SECTION 1. PERMANENT EXTENSION AND MODIFICATION OF LOW-INCOME HOUSING 
              TAX CREDIT.

    (a) Permanent Extension.--
            (1) In general.--Section 42 of the Internal Revenue Code of 
        1986 (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 after June 30, 1992.
    (b) Modifications.--
            (1) Carryforward rules.--
                    (A) In general.--Clause (ii) of section 42(h)(3)(D) 
                (relating to unused housing credit carryovers allocated 
                among certain States) is amended by striking ``the 
                excess'' and all that follows and inserting ``the 
                excess (if any) of the unused State housing credit 
                ceiling for the year preceding such year over the 
                aggregate housing credit dollar amount allocated for 
                such year.''
                    (B) Conforming amendment.--The second sentence of 
                section 42(h)(3)(C) (relating to State housing credit 
                ceiling) is amended by striking ``clauses (i) and 
                (iii)'' and inserting ``clauses (i) through (iv)''.
                    (C) De minimis exception for qualification rule.--
                Section 42(h)(3)(D)(iv) (defining qualified State) is 
                amended by adding at the end the following new flush 
                sentence:
                ``For purposes of subclause (I), unallocated amounts 
                from a State's housing credit ceiling for the preceding 
                calendar year which do not exceed 1 percent of such 
                ceiling shall be disregarded.''
            (2) 10-year anti-churning rule waiver expanded.--Clause 
        (ii) of section 42(d)(6)(B) (defining federally assisted 
        building) is amended by inserting ``, 221(d)(4),'' after 
        ``221(d)(3)''.
            (3) 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.''
            (4) 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 parents and children 
                                are not dependents (as defined in 
                                section 152) of another individual, or
                                    ``(II) married and file a joint 
                                return.''
            (5) 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.''
            (6) Basis of community service areas included in adjusted 
        basis.--Paragraph (4) of section 42(d) (relating to special 
        rules relating to determination of adjusted basis) is amended--
                    (A) by striking ``subparagraph (B)'' in 
                subparagraph (A) and inserting ``subparagraphs (B) and 
                (C)'',
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D), and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) Basis of property in community service areas 
                included.--The adjusted basis of any building located 
                in a qualified census tract shall be determined by 
                taking into account the adjusted basis of property (of 
                a character subject to the allowance for depreciation) 
                used in functionally related and subordinate community 
                activity facilities if--
                            ``(i) such facilities are designed to serve 
                        individuals meeting the income requirements of 
                        subsection (g)(1)(B) and employees of the 
                        qualified low-income housing project of which 
                        the building is a part, and
                            ``(ii) not more than 20 percent of the 
                        aggregate eligible basis of all buildings in 
                        such project is attributable to the aggregate 
                        basis of such facilities.
                Such facilities the aggregate basis of which is more 
                than 20 percent of such aggregate eligible basis shall 
                not be disqualified under clause (ii), if not more than 
                20 percent of such aggregate eligible basis claimed by 
                the taxpayer is attributable to such facilities.''
            (7) Application of at-risk rules.--
                    (A) Certified historic structures included.--
                Paragraph (1) of section 42(k) (relating to application 
                of at-risk rules) is amended by inserting ``(and, for 
                purposes of computing the credit under section 
                47(a)(2), the basis of any building subject to such 
                credit which is part of a qualified low-income housing 
                project)'' after ``building''.
                    (B) Qualified nonprofit lenders excluded.--
                Subparagraph (A) of section 42(k)(2) (relating to 
                special rules for determining qualified person) is 
                amended by inserting ``which is not a qualified person 
                (as defined in section 49(a)(1)(D)(iv))'' after 
                ``subsection (h)(5))''.
            (8) 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 of the 
                        status of the prospective tenant as such a 
                        holder,''.
            (9) 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) Carryforward rules.--The amendments made by 
                paragraph (1) shall apply to calendar years beginning 
                after December 31, 1992.
                    (C) Waiver authority and prohibited 
                discrimination.--The amendments made by paragraphs (2), 
                (5), and (8) shall take effect on the date of the 
                enactment of this Act.
    (c) Election To Determine Rent Limitation Based on Number of 
Bedrooms.--In the case of a building to which the amendments made by 
section 7108(e)(1) of the Revenue Reconciliation Act of 1989 did not 
apply, the taxpayer may elect to have such amendments apply to such 
building but only with respect to tenants first occupying any unit in 
the building after the date of the election, and 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. Such an election 
may be made only during the 180 day period beginning on the date of the 
enactment of this Act. Once made, the election shall be irrevocable.
Output: Amends the Internal Revenue Code to make the low-income housing credit permanent. 
Modifies provisions concerning unused housing credit carryovers by States to allow States to carry over more unused credits from year to year. 
Provides that a unit shall not fail to be treated as low-income because it is occupied by students or persons enrolled in job training programs under the Job Training Partnership Act. 
Authorizes the Secretary of the Treasury to waive:  (1) any recapture of credit (required to be included in tax) in the case of any de minimis error in complying with tests for qualified low-income housing projects; or (2) any annual recertification of tenant income if the entire building is occupied by low-income tenants. 
Determines the adjusted basis of any building (for purposes of the low-income housing credit) by taking into account the adjusted basis of the property used in community activity facilities if: (1) such facilities are designed to serve individuals meeting income requirements for the housing project; and (2) not more than 20 percent of the aggregate eligible basis of all buildings in the project is attributable to the aggregate basis of such facilities. 
Applies at-risk rules to low-income housing credit property that also qualifies for the historic site rehabilitation credit and to qualified lenders. 
Adds conditions prohibiting discrimination against Section 8 tenants for purposes of meeting extended low-income housing commitments required to receive credits.