Page:United States Statutes at Large Volume 102 Part 4.djvu/406

 102 STAT. 3376

PUBLIC LAW 100-647—NOV. 10, 1988 "(B) 1ST YEAR COMPUTATION APPLIES.—A rule similar to the rule of paragraph (2)(A) shall apply to any increase in qualified basis to which subparagraph (A) applies for the 1st year of such increase." (B) Paragraph (3) of section 42(b) of the 1986 Code is amended to read as follows: "(3) CROSS REFERENCES.— "(A) For treatment of certain rehabilitation expenditures as separate new buildings, see subsection (e). "(B) For determination of applicable percentage for increases in qualifled basis after the 1st year of the credit period, see subsection (f)(3). "(C) For authority of housing credit agency to limit applicable percentage and qualified basis which may be taken into account under this section with respect to any building, see subsection (h)(6)."

(10) Subparagraph (B) of section 42(g)(2) of the 1986 Code (defining gross rent) is amended by striking out "Federal rental assistance" and inserting in lieu thereof "rental assistance". (11) Paragraph (2) of section 42(g) of the 1986 Code is amended by adding at the end thereof the following new subparagraph: "(C) UNITS WHERE FEDERAL RENTAL ASSISTANCE IS REDUCED AS TENANT'S INCOME INCREASES.—If the gross rent with

respect to a residential unit exceeds the limitation under subparagraph (A) by reason of the fact that the income of the occupants thereof exceeds the income limitation applicable under paragraph (1), such unit shall, nevertheless, be treated as a rent-restricted unit for purposes of paragraph (1) if— "(i) a Federal rental assistance payment described in subparagraph (B)(i) is made with respect to such unit or its occupants, and "(ii) the sum of such payment and the gross rent with respect to such unit does not exceed the sum of the amount of such payment which would be made and the gross rent which would be payable with respect to such unit if— "(I) the income of the occupants thereof did not exceed the income limitation applicable under paragraph (1), and "(II) such units were rent-restricted within the meaning of subparagraph (A). The preceding sentence shall apply to any unit only if the result described in clause (ii) is required by Federal statute as of the date of the enactment of this subparagraph and as of the date the Federal rental assistance payment is made." (12) Paragraph (3) of section 42(g) of the 1986 Code is amended to read as follows: Disadvantaged

persons.

"(3) D A T E FOR MEETING REQUIREMENTS.—

"(A) IN GENERAL.—Except as otherwise provided in this paragraph, a building shall be treated as a qualified lowincome building only if the project (of which such building is a part) meets the requirements of paragraph (1) not later than the close of the 12-month period beginning on the date the building is placed in service. "(B) BUILDINGS WHICH RELY ON LATER BUILDINGS FOR QUALIFICATION.—

"(i) IN GENERAL.—In determining whether a building (hereinafter in this subparagraph referred to as the

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