CARH’S BROADCAST E-MAIL – Legislative Update

December 16, 2015

Early this morning, the Chairmen and Ranking Members of the House and Senate Appropriations Committees and the Chairmen and Ranking Members of the House Ways and Means and Senate Finance Committees unveiled H.R 2029, the Omnibus bill and a separate tax extenders bill. The Omnibus bill is entitled, Consolidated Appropriations Act, 2016, the tax extenders legislation is entitled “Protecting Americans From Tax Hikes Act (PATH) of 2015.”

Within the next several days it is expected that both bills will be considered and hopefully pass both Chambers of Congress and then sent to the President for signature. Since the Congress was unable to pass stand-alone appropriations bills for the fiscal year which began on October 1, 2015, the government has been operating through a series of Continuing Resolutions (CR). The current CR runs through midnight tonight. Since Speaker of the House Paul Ryan has indicated that he will observe the three day rule (House members will have three days to review the legislation), another short-term bill keeping the government operating through December 22^nd will be considered and is expected to pass.

The following is a brief overview of the provisions of both bills that are important to CARH members. A more detailed analysis and report will be assembled once the legislation passes Congress and is signed by the President:

Protecting Americans from Tax Hikes Act (PATH) of 2015 will do some very positive things for the rural rental housing industry.  Most importantly, the tax legislation would permanently extend the minimum 9 percent Housing Credit rate for new construction and substantial rehabilitation. For the last couple of years, this provision has been a top priority of CARH (see recent Broadcast Emails dated  December 1, 2015; July 22, 2015; July 9, 2015). The bill did not establish a minimum 4 percent credit rate for acquisition, another CARH priority. Providing for a minimum 4 percent credit rate remains an important issue and CARH will continue to urge Congress to agree to this change. This bill would also extend the new markets tax credit for five years at $3.5 billion annually through 2019. The bill also extends bonus depreciation through 2019 (50 percent for first three years then phased down). The renewable energy production and investment credits are extended but phased down over the next five to seven years, depending on the credit. Wind facilities that begin construction before 2020 would still be eligible for a credit. Solar facilities would receive the full 30% investment tax credit if qualifying construction begins before 2020, but the credit is reduced for construction began in 2021 or 2022.

H.R. 2029, the Consolidated Appropriations bill for FY 2016, would fund the HOME program at $950 million. This level of funding is $50 million above the FY 2015 level and well above the level of $66 million that had been recommended by the Senate Transportation and Department of Housing and Urban Development (THUD) Appropriations Subcommittee earlier in the year.

The Section 521 Rental Assistance (RA) program would be funded at $1.389 billion, an increase of $217 million over the FY 2016 budget request. After the Administration had submitted its budget for FY 2016, it became apparent that the requested level would not fully fund RA contracts. The additional money will hopefully prevent a reoccurrence of the RA program running out of money at the end of the year because sufficient funding was not requested and therefore not approved by Congress. The prohibition on re-renewing contracts more than once a fiscal year that was recommended in the Administration’s FY 2015 budget and again in the budget request for FY 2016 has not been included in H.R. 2029.  A new provision has been added that will allow the Secretary to recapture RA that the agency has determined it no longer needs and then reuse those funds to help backfill contracts that were impacted as a result of the funding issues in FY 2015. In addition, there is a provision which allows $75 million to remain available until September 30, 2017, for the express purpose of re-renewing RA contracts in the event that an RA contract runs short.

If you have any questions or need any additional information, please do not hesitate to contact CARH at 703-837-9001 or carh@carh.org.