Senate clears tax reform bill
Following hours of long debate reaching late into the night, the Senate passed its version of the “Tax Cuts and Jobs Act” by a partisan vote of 51-49. In addition to all Democratic Senators, Senator Bob Corker was the lone Republican Senator to vote against the bill, citing impact on the federal deficit.
The good news is that the Senate version of the bill retains the Low-Income Housing Tax Credit (LIHTC) and the tax exemption on private activity bonds, including multifamily Housing Bonds, which are essential for the production of roughly half of Housing Credit developments because they trigger the 4% credit.
The Senate bill also includes several modifications to the Housing Credit, including:
- Expand the Housing Credit general public use requirement exception to include veterans; and
- Treat rural areas as difficult development areas for purposes of receiving a basis boost. This provision is offset by reducing the maximum basis boost for all types of boost-eligible developments from 130 to 125 percent. The reduced basis boost could make some properties financially infeasible.
However, the Senate-passed bill does not include the various no-cost provisions of the Affordable Housing Credit Improvement Act,
S. 548, that were in the bill as reported by the Senate Finance Committee.
The next step is for the two chambers (House and Senate) to reconcile the differences between their bills. The House is expected to vote to proceed to a conference on Monday evening, and the industry expects negotiations to begin in earnest next week. It is also still possible that the House will forego a conference and instead vote on the Senate-passed version of the bill; however, at this point indications are that they will seek to conference their bills.
The top priority for NAHMA and industry partners is the preservation of multifamily Housing Bonds, which face risk of elimination. NAHMA will provide a NAHMAnalysis on the House and Senate bills, as well as a grassroots alert, to members next week.
Key HUD nominees advance through Committee as General Counsel Appointee remains in limbo
This week, the Senate Committee on Banking, Housing, and Urban Development
voted to advance three key HUD nominees: Brian Montgomery, of Texas, to be Assistant Secretary for Housing – Federal Housing Commissioner; Robert Hunter Kurtz, of Virginia, to be Assistant Secretary for Public and Indian Housing; and Suzanne Tufts, of New York, to be Assistant Secretary for Administration.
The nominations head to the full Senate floor next for final approval. Meanwhile, the nomination of J. Paul Compton to serve as HUD’s General Counsel has stalled following the President’s appointment in May and the Senate Banking Committee’s approval vote in July.
Spending negotiations, disaster recovery debates continue as fiscal deadline approaches
With congressional attention focused on tax reform and few working days left before the holidays, lawmakers are unlikely to complete a long-term spending package before the December 8
th deadline. Instead, legislative leaders may consider another short-term Continuing Resolution (CR) to buy more time for negotiations.
The stopgap bill under discussion would extend the current CR by an additional two weeks at Fiscal Year 2017 levels, until December 22
nd, raising the stakes around the holidays. The fiscal deadline brings urgency to other issues wrapped into the current CR, such as the debt limit and the expiring national flood insurance program.
The spending bill may also omit additional disaster recovery funding, a sticking point for lawmakers from coastal states. Testifying in a House Appropriations Subcommittee
hearing this week, Federal Emergency Management Agency (FEMA) Administrator Brock Long told Congress that the 10-year formula for calculating disaster relief funding was skewed from consecutive years without major hurricanes landfalls, leaving the recovery efforts reliant on supplemental funding bills passed by Congress. Long expressed concern that emergency appropriations bills could become “the new normal” for disaster recovery funding.
