Tax Bill with Housing Credit Provisions Remains Stalled
As Congress takes its July 4th recess, we wanted to give you an update on H.R. 7024, the Tax Relief for American Families and Workers Act of 2024. As you will recall, this bill contains our priority housing credit provisions. It passed the House in late January with strong bipartisan support but remains stalled in the Senate largely due to Republican opposition.
While Senate Majority Leader Chuck Schumer (D-NY) and Finance Committee Chairman Ron Wyden (D-OR) continue to look for a path forward on H.R. 7024, there is growing concern that time is running out for the tax bill. Congress will be out of session for all of August and October to campaign for the November elections, leaving very little time for the Senate to process bills without an agreement on amendments and the amount of time for bills to be considered. To date, it appears unlikely that Majority Leader Schumer and Minority Leader Mitch McConnell (R-KY) can reach such an agreement on H.R. 7024.
We continue to look for every opportunity to move our housing credit provisions. To that end, we need your help contacting Senate Democrats in your state or where you have properties and asking them to urge Senator Schumer to proceed with a vote on H.R. 7024 as soon as possible, either on its own or as part of another legislative vehicle. We understand he has commented that he may bring up the tax bill for a vote sometime after the Senate returns on July 8th from its current two-week recess.
Our champion, Senator Maria Cantwell (D-WA), is also exploring a potential legislative opportunity to pair the housing provisions with bipartisan trade provisions. She mentioned this approach at our May Affordable Housing Symposium, which we hosted with the Affordable Housing Tax Credit Coalition. We are in close communication with Senator Cantwell and her staff, and pending a scheduled vote on the tax bill, we await her decision on moving something separately.
Tax-writing Committees Prepare for 2025 Tax Reform
Meanwhile, the tax-writing committees continue to ramp up education and preparation efforts in anticipation of major tax legislation in 2025. Ways and Means Committee Republicans are participating on “tax teams” to review provisions from the 2017 Tax Cuts and Jobs Act (TCJA) scheduled to expire after 2025. The teams are expected to consider other tax measures as well. Two of the teams – the Community Development team and the Rural America team – are examining issues with respect to the Low-Income Housing Tax Credit (LIHTC).
The Ways and Means Committee Republicans are soliciting comments from interest groups and the public, so we will be back to you soon requesting submissions to the Community Development tax team in support of expanding the LIHTC. We will provide talking points and information on submission logistics. Submissions are due by October 15th.
Ways and Means Committee Chairman Jason Smith (R-MO) has indicated that he wants to consider tax reform legislation in early 2025 should the Republicans retain the House. Ranking Member Richie Neal (D-MA) has been meeting with Committee Democrats to gear up for negotiating a tax bill in 2025. On the Senate side, Finance Committee Chairman Wyden is meeting with his Committee Democrats, both individually and as a group, to discuss their approach to tax reform, while Ranking Member Mike Crapo (R-ID) has organized “working groups” to review TCJA provisions.
Much depends on the outcome of the elections as to how or when a 2025 tax reform package will take shape, but there are challenges no matter which party controls the White House, Senate, and House of Representatives.
House Begins Consideration of Transportation-HUD Spending Bill
Following the August recess, Congress will once again face a September 30th deadline to fund the government. While work has begun on Fiscal Year (FY) 2025 spending bills, Congress most certainly will need to pass a short-term funding bill (continuing resolution) to avoid a government shutdown. The House Appropriations Subcommittee on Transportation, Housing and Urban Development marked up its spending bill on June 27th. The legislation, favorably reported to the full committee, provides $64.8 billion for HUD, which is $5.2 billion below the FY 2024 enacted level. The HOME Investment Partnerships program was funded at $500 million, which is $750 million below the FY 2024 enacted level.
During the markup, Representative Rosa DeLauro (D-CT), the Ranking Member of the full Appropriations Committee, expressed her concern about the HUD funding levels in the bill and the impact they will have on affordable housing production. We, too, are very concerned with the direction the appropriations process is taking in the House as the Republican majority is looking to significantly cut spending from all departments other than Defense, Homeland Security, and Veterans Affairs.