(a)(2). (3) Cost-of-living adjustment Subparagraph (H) of section 42(h)(3) of such Code, as amended by subsection (a)(3), is amended— (A) by striking the dollar amounts applicable to such calendar year under clauses (i) and (ii) of subparagraph (I) in clause (i) and inserting the $4,065,000 and $3.53 amounts in subparagraph (C) , (B) by striking minimum ceiling in clause (ii)(I) and inserting $4,065,000 , and (C) by striking per capita dollar in clause (ii)(II) and inserting $3.53 . (4) Effective date The amendments made by this subsection shall apply to calendar years beginning after December 31, 2022. II Reforms relating to tenant eligibility 201. Average income test (a) In general Paragraph (1) of section 42(g) of the Internal Revenue Code of 1986 is amended— (1) by striking subparagraph (A) or (B) and inserting subparagraph (A), (B), or (C) , and (2) by inserting after subparagraph (B) the following new subparagraph: (C) Average income test (i) In general The project meets the minimum requirements of this subparagraph if 40 percent or more (25 percent or more in the case of a project described in section 142(d)(6)) of the residential units in such project are both rent-restricted and occupied by individuals whose income does not exceed the imputed income limitation designated by the taxpayer with respect to the respective unit. (ii) Special rules relating to income limitation For purposes of clause (i)— (I) Designation The taxpayer shall designate the imputed income limitation of each unit taken into account under such clause. (II) Average test The average of the imputed income limitations designated under subclause (I) shall not exceed 60 percent of area median gross income. (III) 10-percent increments The designated imputed income limitation of any unit under subclause (I) shall be 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 percent, or 80 percent of area median gross income. . (b) Rules relating to next available unit Subparagraph (D) of section 42(g)(2) of the Internal Revenue Code of