|Late last night, Senate Finance Committee Chairman Orrin Hatch (R-UT) released his Modified Chairman’s Mark—the new version of the Senate tax reform legislation from which the Committee will work as it completes its mark-up this week. The Modified Chairman’s Mark, like the previous version of the legislation, preserves the Low Income Housing Tax Credit and tax-exempt private activity bonds (PABs).
In another important victory for affordable housing industry, the Modified Mark includes several provisions of the Affordable Housing Credit Improvement Act, S. 548, sponsored by the Chairman and Senator Maria Cantwell (D-WA). They would:
The Modified Mark does not include changes to the Housing Credit to maintain Credit production in a lower corporate tax rate environment. According to a Novogradac & Company analysis, lowering the corporate rate to 20 percent without corresponding modifications to the Housing Credit would reduce production by approximately 15 percent.
On the House side, Speaker Paul Ryan (R-WI) has moved up floor consideration of House tax reform legislation, H.R. 1, to begin today. He had originally intended to begin floor consideration of the bill tomorrow, but accelerated the schedule to accommodate a meeting between the House Republican Conference and President Trump, now scheduled for tomorrow morning.
In order to advance floor consideration of the bill, the House Rules Committee met last night instead of today as previously scheduled to establish a rule for debate on the bill. The Rules Committee adopted a closed rule for debate, which prohibits amendments from being offered on the floor.
During the Rules Committee meeting, Representative Randy Hultgren (R-IL), co-chair of the Municipal Finance Caucus, testified in support of his amendment to restore PABs. He told the Committee that while there is much he likes in the bill, he is concerned that not enough consideration has been given to the treatment of tax financing tools used by state and local governments, including PABs, and that private entities use PABs to contribute to the public good. He then named affordable housing as one of two sectors relying on PABs about which he is most troubled, citing NCSHA data on the loss of production under the Housing Credit and a 4 percent Housing Credit property providing supportive housing in his district as an example of the types of properties that would not be built if PABs are eliminated.