credit period with respect thereto4 7#c7 ,present value of financing ,if the rate of interest on any financing described in paragraph 7#b77;,a7 is less than the rate which is #a percentage point below the applicable ,federal rate as of the time such financing is incurred1 then the qualified basis 7to which such financing relates7 of the qualified working families building shall be the present value of the amount of such financing1 using as the discount rate such applicable ,federal rate4 ,for purposes of the preceding sentence1 the rate of interest on any financing shall be determined by treating interest to the extent of government subsidies as not payable4 7#d7 ,failure to fully repay 7,a7 ,in general ,to the extent that the requirements of paragraph 7#b77;,d7 are not met1 then the taxpayer's tax under this chapter for the taxable year in which such failure occurs shall be increased by an amount equal to the applicable portion of the credit under this section with respect to such building1 increased by an amount of interest for the period-- 7i7 beginning with the due date for the filing of the return of tax imposed by chapter #a for the #ast taxable year for which such credit was allowable1 and 7ii7 ending with the due date for the taxable year in which such failure occurs1 determined by using the underpayment rate and method under section #ffba4 7,b7 ,applicable portion ,for purposes of subparagraph 7,a71 the term applicable portion means the aggregate decrease in the credits allowed to a taxpayer under section #ch for all prior taxable years which would have resulted if the eligible basis of the building were reduced by the amount of financing which does not meet requirements of paragraph 7#b77;,d74 7,c7 ,certain rules to apply ,rules similar to the rules of subparagraphs 7,a7 and 7,d7 of section #db7;j77#d7 shall apply for purposes of this subsection4 7k7 ,certifications and other reports to ,secretary 7#a7 ,certification with respect to #ast year of credit period ,following the close of the #ast taxable year in the credit period with respect to any qualified working families building1 the taxpayer shall certify to the ,secretary 7at such time and in such form and in such manner as the ,secretary prescribes7-- 7,a7 the taxable year1 and calendar year1 in which such building was placed in service1 7,b7 the adjusted basis and eligible basis of such building as of the close of the #ast year of the credit period1 7,c7 the maximum applicable percentage and qualified basis permitted to be taken into account by the appropriate housing credit agency under subsection 7h71 and 7,d7 such other information as the ,secretary may require4 ,in the case of a failure to make the certification required by the preceding sentence on the date prescribed therefor1 unless it is shown that such failure is due to reasonable cause and not to willful neglect1 no credit shall be allowable by reason of subsection 7a7 with respect to such building for any taxable year ending before such certification is made4 7#b7 ,annual reports to the ,secretary ,the ,secretary may require taxpayers to submit an information return 7at such time and in such form and manner as the ,secretary prescribes7 for each taxable year setting forth-- 7,a7 the qualified basis for the taxable year of each qualified working families building of the taxpayer1 7,b7 the information described in paragraph 7#a77;,c7 for the taxable year1 and 7,c7 such other information as the ,secretary may require4 ,the penalty under section #ffeb7;j7 shall apply to any failure to submit the return required by the ,secretary under the preceding sentence on the date prescribed therefor4 7#c7 ,annual reports from housing credit agencies ,each agency which allocates any housing credit amount to any building for any calendar year shall submit to the ,secretary 7at such time and in such manner as the ,secretary shall prescribe7 an annual report specifying-- 7,a7 the amount of housing credit amount allocated to each building for such year1 7,b7 sufficient information to identify each such building and the taxpayer with respect thereto1 and 7,c7 such other information as the ,secretary may require4 ,the penalty under section #ffeb7;j7 shall apply to any failure to submit the report required by the preceding sentence on the date prescribed therefor4 7l7 ,responsibilities of housing credit agencies 7#a7 ,plans for allocation of credit among projects 7,a7 ,in general ,notwithstanding any other provision of this section1 the housing credit dollar amount with respect to any building shall be zero unless-- 7i7 such amount was allocated pursuant to a qualified allocation plan of the housing credit agency which is approved by the governmental unit 7in accordance with rules similar to the rules of section #db7m77#a77 of which such agency is a part1 7ii7 a comprehensive market study of the housing needs of working family individuals in the area to be served by the project is conducted before the credit allocation is made and at the developer's expense by a disinterested party who is approved by such agency1 and 7iii7 a written explanation is available to the general public for any allocation of a housing credit dollar amount which is not made in accordance with established priorities and selection criteria of the housing credit agency4 7,b7 ,qualified allocation plan ,for purposes of this paragraph1 the term qualified allocation plan means any plan-- 7i7 which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions1 7ii7 which also gives preference in allocating housing credit dollar amounts among selected projects to-- 7,i7 projects obligated to serve qualified tenants for the longest periods1 7,,ii7 projects in areas with insufficient supply of housing affordable to median income households1 7,,iii7 projects which target housing to tenants at a range of incomes between #fj and #ajj percent of area median gross income1 and 7,,iv7 projects located near transit hubs1 and 7iii7 which provides a procedure that the agency 7or an agent or other private contractor of such agency7 will follow in monitoring for noncompliance with the provisions of this section and in notifying the ,internal ,revenue ,service of such noncompliance which such agency becomes aware of and in monitoring for noncompliance with habitability standards through regular site visits4 7,c7 ,certain selection criteria must be used ,the selection criteria set forth in a qualified allocation plan must include-- 7i7 project location1 7ii7 housing needs characteristics1 7iii7 project characteristics1 including whether the project includes the use of existing housing as part of a community revitalization plan1 7iv7 sponsor characteristics1 7v7 tenant populations with special housing needs1 7vi7 tenant populations of individuals with children1 7vii7 projects intended for eventual tenant ownership1 7viii7 the energy efficiency of the project1 and 7ix7 the historic nature of the project4 7,d7 ,certain selection criteria prohibited ,the selection criteria set forth in a qualified allocation plan shall not include a requirement of local approval or local contributions1 either as a threshold qualification requirement or as part of a point system to be considered for allocations of housing credit dollar amount4 7#b7 ,credit allocated to building not to exceed amount necessary to assure project feasibility 7,a7 ,in general ,the housing credit dollar amount allocated to a project shall not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the project and its viability as a qualified working families housing project throughout the credit period4 7,b7 ,agency evaluation ,in making the determination under subparagraph 7,a71 the housing credit agency shall consider-- 7i7 the sources and uses of funds and the total financing planned for the project1 7ii7 any proceeds or receipts expected to be generated by reason of tax benefits1 7iii7 the percentage of the housing credit dollar amount used for project costs other than the cost of intermediaries1 and 7iv7 the reasonableness of the developmental and operational costs of the project4 ,clause 7iii7 shall not be applied so as to impede the development of projects in hard-to-develop areas4 ,such a determination shall not be construed to be a representation or warranty as to the feasibility or viability of the project4 7,c7 ,determination made when credit amount applied for and when building placed in service 7i7 ,in general ,a determination under subparagraph 7,a7 shall be made as of each of the following times3 7,i7 ,the application for the housing credit dollar amount4 7,,ii7 ,the allocation of the housing credit dollar amount4 7,,iii7 ,the date the building is placed in service4 7ii7 ,certification as to amount of other subsidies ,prior to each determination under clause 7i71 the taxpayer shall certify to the housing credit agency the full extent of all ,federal1 ,state1 and local subsidies which apply 7or which the taxpayer expects to apply7 with respect to the building4 7m7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section1 including-- 7#a7 regulations dealing with-- 7,a7 projects which include more than #a building or only a portion of a building1 or 7,b7 buildings which are placed in service in portions1 7#b7 regulations providing for the application of this section to short taxable years1 7#c7 regulations preventing the avoidance of the rules of this section1 7#d7 regulations providing the opportunity for housing credit agencies to correct administrative errors and omissions with respect to allocations and record keeping within a reasonable period after their discovery1 taking into account the availability of regulations and other administrative guidance from the ,secretary1 and 7#e7 in consultation with the ,secretary of ,housing and ,urban ,development1 regulations or guidance to promote uniform definitions and to streamline requirements for with respect to qualified working families buildings which receive funding from programs administrated by the ,department of ,housing and ,urban ,development1 including programs authorized by ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif4 4 7b7 ,treatment as part of general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking plus at the end of paragraph 7#dj71 by striking the period at the end of paragraph 7#da7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#db7 the working families housing credit determined under section #db;,a7a74 4 7c7 ,reduction in basis ,section #ajaf7;a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking and at the end of paragraph 7#cg72 7#b7 by redesignating paragraph 7#ch7 as paragraph 7#ci72 and 7#c7 by inserting after paragraph 7#cg7 the following new paragraph3 7#ch7 to the extent provided in section #db;,a7i77#h71 and 4 7d7 ,treatment under base erosion minimum tax ,section #ei;,a7b77#d7 of he ,internal ,revenue ,code of #aihf is amended by redesignating subparagraphs 7,b7 and 7,c7 as subparagraphs 7,c7 and 7,d71 respectively1 and by inserting after subparagraphs 7,a7 the following new subparagraph3 7,b7 the working families housing credit determined under section #db;,a7a71 4 7e7 ,conforming amendments relating to low-,income housing tax credit ,section #db7n7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking regulations in the matter preceding paragraph 7#a71 7#b7 by inserting regulations before dealing with in paragraph 7#a71 7#c7 by inserting regulations before providing in paragraphs 7#b7 and 7#d71 7#d7 by inserting regulations before preventing in paragraph 7#c71 7#e7 by striking and at the end of paragraph 7#c71 7#f7 by striking the period at the end of paragraph 7#d7 and inserting 1 and1 and 7#g7 by adding at the end the following new paragraph3 7#e7 in consultation with the ,secretary of ,housing and ,urban ,development1 regulations or guidance to promote uniform definitions and to streamline requirements with respect to qualified low-income buildings which receive funding from programs administrated by the ,department of ,housing and ,urban ,development1 including programs authorized by ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif4 4 7f7 ,conforming amendments 7#a7 ,section #de,l7e7 of the ,internal ,revenue ,code of #aihf is amended by inserting or #db;,a after #db4 7#b7 ,section #ej7;c77#c77;,c7 of such ,code is amended by inserting or #db;,a after #db4 7#c7 ,section #ee7;c77#a7 of such ,code is amended by inserting #db;,a7j71 before #de7;e77#aa77;,c74 7#d7 ,subsections 7i77#c77;,c71 7i77#f77;,b77i71 and 7k77#a7 of section #dfi of such ,code are each amended by inserting or #db;,a after #db4 7#e7 ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #db the following new item3 ,sec4 #db;,a4 ,working families housing credit4 4 7g7 ,effective date ,the amendments made by this section shall apply to buildings placed in service after ,december #ca1 #bjbe1 in taxable years ending after such date4 #d4 ,loans and grants for infrastructure projects in connection with qualified working families housing projects 7a7 ,in general ,the ,secretary shall make grants and below-market-rate loans 7as the ,secretary determines appropriate7 to local governments in rural and exurban areas for covered infrastructure projects carried out in connection with the development of qualified working families housing projects4 7b7 ,covered infrastructure projects ,for purposes of this section-- 7#a7 ,in general ,the term covered infrastructure project means projects for electricity1 waters1 sewers1 local access roads1 and such other projects as the ,secretary determines appropriate4 7#b7 ,clean energy prioritization ,with respect to any infrastructure project for electricity1 the ,secretary shall give priority to clean energy projects4 7c7 ,other definitions and special rules ,terms used in this section which are also used in section #db;,a of the ,internal ,revenue ,code of #aihf shall have the same meaning when used in this section as when used in such section of such ,code4 ,requirements similar to the requirements of section #de7;b77#g7 of such ,code shall apply with respect to infrastructure projects with respect to which grants or loans are made under this section4 7d7 ,authorization of appropriations ,there are authorized to be appropriated #ajj1jjj1jjj to carry out the purposes of this section4