SEC. 4. INCREASE IN LOW-INCOME HOUSING TAX CREDIT 
STATE CEILING. 
(a) IN GENERAL.—Section 42(h)(3)(C) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘plus’’ 
at the end of clause (iii), by striking the period at the 
end of clause (iv) and inserting ‘‘, plus’’, and by inserting 
after clause (iv) the following: 
‘‘(v) the qualified single-family hous-
ing amount determined under subpara-
graph (J).’’. 
(b) 
QUALIFIED
SINGLE-FAMILY
HOUSING 
AMOUNT.— 
(1) IN GENERAL.—Section 42(h)(3) of the In-
ternal Revenue Code of 1986 is amended by adding 
at the end the following new subparagraph: 
‘‘(J) QUALIFIED SINGLE-FAMILY HOUSING 
AMOUNT.—The qualified single-family housing 
amount determined under this subparagraph 
for any calendar year is an amount equal to the 
sum of— 
‘‘(i) 10 percent of the amount deter-
mined under subparagraph (C)(ii) for such 
calendar year (determined after application 
of subparagraphs (H) and (I)), 
‘‘(ii) the excess (if any) of the amount 
described in clause (i) for the preceding 
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calendar year over the amounts allocated 
to projects described in paragraph (9) for 
such preceding calendar year, 
‘‘(iii) the amount allocated within the 
State (not in excess of the amount deter-
mined under this subparagraph for the 
preceding calendar year reduced by the 
amount described in clause (ii) for the sec-
ond preceding calendar year) for any 
project— 
‘‘(I) which is described in para-
graph (9) and which fails to meet the 
10 percent test under paragraph 
(1)(E)(ii) on a date after the close of 
the calendar year in which the alloca-
tion was made, 
‘‘(II) which does not become a 
qualified low-income housing project 
described in paragraph (9) within the 
period required by this section or the 
terms of the allocation, or 
‘‘(III) which is described in para-
graph (9) and with respect to which 
an allocation is cancelled by mutual 
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consent of the housing credit agency 
and the allocation recipient, plus 
‘‘(iv) the amount, if any, determined 
under subparagraph (D), applied— 
‘‘(I) 
by 
substituting 
‘unused 
qualified single-family housing carry-
over’ for ‘unused housing credit carry-
over’ in clause (i) thereof, 
‘‘(II) without regard to clause (ii) 
thereof, 
‘‘(III) by substituting ‘unused 
qualified 
single-family 
housing 
carryovers’ for ‘unused housing credit 
carryovers’ in clause (iii) thereof, and 
‘‘(IV) by substituting ‘an amount 
equal to its entire qualified single- 
family housing amount to projects de-
scribed in paragraph (9)’ for ‘entire 
State housing credit ceiling (deter-
mined without regard to amounts de-
scribed in subparagraph (C)(v))’ in 
clause (iv)(I) thereof.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 42(h)(3)(C) of such Code is 
amended by inserting ‘‘(other than amounts al-
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located from the qualified single-family housing 
amount)’’ after ‘‘the housing credit dollar 
amount previously allocated within the State’’. 
(B) Section 42(h)(3)(D) of such Code is 
amended by inserting ‘‘(determined without re-
gard to amounts described in subparagraph 
(C)(v))’’ after ‘‘entire State housing credit ceil-
ing’’. 
(c) SET ASIDE OF INCREASED AMOUNTS.—Section 
42(h) of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new paragraph: 
‘‘(9) SET ASIDE OF QUALIFIED SINGLE-FAMILY 
HOUSING AMOUNT.—The portion of the State hous-
ing credit ceiling which is equal to the qualified sin-
gle-family housing amount for any calendar year 
shall be allocated to projects consisting of 1 to 4 
dwelling units that are located in qualified census 
tracts (as defined in subsection (d)(5)(B)(i)).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to allocations made for calendar 
years beginning after the date of the enactment of this 
Act. 
Æ 
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