On behalf of over 1,000 affordable housing stakeholders, the ACTION Campaign commends the Senate Finance Committee for advancing legislation that would strengthen the Low-Income Housing Tax Credit through an extension of minimum credit rates. The ACTION Campaign also thanks Senators Maria Cantwell and Pat Roberts for their leadership in supporting this important provision, which will make the development of affordable housing more predictable and financially feasible.
On July 21, the Senate Finance Committee held a mark-up of legislation to extend dozens of expired tax provisions, or “tax extenders,” including the minimum 9 percent Housing Credit rate for new construction and substantial rehabilitation. The bill also establishes a minimum 4 percent rate for the acquisition of affordable housing. Both the 9 percent minimum rate and the 4 percent minimum rate for acquisitions would be available for allocations made before January 1, 2017.
The original Chairman’s Mark included a provision to extend the minimum 9 percent Housing Credit rate, which expired at the end of 2014, but no corresponding 4 percent rate. Senators Maria Cantwell (D-WA) and Pat Roberts (R-KS) were instrumental in having this provision added to the Modified Chairman’s Mark, consistent with the tax extenders package approved by the Senate Finance Committee last year.
Two other amendments were filed that would have impacted the Housing Credit, though neither were brought to a vote or included in the bill that passed out of the committee. Senators Cantwell and Roberts sponsored an amendment to establish permanent minimum 9 and 4 percent credit rates, consistent with their legislation, S. 1193. Senator Chuck Schumer (D-NY) also filed an amendment to provide disaster tax relief for communities impacted by federally declared disasters from 2012 – 2015, which would include increased Housing Credit allocations.
Chairman Hatch and many of his colleagues on the Finance Committee called for numerous tax provisions to be made permanent through comprehensive tax reform, but noted the need to advance a more limited package in the interim for the sake of expediency.
The bill was reported favorably out of committee with nearly unanimous bipartisan support. When it will advance to the Senate floor is unclear. During the markup, Senate Finance Committee Chairman Orrin Hatch (R-UT) noted that this is the first time in 20 years that a Congress began with these tax provisions already expired, and urged the full Senate to act quickly to pass the package. The same day, Senate Majority Leader Mitch McConnell (R-KY) and Senator Barbara Boxer (D-CA) announced a deal on highway funding, which could serve as a potential vehicle for tax extenders.
The timeline for consideration in the House is also uncertain. House Ways and Means Chairman Paul Ryan (R-WI) has focused his efforts on advancing several pieces of legislation making select provisions permanent, while the Senate’s package is for the most part a clean two-year extension for dozens of existing temporary provisions. The question over whether and which extenders to make permanent is what ultimately derailed the extenders negotiations at the end of 2014, resulting in legislation that only provided one year of retroactive extensions. However, the Senate’s strong bipartisan support for the extenders package approved today is an important first step in reaching agreement on this legislation.