January 27, 2010

Senate tax writers are considering how to move forward on several high-priority tax items this year, including the left-over-from-last-year extenders bill to reinstate tax provisions that expired at the end of 2009, estate tax reform, the expiration this year of several major tax cuts enacted several years ago in the Bush Administration, and proposals designed to generate jobs.  The Senate may try to move some of these provisions, such as the extenders bill, separately or may combine some or all of them into larger bills.

Congressional staff tell us they continue to expect the extenders bill to contain a one-year extension of the Housing Credit Exchange program.  Last year, the House passed an extenders bill containing a one-year Exchange program extension.  The Senate seems likely to also include a one-year extension in its version of the extenders bill, but its schedule for considering the extenders bill is uncertain.

The Senate is considering whether to include other Housing Bond and Credit priorities in the jobs bill Senate leaders plan to develop over the next few weeks—including expanding the Exchange program to include 4 percent and Disaster Credits, allowing investors to “carry back” Credit investments for five years, increasing investment incentives for community banks and closely held corporations paying tax under the individual income tax rules, extending the availability of the $11 billion in Housing Bond authority enacted in the Housing and Economic Recovery Act (HERA) for an additional year, and maintaining HERA’s two-year 10 percent Housing Credit volume cap increase for an additional year in 2010.

On December 17, 15 Senators, mostly members of the Senate Finance Committee, wrote Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) a letter asking them to support the Exchange program extension and expansion to include 4 percent Credits, the five-year carryback proposal, and changes to attract new Housing Credit investors.

Please contact your Senators, especially Senate Finance Committee members, to remind them of NCSHA’s Housing Bond and Credit priorities and urge them to ask Chairman Baucus and Ranking Member Grassley to include them in the extenders bill, jobs bill, or other tax legislation the Committee considers early this year.  Be sure to describe the economic and jobs benefits to your state of these changes and how you have used your new Housing Bond and Credit recovery resources to date.