this paragraph, the converted private activity bond amount with respect to any State for any calendar year shall be 60 percent of the amount elected by— (i) the State agency that is an issuer of qualified mortgage bonds (as defined in section 143) that is designated by the governor of the State under this subparagraph for such year, or (ii) if no such agency exists, the neighborhood homes credit agency of the State. (B) Reduction of private activity bond ceiling The State ceiling under section 146(d)(1) shall be reduced by the amount elected under subparagraph (A). (4) Portion of state credit ceiling for certain projects involving qualified nonprofit organizations Rules similar to the rules of section 42(h)(5) shall apply. (h) Responsibilities of neighborhood homes credit agencies (1) In general Notwithstanding subsection (g), the State neighborhood homes credit dollar amount shall be zero for a calendar year unless the neighborhood homes credit agency of the State— (A) allocates such amount pursuant to a qualified allocation plan of the neighborhood homes credit agency, (B) allocates not more than 20 percent of such amount for the previous year to projects with respect to residences in census tracts under subsection (e)(1)(B) or (e)(2), (C) promulgates standards with respect to reasonable qualified development costs, (D) promulgates standards with respect to construction quality, and (E) submits to the Secretary (at such time and in such manner as the Secretary may prescribe) an annual report specifying— (i) the amount of the neighborhood homes credits allocated to each qualified project for the previous year, and (ii) such other information as the Secretary may require. (2) Qualified allocation plan For purposes of this paragraph, the term qualified allocation plan means any plan which— (A) sets forth the selection criteria to be used to prioritize qualified projects for allocations of State neighborhood homes credit dollar amounts, including— (i) the need for new or substantially rehabilitated owner-occupied