A Cloudy Picture: Advocates Continue to Hope for Extension of LIHTC, NMTC Provisions in the Wake of Election Upheaval

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Advocates are hopeful that before concluding the current lame-duck session, Congress will approve a tax extenders package that revives at least the minimum 9% credit rate for the 70% present value low-income housing tax credit, and reauthorizes the new markets tax credit.

However, the jarring recent national election results – giving Republicans full control of Congress starting in January – create even greater uncertainty about what will happen in the lame-duck session and in 2015 regarding many different pieces of important legislation: tax extenders, tax reform, housing finance reform, and appropriations for housing programs. Republicans will take over the chairmanships of Senate committees in the new 114th Congress that starts in January, and a number of House committees will have new chairmen as well (see list at bottom for  expected chairmen of key Congressional committees that affect housing and economic/community development).

“I don’t think anyone knows with any near certainty” whether Congress will approve extenders legislation in the lame-duck session renewing the minimum 9% housing credit rate, according to Barbara Thompson, Executive Director of the National Council of State Housing Agencies, whose member agencies allocate housing credits and issue tax-exempt housing bonds. “We think [extenders] is probably one of the items they will get to late in the lame duck. It’s our sense there’s still a possibility of that occurring.”

She pointed out, however, that the current House and Senate have displayed two very different approaches. In April, the Senate Finance Committee approved a bill that would provide for temporary, mostly two-year extensions of 50-odd tax incentives. Meanwhile, the House Ways and Means Committee has approved several bills that would permanently extend just a few tax incentives, such as the research and development tax credit. This followed the framework set out by Committee Chairman Dave Camp’s tax reform discussion draft, which proposed to make only a few tax incentives permanent, including the 9% housing credit, while repealing most other current tax breaks (e.g., tax-exempt bonds, 4% housing credits, historic tax credits, new markets tax credits).

The minimum 9% credit rate and authorization of the new markets tax credit program lapsed at year-end 2013. Pending bills in Congress would make permanent the minimum 9% housing credit rate and establish a new minimum 4% rate for the 30% present value housing credit (for non-bond financed acquisition costs), and reauthorize the new markets tax credit program.

Advocates for both programs have redoubled their efforts in the lame-duck session, which began November 12, to press for Congressional extensions of the LIHTC and NMTC provisions. “We will fight right up until the bell rings on this lame-duck session to get a bill that moves and to be sure that we’re in it,” says Thompson.

On November 18, Affordable Rental Housing ACTION, an umbrella coalition of more than 900 organizations including NCSHA, sent a new letter to members of Congress urging them in the lame-duck sessions to approve legislation to make the minimum 9% and 4% housing credit rates permanent, or at least authorize them for two years.

Some lawmakers favor approval of one- or two-year extensions of expired or expiring tax provisions, and set the stage for consideration of broad tax reform legislation in 2015.

Changes in Committee Posts

The recent election results, handing Republicans control of the Senate and adding to their majority margin in the House, will cause a change in the chairmanship of many Congressional committees in 2015. These shifts will guide what types of legislation get considered – or not considered – during the year, as well as the timing of bills.

House Speaker John Boehner (R-Ohio) has said that tax reform will be a priority in the 114th Congress. Tax reform has also been endorsed by Senate Majority Leader Mitch McConnell (R-Ky.) and President Obama, although GOP leaders favor both corporate and individual tax reform while the president has called only for corporate tax reform.

The action regarding tax reform will be heavily dictated by Rep. Paul Ryan (R-Wisc.), expected to be elected as the new chairman of the House Ways and Means Committee, which would write such legislation. Meanwhile, the Senate Finance Committee also will have a new chairman, expected to be Sen. Orrin Hatch (R-Utah). According to Thompson, Hatch has been supportive of the LIHTC program in the past. She said neither Hatch nor Ryan have taken any actions or expressed any views in opposition to the LIHTC or housing bond programs.

Housing Finance Reform, Appropriations

The odds appear to be stacked against passage of housing finance reform legislation in 2015, given the lack of enthusiasm for the bipartisan proposal crafted this year by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Michael Crapo (R-Idaho), and the striking differences of some House proposals, several of which call for an end to Fannie Mae and Freddie Mac and curtailed government support in the mortgage market.

One must-pass item of business for the current lame-duck Congress is approval of continued funding for the federal government beyond December 11, when the existing continuing resolution expires. Possibilities include passage of a short-term stopgap spending bill or a measure to provide funding through September 30, 2015, the end of the current fiscal year.

NCSHA’s Garth Rieman suggested that one possibility may be passage by Congress in the lame-duck session of a single bill that includes both tax extenders and continuing appropriations.

Rieman felt that the Republican-controlled Congress in 2015 is unlikely to make additional deep cuts in funding to federal housing programs.

Key Leaders in Congress in 2015 (1st session of 114th Congress)

House of Representatives

Speaker: Rep. John Boehner (R-Ohio) (Reelected)


Appropriations Committee Rep. Harold Rogers (R-Ky.)*

Financial Services Committee Rep. Jeb Hensarling (R-Texas)*

Ways and Means Committee Rep. Paul Ryan (R-Wisc.)*


Majority Leader: Sen. Mitch McConnell (R-Ky.) (Elected)


Appropriations Committee Sen. Thad Cochran (R-Miss.)*

Banking Committee Sen. Michael Crapo (R-Idaho)*

Finance Committee Sen. Orrin Hatch (R-Utah)*

* Expected to be elected chairman in January 2015 when the 114th Congress organizes.