Senate Finance Committee Approves Minimum LIHTC Rates
On July 21, the Senate Finance Committee held a mark-up of legislation to extend dozens of expired tax provisions, or “tax extenders.” The committee approved the Bill to Extend Certain Expired Tax Provisions, which would extend the minimum 9 percent Housing Credit rate for new construction and substantial rehabilitation, and establish a minimum 4 percent rate for the acquisition of affordable housing, for allocations made before Jan. 1, 2017. The original Chairman’s Mark included a provision to extend the minimum 9 percent Housing Credit rate, which expired at the end of 2014, but no corresponding 4 percent rate.
The bill also extends a provision whereby any military basic housing allowance received by an active member of the military is not considered income for purposes of calculating whether an individual qualifies as a low-income tenant for the low-income housing tax credit program. The provision expired at the end of 2014. The proposal would continue this treatment for two additional years. A two-year extension of this provision is estimated to cost $42 million over 10 years.
The bill was reported favorably out of committee with nearly unanimous bipartisan support. When it will advance to the Senate floor is unclear. Senate Finance Committee Chairman Orrin Hatch (R-UT) raised the issue during the mark-up that this is the first time in 20 years that a Congress began with these tax provisions already expired, and urged the full Senate to act quickly.
The timeline for consideration in the House is also uncertain. House Ways and Means Chairman Paul Ryan (R-WI) has been focused on an extenders package that would include permanent extensions of several provisions, while the Senate’s package is for the most part a clean two-year extension.