Repeal of qualified contract option

(a) Termination of option for certain buildings (1) In general Subclause (II) of section 42(h)(7)(E)(i) of the Internal Revenue Code of 1986, as redesignated by section 202, is amended by inserting in the case of a building described in clause (iii), before on the last day. (2) Buildings described Subparagraph (E) of section 42(h)(7) of such Code, as so redesignated, is amended by adding at the end the following new clause: (iii) Buildings described A building described in this clause is a building— (I) which received its allocation of housing credit dollar amount before January 1, 2027, or (II) in the case of a building any portion of which is financed as described in paragraph (4), and which received before January 1, 2027, under the rules of paragraphs (1) and (2) of subsection (m), a determination from the issuer of the tax-exempt bonds or the housing credit agency that the building would be eligible under the qualified allocation plan to receive an allocation of housing credit dollar amount or that the credits to be earned are necessary for financial feasibility of the project and its viability as a qualified low-income housing project throughout the credit period.. (b) Rules relating to existing projects Subparagraph (F) of section 42(h)(7) of the Internal Revenue Code of 1986, as redesignated by section 202, is amended by striking the nonlow-income portion and all that follows and inserting the nonlow-income portion and the low-income portion of the building for fair market value (determined by the housing credit agency by taking into account the rent restrictions required for the low-income portion of the building to continue to meet the standards of paragraphs (1) and (2) of subsection (g)). The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph.. (c) Conforming amendments (1) Paragraph (7) of section 42(h) of the Internal Revenue Code of 1986, as redesignated by section 202, is amended by striking subparagraph (G) and by redesignating subparagraphs (H), (I), (J), and (K) as subparagraphs (G), (H), (I), and (J), respectively. (2) Subclause (II) of section 42(h)(7)(E)(i) of such Code, as so redesignated and as amended by subsection (a), is further amended by striking subparagraph (I) and inserting subparagraph (H). (d) Technical amendment Subparagraph (I) of section 42(h)(7) of the Internal Revenue Code of 1986, as redesignated by section 202 and subsection (c), is amended by striking agreement and inserting commitment. (e) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Subsection (b) The amendments made by subsection (b) shall apply to buildings with respect to which a written request described in section 42(h)(7)(H) of the Internal Revenue Code of 1986, as redesignated by section 202 and subsection (c), is submitted after the date of the enactment of this Act.