File: 
2011-2012 Priority Guidance Plan Comments to IRS June 1 (2).pdf

Summary

  • June 1, 2011

    Office of Associate Chief Counsel
    Internal Revenue Service
    Attn: CC:PA:LPD:PR (Notice 2011-39)
    Room 5203
    P.O. Box 7604
    Ben Franklin Station
    Washington, D.C. 20044
    VIA EMAIL to notice.comments@irscounsel.treas.gov
     
    RE: Notice 2011-39, Recommendations for 2011-2012 Guidance Plan
     
    To Whom It May Concern:
     
    Thank you for the opportunity to recommend for inclusion on the Department of Treasury/Internal Revenue Service (IRS) 2011-2012 Guidance Priority List subjects critical to effective state administration of the Low Income Housing Tax Credit (Housing Credit) program.
     
    As the Washington representative of the agencies that administer the Housing Credit in all 50 states, the District of Columbia, New York City, Puerto Rico, and the U.S. Virgin Islands, the National Council of State Housing Agencies (NCSHA) appreciates the Treasury Department’s and IRS’ expert oversight of the Housing Credit, your continued cooperative attitude toward NCSHA and state housing agencies, and your timely provision of program guidance.
     
    To support continued effective state administration of the Housing Credit, we urge you to issue the following guidance as quickly as possible.
     
    (1) Final regulations under §42 on the requirements for a qualified contract.
     
    In our comments on the proposed qualified contract regulations, NCSHA strongly supported the administrative discretion the proposed regulations gave HFAs to administer the qualified contract process.  HFA administrative discretion is essential in handling qualified contract requests and such flexibility is key to the success of the program. As more and more developments become eligible to participate in the qualified contract process, the need for these rules becomes increasingly urgent and, thus, we urge the IRS to issue final regulations in keeping with these principles as soon as possible.
     
    (2) Guidance concerning the exception under §42(d)(6) for any federally or State assisted building.
     
    The Housing and Economic Recovery Act of 2008 exempts federally- or state-assisted buildings from the 10-year prior placement in service rule under §42(d)(2)(B)(ii).  The term federally-assisted building means any building which is substantially assisted, financed or operated under section 8 of the United States Housing Act of 1937, section 221(d) (4), or 236 of the National Housing Act, Section 515 of the Housing Act of 1949 or any other housing program administered by the Department of Housing and Urban Development or by the Rural Housing Service of the Department of Agriculture. The term state-assisted building means any building which is substantially assisted, financed, or operated under any State law similar in purposes to any laws relating to the definition of federally-assisted building.  We urge the IRS to promptly issue guidance concerning how it defines “substantially” in this context, again keeping in mind the need for as much flexibility as possible.
     
    (3) Regulations concerning utility allowances under §42(g)(2)(B)(ii) for sub-metered buildings.
     
    NCSHA urges the IRS to issue final guidance concerning utility allowance calculations for Housing Credit developments that sub-meter.  In prior comments on proposed utility allowance regulations, NCSHA has expressed its appreciation that regulations generally allow for more accurate utility allowance determinations, provide greater flexibility to make such determinations, and help HFAs promote energy efficiency in Housing Credit properties.  We have also maintained that more accurate utility allowances help keep Housing Credit properties financially sustainable.  We reiterate these principles and urge the IRS to ensure that any final guidance concerning utility allowances for sub-metered buildings does not impose any unnecessary administrative burdens or complexity on HFAs.
     
    NCSHA recommends that the IRS issue guidance on the above referenced items as soon as possible this year, as well as other guidance it believes necessary for the efficient implementation of the Housing Bond and Credit programs.
     
    Thank you for this opportunity to provide input on the Department of Treasury/Internal Revenue Service 2011-2012 Priority Guidance Plan. If you have any questions, please do not hesitate to contact me.
     
    Sincerely,
    Garth Rieman
    Director, Housing Advocacy and Strategic Initiatives