549 
utable to any item described in clause (i)), 
or 
‘‘(iii) becoming or being the obligor 
under obligations secured by mortgages on 
real property or on interests in real prop-
erty (other than foreign currency gains at-
tributable to any item described in clause 
(i)), 
‘‘(B) gains described in section 987 attrib-
utable to a qualified business unit (as defined by 
section 989) of the real estate investment trust, 
but only if such qualified business unit meets the 
requirements under— 
‘‘(i) subsection (c)(3) (without regard 
to subparagraph (J) thereof) for the taxable 
year, and 
‘‘(ii) subsection (c)(4)(A) at the close of 
each quarter that the real estate investment 
trust has directly or indirectly held the 
qualified business unit, and 
‘‘(C) any other foreign currency gains as 
determined by the Secretary. 
‘‘(2) PASSIVE FOREIGN EXCHANGE GAINS.—For 
purposes of subsection (c)(2)(I), the term ‘passive for-
eign exchange gains’ means—
550 
‘‘(A) real estate foreign exchange gains, 
‘‘(B) foreign currency gains (as defined in 
section 988(b)(1)) which are not described in 
subparagraph (A) and which are attributable to 
any item described in subsection (c)(2) (other 
than in subparagraph (I) thereof), and 
‘‘(C) any other foreign currency gains as 
determined by the Secretary.’’. 
(c) ADDITION TO REIT HEDGING RULE.—Subpara-
graph (G) of section 856(c)(5) is amended to read as fol-
lows: 
‘‘(G) TREATMENT OF CERTAIN HEDGING IN-
STRUMENTS.—Except to the extent as determined 
by the Secretary— 
‘‘(i) any income of a real estate invest-
ment trust from a hedging transaction (as 
defined in clause (ii) or (iii) of section 
1221(b)(2)(A)) which is clearly identified 
pursuant to section 1221(a)(7), including 
gain from the sale or disposition of such a 
transaction, shall not constitute gross in-
come under paragraphs (2) and (3) to the 
extent that the transaction hedges any in-
debtedness incurred or to be incurred by the
551 
trust to acquire or carry real estate assets, 
and 
‘‘(ii) any income of a real estate in-
vestment trust from a transaction entered 
into by the trust primarily to manage risk 
of currency fluctuations with respect to any 
item described in paragraph (2) or (3), in-
cluding gain from the termination of such 
a transaction, shall not constitute gross in-
come under paragraphs (2) and (3), but 
only if such transaction is clearly identified 
as such before the close of the day on which 
it was acquired, originated, or entered into 
(or such other time as the Secretary may 
prescribe).’’. 
(d) AUTHORITY TO EXCLUDE ITEMS OF INCOME FROM 
REIT INCOME TESTS.—Section 856(c)(5) is amended by 
adding at the end the following new subparagraph: 
‘‘(H) SECRETARIAL
AUTHORITY
TO
EX-
CLUDE
OTHER
ITEMS
OF
INCOME.—The Sec-
retary is authorized to determine whether any 
item of income or gain which does not otherwise 
qualify under paragraph (2) or (3) may be con-
sidered as not constituting gross income solely 
for purposes of this part.’’.
552 
SEC. 622. REVISIONS TO REIT ASSET TESTS. 
(a) CLARIFICATION OF VALUATION TEST.—The first 
sentence 
in 
the 
matter 
following 
section 
856(c)(4)(B)(iii)(III) is amended by inserting ‘‘(including 
a discrepancy caused solely by the change in the foreign 
currency exchange rate used to value a foreign asset)’’ after 
‘‘such requirements’’. 
(b) CLARIFICATION
OF PERMISSIBLE ASSET CAT-
EGORY.—Section 856(c)(5), as amended by section 621(d), 
is amended by adding at the end the following new subpara-
graph: 
‘‘(I) CASH.—The term ‘cash’ includes for-
eign currency if the real estate investment trust 
or its qualified business unit (as defined in sec-
tion 989) uses such foreign currency as its func-
tional currency (as defined in section 985(b)).’’. 
SEC. 623. CONFORMING FOREIGN CURRENCY REVISIONS. 
(a) NET INCOME FROM FORECLOSURE PROPERTY.— 
Clause (i) of section 857(b)(4)(B) is amended to read as 
follows: 
‘‘(i) gain (including any foreign cur-
rency gain, as defined in section 988(b)(1)) 
from the sale or other disposition of fore-
closure 
property 
described 
in 
section 
1221(a)(1) and the gross income for the tax-
able year derived from foreclosure property
553 
(as defined in section 856(e)), but only to 
the extent such gross income is not described 
in (or, in the case of foreign currency gain, 
not attributable to gross income described 
in) section 856(c)(3) other than subpara-
graph (F) thereof, over’’. 
(b) 
NET
INCOME
FROM
PROHIBITED
TRANS-
ACTIONS.—Clause (i) of section 857(b)(6)(B) is amended to 
read as follows: 
‘‘(i) the term ‘net income derived from 
prohibited transactions’ means the excess of 
the gain (including any foreign currency 
gain, as defined in section 988(b)(1)) from 
prohibited transactions over the deductions 
(including any foreign currency loss, as de-
fined in section 988(b)(2)) allowed by this 
chapter which are directly connected with 
prohibited transactions;’’. 
PART 2—TAXABLE REIT SUBSIDIARIES 
SEC. 625. CONFORMING TAXABLE REIT SUBSIDIARY ASSET 
TEST. 
Section 856(c)(4)(B)(ii) is amended by striking ‘‘20 
percent’’ and inserting ‘‘25 percent’’.
554 
PART 3—DEALER SALES 
SEC. 627. HOLDING PERIOD UNDER SAFE HARBOR. 
Section 857(b)(6) (relating to income from prohibited 
transactions) is amended— 
(1) by striking ‘‘4 years’’ in subparagraphs 
(C)(i), (C)(iv), and (D)(i) and inserting ‘‘2 years’’, 
(2) by striking ‘‘4-year period’’ in subpara-
graphs (C)(ii), (D)(ii), and (D)(iii) and inserting ‘‘2- 
year period’’, and 
(3) by striking ‘‘real estate asset’’and all that fol-
lows through ‘‘if’’ in the matter preceding clause (i) 
of subparagraphs (C) and (D), respectively, and in-
serting ‘‘real estate asset (as defined in section 
856(c)(5)(B)) and which is described in section 
1221(a)(1) if’’. 
SEC. 628. DETERMINING VALUE OF SALES UNDER SAFE 
HARBOR. 
Section 857(b)(6) is amended— 
(1) by striking the semicolon at the end of sub-
paragraph (C)(iii) and inserting ‘‘, or (III) the fair 
market value of property (other than sales of fore-
closure property or sales to which section 1033 ap-
plies) sold during the taxable year does not exceed 10 
percent of the fair market value of all of the assets of 
the trust as of the beginning of the taxable year;’’, and
559 
(2) The amendment made by section 621(c) shall 
apply to transactions entered into after the date of the 
enactment of this Act. 
(3) The amendment made by section 621(d) shall 
apply after the date of the enactment of this Act. 
(c) CONFORMING FOREIGN CURRENCY REVISIONS.— 
(1) The amendment made by section 623(a) shall 
apply to gains recognized after the date of the enact-
ment of this Act. 
(2) The amendment made by section 623(b) shall 
apply to gains and deductions recognized after the 
date of the enactment of this Act. 
(d) DEALER SALES.—The amendments made by part 
3 shall apply to sales made after the date of the enactment 
of this Act. 
Subtitle C—Revenue Provisions 
SEC. 641. BROKER REPORTING OF CUSTOMER’S BASIS IN 
SECURITIES TRANSACTIONS. 
(a) IN GENERAL.— 
(1) BROKER REPORTING FOR SECURITIES TRANS-
ACTIONS.—Section 6045 (relating to returns of bro-
kers) is amended by adding at the end the following 
new subsection: 
‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE 
CASE OF SECURITIES TRANSACTIONS, ETC.—
560 
‘‘(1) IN GENERAL.—If a broker is otherwise re-
quired to make a return under subsection (a) with re-
spect to the gross proceeds of the sale of a covered se-
curity, the broker shall include in such return the in-
formation described in paragraph (2). 
‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 
‘‘(A) IN
GENERAL.—The information re-
quired under paragraph (1) to be shown on a re-
turn with respect to a covered security of a cus-
tomer shall include the customer’s adjusted basis 
in such security and whether any gain or loss 
with respect to such security is long-term or 
short-term (within the meaning of section 1222). 
‘‘(B) 
DETERMINATION
OF
ADJUSTED 
BASIS.—For purposes of subparagraph (A)— 
‘‘(i) IN GENERAL.—The customer’s ad-
justed basis shall be determined— 
‘‘(I) in the case of any security 
(other than any stock for which an av-
erage basis method is permissible 
under section 1012), in accordance 
with the first-in first-out method unless 
the customer notifies the broker by 
means of making an adequate identi-
561 
fication of the stock sold or transferred, 
and 
‘‘(II) in the case of any stock for 
which an average basis method is per-
missible under section 1012, in accord-
ance with the broker’s default method 
unless the customer notifies the broker 
that he elects another acceptable meth-
od under section 1012 with respect to 
the account in which such stock is held. 
‘‘(ii) EXCEPTION FOR WASH SALES.— 
Except as otherwise provided by the Sec-
retary, the customer’s adjusted basis shall be 
determined without regard to section 1091 
(relating to loss from wash sales of stock or 
securities) unless the transactions occur in 
the same account with respect to identical 
securities. 
‘‘(3) COVERED SECURITY.—For purposes of this 
subsection— 
‘‘(A) IN GENERAL.—The term ‘covered secu-
rity’ means any specified security acquired on or 
after the applicable date if such security—
562 
‘‘(i) was acquired through a trans-
action in the account in which such security 
is held, or 
‘‘(ii) was transferred to such account 
from an account in which such security was 
a covered security, but only if the broker re-
ceived a statement under section 6045A 
with respect to the transfer. 
‘‘(B) 
SPECIFIED
SECURITY.—The 
term 
‘specified security’ means— 
‘‘(i) any share of stock in a corpora-
tion, 
‘‘(ii) any note, bond, debenture, or 
other evidence of indebtedness, 
‘‘(iii) any commodity, or contract or 
derivative with respect to such commodity, 
if the Secretary determines that adjusted 
basis reporting is appropriate for purposes 
of this subsection, and 
‘‘(iv) any other financial instrument 
with respect to which the Secretary deter-
mines that adjusted basis reporting is ap-
propriate for purposes of this subsection. 
‘‘(C) APPLICABLE DATE.—The term ‘appli-
cable date’ means—
563 
‘‘(i) January 1, 2010, in the case of 
any specified security which is stock in a 
corporation (other than any stock described 
in clause (ii)), 
‘‘(ii) January 1, 2011, in the case of 
any stock for which an average basis meth-
od is permissible under section 1012, and 
‘‘(iii) January 1, 2012, or such later 
date determined by the Secretary in the case 
of any other specified security. 
‘‘(4) TREATMENT OF S CORPORATIONS.—In the 
case of the sale of a covered security acquired by an 
S corporation (other than a financial institution) 
after December 31, 2011, such S corporation shall be 
treated in the same manner as a partnership for pur-
poses of this section. 
‘‘(5) SPECIAL RULES FOR SHORT SALES.—In the 
case of a short sale, reporting under this section shall 
be made for the year in which such sale is closed.’’. 
(2) BROKER INFORMATION REQUIRED WITH RE-
SPECT TO OPTIONS.—Section 6045, as amended by 
subsection (a), is amended by adding at the end the 
following new subsection: 
‘‘(h) APPLICATION TO OPTIONS ON SECURITIES.—
564 
‘‘(1) EXERCISE
OF
OPTION.—For purposes of 
this section, if a covered security is acquired or dis-
posed of pursuant to the exercise of an option that 
was granted or acquired in the same account as the 
covered security, the amount received with respect to 
the grant or paid with respect to the acquisition of 
such option shall be treated as an adjustment to gross 
proceeds or as an adjustment to basis, as the case 
may be. 
‘‘(2) LAPSE OR CLOSING TRANSACTION.—In the 
case of the lapse (or closing transaction (as defined in 
section 1234(b)(2)(A))) of an option on a specified se-
curity or the exercise of a cash-settled option on a 
specified security, reporting under subsections (a) and 
(g) with respect to such option shall be made for the 
calendar year which includes the date of such lapse, 
closing transaction, or exercise. 
‘‘(3) PROSPECTIVE
APPLICATION.—Paragraphs 
(1) and (2) shall not apply to any option which is 
granted or acquired before January 1, 2012. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the terms ‘covered security’ and ‘specified se-
curity’ shall have the meanings given such terms in 
subsection (g)(3).’’.
565 
(3) EXTENSION
OF
PERIOD
FOR
STATEMENTS 
SENT TO CUSTOMERS.— 
(A) IN GENERAL.—Subsection (b) of section 
6045 is amended by striking ‘‘January 31’’ and 
inserting ‘‘February 15’’. 
(B) STATEMENTS RELATED TO SUBSTITUTE 
PAYMENTS.—Subsection (d) of section 6045 is 
amended— 
(i) by striking ‘‘at such time and’’, and 
(ii) by inserting after ‘‘other item.’’ the 
following new sentence: ‘‘The written state-
ment required under the preceding sentence 
shall be furnished on or before February 15 
of the year following the calendar year in 
which the payment was made.’’. 
(C) OTHER
STATEMENTS.—Subsection (b) 
of section 6045 is amended by adding at the end 
the following: ‘‘In the case of a consolidated re-
porting statement (as defined in regulations) 
with respect to any account, any statement 
which would otherwise be required to be fur-
nished on or before January 31 of a calendar 
year with respect to any item reportable to the 
taxpayer shall instead be required to be fur-
nished on or before February 15 of such calendar
566 
year if furnished with such consolidated report-
ing statement.’’. 
(b) DETERMINATION OF BASIS OF CERTAIN SECURI-
TIES ON ACCOUNT BY ACCOUNT OR AVERAGE BASIS METH-
OD.—Section 1012 (relating to basis of property–cost) is 
amended— 
(1) by striking ‘‘The basis of property’’ and in-
serting the following: 
‘‘(a) IN GENERAL.—The basis of property’’, 
(2) by striking ‘‘The cost of real property’’ and 
inserting the following: 
‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ESTATE 
TAXES.—The cost of real property’’, and 
(3) by adding at the end the following new sub-
sections: 
‘‘(c) DETERMINATIONS BY ACCOUNT.— 
‘‘(1) IN GENERAL.—In the case of the sale, ex-
change, or other disposition of a specified security on 
or after the applicable date, the conventions pre-
scribed by regulations under this section shall be ap-
plied on an account by account basis. 
‘‘(2) APPLICATION TO OPEN-END FUNDS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any stock in an open-end 
fund acquired before January 1, 2011, shall be
567 
treated as a separate account from any such 
stock acquired on or after such date. 
‘‘(B) ELECTION
BY
OPEN-END
FUND
FOR 
TREATMENT AS SINGLE ACCOUNT.—If an open- 
end fund elects to have this subparagraph apply 
with respect to one or more of its stockholders— 
‘‘(i) subparagraph (A) shall not apply 
with respect to any stock in such fund held 
by such stockholders, and 
‘‘(ii) all stock in such fund which is 
held by such stockholders shall be treated as 
covered 
securities 
described 
in 
section 
6045(g)(3) without regard to the date of the 
acquisition of such stock. 
A rule similar to the rule of the preceding sen-
tence shall apply with respect to a broker holding 
stock in an open-end fund as a nominee. 
‘‘(3) DEFINITIONS.—For purposes of this sec-
tion— 
‘‘(A) OPEN-END FUND.—The term ‘open-end 
fund’ means a regulated investment company (as 
defined in section 851) which is offering for sale 
or has outstanding any redeemable security of 
which it is the issuer. Any stock which is traded
568 
on an established securities exchange shall not be 
treated as stock in an open-end fund. 
‘‘(B) SPECIFIED
SECURITY; 
APPLICABLE 
DATE.—The terms ‘specified security’ and ‘appli-
cable date’ shall have the meaning given such 
terms in section 6045(g). 
‘‘(d) AVERAGE BASIS FOR STOCK ACQUIRED PURSU-
ANT TO A DIVIDEND REINVESTMENT PLAN.— 
‘‘(1) IN GENERAL.—In the case of any stock ac-
quired after December 31, 2010, in connection with a 
dividend reinvestment plan, the basis of such stock 
while held as part of such plan shall be determined 
using one of the methods which may be used for deter-
mining the basis of stock in an open-end fund. 
‘‘(2) TREATMENT AFTER TRANSFER.—In the case 
of the transfer to another account of stock to which 
paragraph (1) applies, such stock shall have a cost 
basis in such other account equal to its basis in the 
dividend reinvestment plan immediately before such 
transfer (properly adjusted for any fees or other 
charges taken into account in connection with such 
transfer). 
‘‘(3) 
SEPARATE
ACCOUNTS; 
ELECTION
FOR 
TREATMENT AS SINGLE ACCOUNT.—Rules similar to
569 
the rules of subsection (c)(2) shall apply for purposes 
of this subsection. 
‘‘(4) DIVIDEND REINVESTMENT PLAN.—For pur-
poses of this subsection— 
‘‘(A) IN GENERAL.—The term ‘dividend re-
investment plan’ means any arrangement under 
which dividends on any stock are reinvested in 
stock identical to the stock with respect to which 
the dividends are paid. 
‘‘(B) INITIAL STOCK ACQUISITION TREATED 
AS
ACQUIRED
IN
CONNECTION
WITH
PLAN.— 
Stock shall be treated as acquired in connection 
with a dividend reinvestment plan if such stock 
is acquired pursuant to such plan or if the divi-
dends paid on such stock are subject to such 
plan.’’. 
(c) INFORMATION
BY TRANSFERORS TO AID BRO-
KERS.— 
(1) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61 is amended by inserting after 
section 6045 the following new section:
583 
(i) by striking ‘‘Notwithstanding’’ and 
inserting ‘‘Except as provided in subsection 
(b) and notwithstanding’’; and 
(ii) by redesignating clauses (a) and 
(b) as clauses (A) and (B), respectively; and 
(B) by striking ‘‘As used in this section— 
’’; 
(2) in paragraph (c) (relating to a definition of 
‘‘actual cost’’)— 
(A) in clause (i), by redesignating clauses 
(1) and (2) as clauses (I) and (II), respectively; 
and 
(B) in clause (ii), by redesignating clauses 
(1) and (2) as clauses (I) and (II), respectively; 
(3) by redesignating paragraphs (a), (b), and (c) 
as paragraphs (1), (2), and (3), respectively; 
(4) by inserting before paragraph (1) (as so re-
designated by paragraph (3) of this subsection) the 
following: 
‘‘(b) EXEMPTION FOR CERTAIN PROJECTS ASSISTED 
WITH LOW-INCOME HOUSING TAX CREDIT.—In the case of 
any mortgage insured under any provision of this title that 
is executed in connection with the construction, rehabilita-
tion, purchase, or refinancing of a multifamily housing 
project for which equity provided through any low-income
584 
housing tax credit pursuant to Section 42 of the Internal 
Revenue Code of 1986 (26 U.S.C. 42), if the Secretary deter-
mines at the time of issuance of the firm commitment for 
insurance that the ratio of the loan proceeds to the actual 
cost of the project is less than 80 percent, subsection (a) 
of this section shall not apply. 
‘‘(c) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply:’’; and 
(5) by inserting ‘‘(a) REQUIREMENT.—’’ after 
‘‘227.’’. 
(c) OTHER PROVISIONS REGARDING TREATMENT OF 
MORTGAGES COVERING TAX CREDIT PROJECTS.—Title II 
of the National Housing Act is amended by inserting after 
section 227 (12 U.S.C. 1715r) the following new section: 
‘‘SEC. 228. TREATMENT OF MORTGAGES COVERING TAX 
CREDIT PROJECTS. 
‘‘(a) DEFINITION.—For purposes of this section, the 
term ‘insured mortgage covering a tax credit project’ means 
a mortgage insured under any provision of this title that 
is executed in connection with the construction, rehabilita-
tion, purchase, or refinancing of a multifamily housing 
project for which equity provided through any low-income 
housing tax credit pursuant to section 42 of the Internal 
Revenue Code of 1986 (26 U.S.C. 42).
585 
‘‘(b) ACCEPTANCE OF LETTERS OF CREDIT.—In the 
case of an insured mortgage covering a tax credit project, 
the Secretary may not require the escrowing of equity pro-
vided by the sale of any low-income housing tax credits for 
the project pursuant to Section 42 of the Internal Revenue 
Code of 1986, or any other form of security, such as a letter 
of credit. 
‘‘(c) ASSET MANAGEMENT REQUIREMENTS.—In the 
case of an insured mortgage covering a tax credit project 
for which project the applicable tax credit allocating agency 
is causing to be performed periodic inspections in compli-
ance with the requirements of section 42 of the Internal 
Revenue Code of 1986, such project shall be exempt from 
requirements imposed by the Secretary regarding periodic 
inspections of the property by the mortgagee. To the extent 
that other compliance monitoring is being performed with 
respect to such a project by such an allocating agency pur-
suant to such section 42, the Secretary shall, to the extent 
that the Secretary determines such monitoring is sufficient 
to ensure compliance with any requirements established by 
the Secretary, accept such agency’s evidence of compliance 
for purposes of determining compliance with the Secretary’s 
requirements. 
‘‘(d) STREAMLINED PROCESSING PILOT PROGRAM.—
586 
‘‘(1) IN GENERAL.—The Secretary shall establish 
a pilot program to demonstrate the effectiveness of 
streamlining the review process, which shall include 
all applications for mortgage insurance under any 
provision of this title for mortgages executed in con-
nection with the construction, rehabilitation, pur-
chase, or refinancing of a multifamily housing project 
for which equity provided through any low-income 
housing tax credit pursuant to section 42 of the Inter-
nal Revenue Code of 1986. The Secretary shall issue 
instructions for implementing the pilot program 
under this subsection not later than the expiration of 
the 180-day period beginning upon the date of the en-
actment of the Housing Tax Credit Coordination Act 
of 2008. 
‘‘(2) REQUIREMENTS.—Such pilot program shall 
provide for— 
‘‘(A) the Secretary to appoint designated 
underwriters, who shall be responsible for review-
ing such mortgage insurance applications and 
making determinations regarding the eligibility 
of such applications for such mortgage insurance 
in lieu of the processing functions regarding such 
applications that are otherwise performed by
587 
other employees of the Department of Housing 
and Urban Development; 
‘‘(B) submission of applications for such 
mortgage insurance by mortgagees who have pre-
viously been expressly approved by the Secretary; 
and 
‘‘(C) determinations regarding the eligi-
bility of such applications for such mortgage in-
surance to be made by the chief underwriter pur-
suant to requirements prescribed by the Sec-
retary, which shall include requiring submission 
of reports regarding applications of proposed 
mortgagees by third-party entities expressly ap-
proved by the chief underwriter.’’. 
SEC. 655. OTHER HUD PROGRAMS. 
(a) SECTION 8 ASSISTANCE.— 
(1) PHA PROJECT-BASED ASSISTANCE.—Section 
8(o)(13) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(o)(13)) is amended— 
(A) in subparagraph (D)(i)— 
(i) by striking ‘‘building’’ and insert-
ing ‘‘project’’; and 
(ii) by adding at the end the following: 
‘‘For purposes of this subparagraph, the 
term ‘project’ means a single building, mul-
588 
tiple contiguous buildings, or multiple 
buildings on contiguous parcels of land.’’; 
(B) in the first sentence of subparagraph 
(F), by striking ‘‘10 years’’ and inserting ‘‘15 
years’’; 
(C) In subparagraph (G)— 
(i) by inserting after the period at the 
end of the first sentence the following: ‘‘Such 
contract may, at the election of the public 
housing agency and the owner of the struc-
ture, specify that such contract shall be ex-
tended for renewal terms of up to 15 years 
each, if the agency makes the determination 
required by this subparagraph and the 
owner is in compliance with the terms of 
the contract.’’; and 
(ii) by adding at the end the following: 
‘‘A public housing agency may agree to 
enter into such a contract at the time it en-
ters into the initial agreement for a housing 
assistance payment contract or at any time 
thereafter that is before the expiration of the 
housing assistance payment contract.’’; 
(D) in subparagraph (H), by inserting be-
fore the period at the end of the first sentence the
589 
following: ‘‘, except that in the case of a contract 
unit that has been allocated low-income housing 
tax credits and for which the rent limitation 
pursuant to such section 42 is less than the 
amount that would otherwise be permitted under 
this subparagraph, the rent for such unit may, 
in the sole discretion of a public housing agency, 
be established at the higher section 8 rent, subject 
only to paragraph (10)(A)’’; 
(E) in subparagraph (I)(i), by inserting be-
fore the semicolon the following: ‘‘, except that 
the contract may provide that the maximum rent 
permitted for a dwelling unit shall not be less 
than the initial rent for the dwelling unit under 
the initial housing assistance payments contract 
covering the unit’’; and 
(F) by adding at the end the following new 
subparagraphs: 
‘‘(L) USE IN COOPERATIVE HOUSING AND 
ELEVATOR BUILDINGS.—A public housing agency 
may enter into a housing assistance payments 
contract under this paragraph with respect to— 
‘‘(i) dwelling units in cooperative hous-
ing; and
590 
‘‘(ii) notwithstanding subsection (c), 
dwelling units in a high-rise elevator 
project, including such a project that is oc-
cupied by families with children, without 
review and approval of the contract by the 
Secretary. 
‘‘(M) REVIEWS.— 
‘‘(i) SUBSIDY
LAYERING.—A subsidy 
layering review in accordance with section 
102(d) of the Department of Housing and 
Urban Development Reform Act of 1989 (42 
U.S.C. 3545(d)) shall not be required for as-
sistance under this paragraph in the case of 
a housing assistance payments contract for 
an existing structure, or if a subsidy 
layering review has been conducted by the 
applicable State or local agency. 
‘‘(ii) 
ENVIRONMENTAL
REVIEW.—A 
public housing agency shall not be required 
to undertake any environmental review be-
fore entering into a housing assistance pay-
ments contract under this paragraph for an 
existing structure, except to the extent such 
a review is otherwise required by law or 
regulation.’’.
591 
(2) VOUCHER
PROGRAM
RENT
REASONABLE-
NESS.—Section 8(o)(10) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f(o)(10)) is amended by 
adding at the end the following new subparagraph; 
‘‘(F) TAX CREDIT PROJECTS.—In the case 
of a dwelling unit receiving tax credits pursuant 
to section 42 of the Internal Revenue Code of 
1986 or for which assistance is provided under 
subtitle A of title II of the Cranston Gonzalez 
National Affordable Housing Act of 1990, for 
which a housing assistance contract not subject 
to paragraph (13) of this subsection is estab-
lished, rent reasonableness shall be determined as 
otherwise provided by this paragraph, except 
that— 
‘‘(i) comparison with rent for units in 
the private, unassisted local market shall 
not be required if the rent is equal to or less 
than the rent for other comparable units re-
ceiving such tax credits or assistance in the 
project that are not occupied by families as-
sisted with tenant-based assistance under 
this subsection; and
592 
‘‘(ii) the rent shall not be considered 
reasonable for purposes of this paragraph if 
it exceeds the greater of— 
‘‘(I) the rents charged for other 
comparable units receiving such tax 
credits or assistance in the project that 
are not occupied by families assisted 
with tenant-based assistance under this 
subsection; and 
‘‘(II) the payment standard estab-
lished by the public housing agency for 
a unit of the size involved.’’. 
(b) SECTION 202 HOUSING FOR ELDERLY PERSONS.— 
Subsection (f) of section 202 of the Housing Act of 1959 
(12 U.S.C. 1701q(f)) is amended— 
(1) by striking ‘‘SELECTION CRITERIA.—’’ and 
inserting ‘‘INITIAL SELECTION CRITERIA AND PROC-
ESSING.—(1) SELECTION CRITERIA.—’’; 
(2) by redesignating paragraphs (1) through (7) 
as subparagraphs (A) through (G), respectively; and 
(3) by adding at the end the following new para-
graph: 
‘‘(2) DELEGATED PROCESSING.— 
‘‘(A) In issuing a capital advance under this 
subsection for any project for which financing for the
593 
purposes described in the last two sentences of sub-
section (b) is provided by a combination of a capital 
advance under subsection (c)(1) and sources other 
than this section, within 30 days of award of the cap-
ital advance, the Secretary shall delegate review and 
processing of such projects to a State or local housing 
agency that— 
‘‘(i) is in geographic proximity to the prop-
erty; 
‘‘(ii) has demonstrated experience in and 
capacity for underwriting multifamily housing 
loans that provide housing and supportive serv-
ices; 
‘‘(iii) may or may not be providing low-in-
come housing tax credits in combination with 
the capital advance under this section, and 
‘‘(iv) agrees to issue a firm commitment 
within 12 months of delegation. 
‘‘(B) The Secretary shall retain the authority to 
process capital advances in cases in which no State 
or local housing agency has applied to provide dele-
gated processing pursuant to this paragraph or no 
such agency has entered into an agreement with the 
Secretary to serve as a delegated processing agency.
596 
(2) PROJECT-BASED RENTAL ASSISTANCE CON-
TRACTS.—Section 478(a) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11405a(a)) is 
amended by inserting before the period at the end the 
following: ‘‘; except that, in the case of any project for 
which equity is provided through any low-income 
housing tax credit pursuant to section 42 of the Inter-
nal Revenue Code of 1986 (26 U.S.C. 42), if an ex-
penditure of such amount for each unit (including the 
prorated share of such work) is required to make the 
structure decent, safe, and sanitary, and the owner 
agrees to reach initial closing on permanent financ-
ing from such other sources within two years and 
agrees to carry out the rehabilitation with resources 
other than assistance under this subtitle within 60 
months of notification of grant approval, the contract 
shall be for a term of 10 years (except that such pe-
riod may be extended by up to 1 year by the Sec-
retary, which extension shall be granted unless the 
Secretary determines that the sponsor is primarily re-
sponsible for the failure to meet such deadline)’’. 
(d) DATA COLLECTION ON TENANTS OF HOUSING TAX 
CREDIT PROJECTS.—Title I of the United States Housing 
Act of 1937 (42 U.S.C. 1437 et seq.) is amended by adding 
at the end the following new section: