House Passes Housing Credit Modernization Legislation

The House of Representatives has passed H.R. 3221, The Housing & Economic Recovery Act of 2008, by a vote of 272 to 152.

The final legislation includes a section of provisions related to the Low Income Housing Tax Credit (Housing Credit) program many of which were included in the Coalitions list of legislative priorities for 2008.  A copy of the legislation is attached and the Housing Credit provisions begin on page 602 in Division C – Tax Related Provisions, Title I – Housing Tax Incentives.  Specifically, the Housing Credit provisions included in the legislation would (not an exhaustive list):

• Allow a temporary $0.20 percent per capita increase in Housing Credit Authority for 2008 and 2009 with a 10 percent increase to the small state minimum. 

   

• Exempt Housing Credit investments from the alternative minimum tax (AMT)

   

• Eliminate the Housing Credit recapture bond requirement and replace it with a reporting requirement

   

• Temporarily fix the annual Housing Credit percentage at 9 percent.

   

• Allow a 30 percent increase in eligible basis for properties determined by state allocating agencies as needing additional Housing Credits to achieve financial feasibility

   

• Provide clarification on the general public use requirement

   

   

The legislation also includes provisions designed to provide relief to Fannie Mae and Freddie Mac and provisions regarding the Community Development Block Grant program.

It is possible the Senate may pass this legislation this week.  If that occurs, without further amendment, the bill would then head to the White House for the President’s signature.  Previously the Administration had threatened to veto this legislation based on concerns with certain provisions unrelated to the Housing Credit program.  However, early today, the Administration publically dropped its veto threat of this legislation.

The Coalition will continue to provide updates as the legislation makes it way toward final enactment.

If you require additional information or have questions concerning this legislation please contact Coalition legislative counsel Jim Miller (202-282-5724 or jfmiller@winston.com) or Coalition executive director Victoria Spielman (202-282-5349 or victoria.spielman@taxcreditcoalition.org).