LOW-INCOME HOUSING CREDIT.

SEC. 13142. LOW-INCOME HOUSING CREDIT. (a) Permanent Extension.— 107 STAT. 438 (1) In general.— Section 42 (relating to low-income housing credit) is amended by striking subsection (o). (2) Effective date.— The amendment made by paragraph (1) shall apply to periods ending after June 30, 1992. (b) Modifications.— (1) Housing credit agency determination of reasonableness of project costs.— Subparagraph (B) of section 42(m)(2) (relating to credit allocated to building not to exceed amount necessary to assure project feasibility) is amended— (A) by striking “and” at the end of clause (ii), (B) by striking the period at the end of clause (iii) and inserting “, and”, and (C) by inserting after clause (iii) the following new clause: “(iv) the reasonableness of the developmental and operational costs of the project.” (2) Units with certain full-time students not disqualified.— Subparagraph (D) of section 42(i)(3) (defining low-income unit) is amended to read as follows: “(D) Certain students not to disqualify unit.— A unit shall not fail to be treated as a low-income unit merely because it is occupied— “(i) by an individual who is— “(I) a student and receiving assistance under title IV of the Social Security Act, or “(II) enrolled in a job training program receiving assistance under the Job Training Partnership Act or under other similar Federal, State, or local laws, or “(ii) entirely by full-time students if such students are— “(I) single parents and their children and such Sits and children are not dependents (as ed in section 152) of another individual, or “(II) married and file a joint return.” (3) Treasury waivers of certain de minimis errors and recertifications.— Subsection (g) of section 42 (relating to qualified low-income housing projects) is amended by adding at the end thereof the following new paragraph: “(8) Waiver of certain de minimis errors and recertifications.— On application by the taxpayer, the Secretary may waive— “(A) any recapture under subsection (j) in the case of any de minimis error in complying with paragraph (1), or “(B) any annual recertification of tenant income for purposes of this subsection, if the entire building is occupied by low-income tenants.” (4) Discrimination against tenants prohibited.— Section 42(h)(6)(B) (defining extended low-income housing commitment) is amended by redesignating clauses (iv) and (v) as clauses (v) and (vi) and by inserting after clause (iii) the following new clause: “(iv) which prohibits the refusal to lease to a holder of a voucher or certificate of eligibility under section 8 of the United States Housing Act of 1937 because 107 STAT. 439of the status of the prospective tenant as such a holder,”. (5) Home assistance not to result in certain buildings being federally subsidized.— Paragraph (2) of section 42(i) (relating to determination of whether building is federally subsidized) is amended by adding at the end thereof the following new subparagraph: “(E) Buildings receiving home assistance.— “(i) In general.— Assistance provided under the HOME Investment Partnerships Act (as in effect on the date of the enactment of this subparagraph) with respect to any building shall not be taken into account under subparagraph (D) if 40 percent or more of the residential units in the building are occupied by individuals whose income is 50 percent or less of area median gross income. Subsection (d)(5)(C) shall not apply to any building to which the preceding sentence applies. “(ii) Special rule for certain high-cost housing areas.— In the case of a building located in a city described in section 142(d)(6), clause (i) shall be applied by substituting ‘25 percent’ for ‘40 percent’.” (6) Effective dates.— (A) In general.— Except as provided in subparagraphs (B) and (C), the amendments made by this subsection shall apply to— (i) determinations under section 42 of the Internal Revenue Code of 1986 with respect to housing credit dollar amounts allocated from State housing credit ceilings after June 30, 1992, or (ii) buildings placed in service after June 30, 1992, to the extent paragraph (1) of section 42(h) of such Code does not apply to any building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date. (B) Waiver authority and prohibited discrimination.— The amendments made by paragraphs (3) and (4) shall take effect on the date of the enactment of this Act. (C) Home assistance.— The amendment made by paragraph (2) shall apply to periods after the date of the enactment of this Act. (c) Election To Determine Rent Limitation Based on Number of Bedrooms and Deep Rent Skewing.— (1) In the case of a building to which the amendments made by subsection (e)(1) or (n)(2) of section 7108 of the Revenue Reconciliation Act of 1989 did not apply, the taxpayer may elect to have such amendments apply to such building if the taxpayer has met the requirements of the procedures described in section 42(m)(1)(B)(iii) of the Internal Revenue Code of 1986. (2) In the case of the amendment made by such subsection (e)(i), such election shall apply only with respect to tenants first occupying any unit in the building after the date of the election. (3) In the case of the amendment made by such subsection (n)(2), such election shall apply only if rents of low-income 107 STAT. 440tenants in such building do not increase as a result of such election. (4) An election under this subsection may be made only during the 180-day period beginning on the date of the enactment of this Act and, once made, shall be irrevocable.