‘‘(D) CERTAIN SELECTION CRITERIA PRO-
HIBITED.—The selection criteria set forth in a 
qualified allocation plan shall not include a re-
quirement of local approval or local contribu-
tions, either as a threshold qualification re-
quirement or as part of a point system to be 
considered for allocations of housing credit dol-
lar amount. 
‘‘(2) CREDIT ALLOCATED TO BUILDING NOT TO 
EXCEED AMOUNT NECESSARY TO ASSURE PROJECT 
FEASIBILITY.— 
‘‘(A) 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 feasi-
bility of the project and its viability as a quali-
fied middle-income housing project throughout 
the credit period. 
‘‘(B) AGENCY
EVALUATION.—In making 
the determination under subparagraph (A), the 
housing credit agency shall consider— 
‘‘(i) the sources and uses of funds and 
the total financing planned for the project, 
‘‘(ii) any proceeds or receipts expected 
to be generated by reason of tax benefits, 
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‘‘(iii) the percentage of the housing 
credit dollar amount used for project costs 
other than the cost of intermediaries, and 
‘‘(iv) the reasonableness of the devel-
opmental and operational costs of the 
project. 
Clause (iii) shall not be applied so as to impede 
the development of projects in hard-to-develop 
areas. Such a determination shall not be con-
strued to be a representation or warranty as to 
the feasibility or viability of the project. 
‘‘(C) DETERMINATION MADE WHEN CRED-
IT AMOUNT APPLIED FOR AND WHEN BUILDING 
PLACED IN SERVICE.— 
‘‘(i) IN
GENERAL.—A determination 
under subparagraph (A) shall be made as 
of each of the following times: 
‘‘(I) The application for the 
housing credit dollar amount. 
‘‘(II) The allocation of the hous-
ing credit dollar amount. 
‘‘(III) The date the building is 
placed in service. 
‘‘(ii) CERTIFICATION AS TO AMOUNT 
OF OTHER SUBSIDIES.—Prior to each de-
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termination under clause (i), the taxpayer 
shall certify to the housing credit agency 
the full extent of all Federal, State, and 
local subsidies which apply (or which the 
taxpayer expects to apply) with respect to 
the building. 
‘‘(m) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary or appropriate to 
carry out the purposes of this section, including— 
‘‘(1) regulations dealing with— 
‘‘(A) projects which include more than 1 
building or only a portion of a building, or 
‘‘(B) buildings which are placed in service 
in portions, 
‘‘(2) regulations providing for the application of 
this section to short taxable years, 
‘‘(3) regulations preventing the avoidance of the 
rules of this section, 
‘‘(4) regulations providing the opportunity for 
housing credit agencies to correct administrative er-
rors and omissions with respect to allocations and 
record keeping within a reasonable period after their 
discovery, taking into account the availability of reg-
ulations and other administrative guidance from the 
Secretary, and 
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‘‘(5) in consultation with the Secretary of 
Housing and Urban Development, regulations or 
guidance to promote uniform definitions and to 
streamline requirements for with respect to qualified 
middle-income buildings which receive funding from 
programs administrated by the Department of Hous-
ing and Urban Development, including programs au-
thorized by Native American Housing Assistance 
and Self-Determination Act of 1996 .’’. 
(b) TREATMENT AS PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of the Internal Revenue Code of 
1986 is amended by striking ‘‘plus’’ at the end of para-
graph (40), by striking the period at the end of paragraph 
(41) and inserting ‘‘, plus’’, and by adding at the end the 
following new paragraph: 
‘‘(42) the middle-income housing credit deter-
mined under section 42A(a).’’. 
(c) REDUCTION IN BASIS.—Section 1016(a) of the 
Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(37); 
(2) by redesignating paragraph (38) as para-
graph (39); and 
(3) by inserting after paragraph (37) the fol-
lowing new paragraph: 
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‘‘(38) to the extent provided in section 
42A(i)(8), and’’. 
(d) TREATMENT UNDER BASE EROSION MINIMUM 
TAX.—Section 59A(b)(4) of he Internal Revenue Code of 
1986 is amended by redesignating subparagraphs (B) and 
(C) as subparagraphs (C) and (D), respectively, and by 
inserting after subparagraphs (A) the following new sub-
paragraph: 
‘‘(B) the middle-income housing credit de-
termined under section 42A(a),’’. 
(e) CONFORMING AMENDMENTS RELATING TO LOW- 
INCOME HOUSING TAX CREDIT.—Section 42(n) of the In-
ternal Revenue Code of 1986 is amended— 
(1) by striking ‘‘regulations’’ in the matter pre-
ceding paragraph (1), 
(2) by inserting ‘‘regulations’’ before ‘‘dealing 
with’’ in paragraph (1), 
(3) by inserting ‘‘regulations’’ before ‘‘pro-
viding’’ in paragraphs (2) and (4), 
(4) by inserting ‘‘regulations’’ before ‘‘pre-
venting’’ in paragraph (3), 
(5) by striking ‘‘and’’at the end of paragraph 
(3), 
(6) by striking the period at the end of para-
graph (4) and inserting ‘‘, and’’, and 
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(7) by adding at the end the following new 
paragraph 
‘‘(5) in consultation with the Secretary of 
Housing and Urban Development, regulations or 
guidance to promote uniform definitions and to 
streamline requirements for with respect to qualified 
low-income buildings which receive funding from 
programs administrated by the Department of Hous-
ing and Urban Development, including programs au-
thorized by Native American Housing Assistance 
and Self-Determination Act of 1996.’’. 
(f) CONFORMING AMENDMENTS.— 
(1) Section 45L(e) of the Internal Revenue 
Code of 1986 is amended by inserting ‘‘or 42A’’ 
after ‘‘42’’. 
(2) Section 50(c)(3)(C) of such Code is amend-
ed by inserting ‘‘or 42A’’ after ‘‘42’’. 
(3) Section 55(c)(1) of such Code is amended 
by inserting ‘‘42A(j),’’ before ‘‘45(e)(11)(C)’’. 
(4) Subsections (i)(3)(C), (i)(6)(B)(i), and 
(k)(1) of section 469 of such Code are each amended 
by inserting ‘‘or 42A’’ after ‘‘42’’. 
(5) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
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amended by inserting after the item relating to sec-
tion 42 the following new item: 
‘‘Sec. 42A. Middle-income housing credit.’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to buildings placed in service after 
December 31, 2023, in taxable years ending after such 
date. 
Æ 
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