Congressional Negotiators Closing in on Tax Extenders Bill Deal
House and Senate negotiators are working to reach agreement on tax legislation that would make permanent some of the currently temporary tax provisions and extend others for a finite period of time, potentially two years in most cases. Many of the temporary provisions have already expired, including a provision NCSHA supports that established a 9 percent minimum Housing Credit rate.
NCSHA, our Housing Credit industry partners, and HFAs from across the country have been urging tax committee members, cosponsors of Housing Credit permanent minimum rate legislation (H.R. 1142 and S. 1193), and other key members to speak to House and Senate and tax committee leaders about the need to establish permanent 9 percent and 4 percent (acquisition) Housing Credit minimum rates within the extender agreement they finally reach.
We have heard from multiple Hill sources that both House and Senate negotiators support permanence for the 9 percent Housing Credit minimum rate, though it remains unclear whether negotiators have agreed on whether to establish a 4 percent minimum rate for acquisition. The Senate Finance Committee passed legislation earlier this year that extended many expired provisions for two years, including the 9 percent Credit minimum rate, and also established the 4 percent minimum acquisition rate for two years.
Both House Ways and Means Committee Chairman Kevin Brady (R-TX) and Senate Finance Committee Chairman Orrin Hatch (R-UT) have said recently that they think reaching an agreement on a bill making some provisions permanent and extending others for two years or more is possible this year.
However, significant disagreement remains between congressional Democrats and Republicans about how to treat various tax provisions unrelated to affordable housing and whether to offset some of the overall cost of the package, which could well exceed $500 billion. These disputes and concerns are slowing progress on the legislation and could upend the entire process. Given the extent of the disputes involved, we expect negotiations to continue at least into next week, and success is far from certain. Should negotiators be unable to reach consensus, Congress would likely resort to either a two-year extension of the temporary tax provisions, retroactive to the beginning of 2015 and going through the end of 2016, or potentially a one-year retroactive tax bill for 2015 only.
We appreciate all of the efforts HFAs and others have been making to urge support from their members of Congress. Please do not let up now. Keep reaching out to your members on the tax committees, minimum rate bill cosponsors, and any other members you believe are supportive of affordable housing. Make sure they are communicating their support to House Ways and Means and Senate Finance Committee leaders and to the House and Senate leadership and telling them how important it is that Congress find agreement on and pass a package that includes permanence for the Housing Credit minimum rates. Keep us informed of what you hear, and NCSHA will continue to let you know what we learn as events unfold.