Congress Passes Inflation Reduction Act; Additional Cosponsors Needed for AHCIA

After struggling for months to move a budget reconciliation bill, congressional Democrats finally pushed a compromise package over the finish line. The Inflation Reduction Act (Act) provides incentives to promote energy security and address climate change, extends expanded Affordable Care Act premium subsidies, and reduces the deficit. The bill passed the Senate on August 7th by a party line vote of 51-50, with Vice President Kamala Harris casting the tie-breaking vote. The House returned from its recess on August 12th and passed the legislation by a party line vote of 220-207. President Biden stated he will sign the bill into law.

The bill is primarily paid for by a new 15 percent minimum tax on adjusted book income of certain large corporations; an excise tax on stock buybacks; allowing Medicare to negotiate prescription drug prices; and by increasing funding for the Internal Revenue Service to improve tax compliance. Of particular note for our industry, the bill would allow corporations to use general business tax credits (including the LIHTC) to offset up to 75 percent of the combined regular and minimum tax.

There are no provisions from the Affordable Housing Credit Improvement Act (AHCIA) in the final bill, but we are appreciative of the extraordinary effort made by Senator Maria Cantwell (D-WA) and Representative Suzan DelBene (D-WA) to advance our LIHTC agenda. Their strong commitment and direct contact with Democratic Leadership during the deliberations on the Inflation Reduction Act will improve prospects for inclusion of AHCIA provisions in an appropriate legislative vehicle later this year.

As our House and Senate champions work toward that end, we need to help them by securing additional cosponsors for the AHCIA (H.R. 2573 and S. 1136). Strong bipartisan support for the AHCIA will demonstrate that building and preserving affordable housing is a congressional priority. If your elected officials (or the elected officials in states and districts where you have properties) are not cosponsors, please reach out and ask them to sign on to the AHCIA. Current House cosponsors can be found here and current Senate cosponsors can be found here. If your elected officials have already cosponsored, please thank them for their support and encourage them to ask congressional leaders to make the LIHTC improvements a priority for inclusion in a legislative vehicle that can be enacted into law.

Members of Congress will be back in their states and districts through September 5th and again in the first and last weeks of October. If their schedules permit, please take the opportunity to show them (or their staffers) a property. A visit can make a real difference in garnering support for improving and enhancing the affordable housing credit program. Please let us know if you have questions or need advocacy materials, and thank you for all you do.