Senate Bill a Missed Opportunity for GSE Reform
Legislation that emerged along party lines from the Senate Banking Committee last week fails to present an appropriate regulatory framework that strengthens and safeguards the financial health of the housing GSEs (Fannie Mae, Freddie Mac and the Federal Home Loans) while preserving their vital housing mission. As currently written, Senate bill S. 190 would require Fannie Mae and Freddie Mac to sharply reduce their investment holdings – a move that could disrupt the mortgage markets and greatly harm the housing finance system. The measure also does not include an affordable housing fund for Fannie Mae and Freddie Mac. However, an amendment offered by Sen. Rick Santorum (R-PA) to strengthen their affordable housing goals was accepted by a voice vote.

Before the panel voted on S. 190, NAHB sent a letter to all committee members urging them to oppose the bill because it fails to adequately address the nation’s housing concerns. After the panel approved the bill, NAHB sent a similar letter to the full Senate voicing the association’s opposition to the legislation.

The 11-9 partisan split in committee votes accentuated serious reservations about the bill, which even some of its supporters expressed before casting their ballots. Committee Republicans and Democrats indicated an interest in working together to find consensus on the bill, though several voiced concern that the two sides were so far apart on some aspects of reform --- specifically portfolio limits --- that it may not be feasible to produce a bipartisan bill this year. NAHB will continue to work with the committee during the August congressional recess on possible consensus GSE regulatory reform legislation. NAHB will also continue educating Senators and staff who are not on the committee about industry opposition to S.190. For more details, see our story in Nation’s Building News, or contact Greg Brown or Scott Meyer at 800-368-5242, x8470.

Association Health Plans Bill Sails Through House
The House last week passed H.R. 525, the "Small Business Health Fairness Act," by a vote of 263-165. To underscore the importance of this issue to home builders and the nation’s small businesses, NAHB designated consideration of the measure as a key vote and focused considerable attention on securing support from moderate and conservative Democrats. Ultimately, 36 Democrats voted in favor of the legislation, which would enable small businesses to offer better and more affordable health insurance to their employees. We are now urging the Senate to follow up with passage of companion bill S. 545.  To view the legislation, click here and type H.R. 525 or S. 545 in the box in the upper left hand corner. For more information, contact Jenna Morgan Hamilton at x8470. [return to top]

Congress Approves Residential Energy Tax Credits
Ending years of deadlock, Congress last week approved a comprehensive energy bill (H.R. 6) that includes energy tax credits for new and existing homes as well as multifamily properties. President Bush is expected to sign the measure into law shortly. NAHB worked aggressively to lobby for inclusion of the home energy efficiency tax credits in the final legislative package.

The legislation will provide:
• A $2,000 tax credit to builders for the construction of a new home that is at least 50% more energy-efficient than a home built under the standards of the 2003 International Energy Conservation Code.
• A consumer tax credit up to $500 for 10% of the cost of a qualified remodeling project that improves energy efficiency in an existing home. Eligible improvements must meet prescriptive criteria in the 2000 IECC.
• A $1.80 per square foot commercial property deduction for rental housing that is at least 50% more efficient than buildings constructed to the American Society of Heating, Refrigerating and Air-Conditioning Engineers 90.1-2001 standard.

In an effort to keep the overall tax package within tight budgetary constraints, amendments in conference tightened restrictions on the home energy provisions.  However, the new law has created a congressional marker for home energy efficiency tax credits, and NAHB will continue to work with Congress to expand and improve upon the provisions in H.R. 6. To read the legislation, click here and enter H.R. 6 in the box at the upper left. For more information, contact Allen Segal at x8470. [return to top]

Lawmakers Approve Highway Bill
Congress approved a compromise transportation reauthorization bill, TEA-LU, (H.R. 3 - H. Rept. 109-203) before lawmakers adjourned for their month-long August congressional recess. The bill will renew funding and policy for highways, public transportation and road safety aid through fiscal 2009. The highway deal authorizes $286 billion in transportation funding, $2 billion more than the President Bush originally requested and the House passed, but $9 billion less than the funding level passed by the Senate. NAHB was successful in lobbying conference committee members to strip an onerous land use provision offered by Rep. Earl Blumenauer (D-OR), which had originally been included in the House version of the bill. In stripping the Blumenauer language, NAHB was able to successfully insert language encouraging private involvement in land use planning, as well as encouraging private sector investments in transportation planning. This change will increase opportunities for builders to be involved in the road development and planning process. President Bush is expected to sign the measure into law shortly. To view the legislation, click here and type the bill number in the box in the upper left hand corner. For more information, contact Kevin Schwalb at x8470. [return to top]

Interior Appropriations Bill Awaits President’s Signature
Congress approved the Interior and Environment Appropriations bill last week and the spending bill is now awaiting the President’s signature. Of note to builders, the legislation provides $7.8 billion in funding for the Environmental Protection Agency. EPA environmental programs received $2.4 billion. The bill also designates $1.4 billion for the National Forest System, $265 million in funding for Endangered Species Act provisions and $115 million for federal land acquisition. The Senate will continue floor consideration of its seven remaining fiscal 2006 appropriations bills when it returns in September. Having completed its fiscal 2006 appropriations work, the House is now awaiting Senate action in order to complete conference reports on the spending measures. For more information, contact Jenna Morgan Hamilton at x8470. [return to top]

House Panel Examines Terrorism Risk Insurance Act
The House Financial Services Subcommittee on Capital Markets, Insurance and GSEs, chaired by Rep. Richard Baker (R-LA), held a hearing last week on the Terrorism Risk Insurance Act (TRIA) and the future of terrorism insurance. Chairman Baker and other members of the subcommittee agreed that TRIA is necessary in the short-term; but citing the high level of profitability in the insurance industry, lawmakers said that the federal backstop cannot remain in place permanently. Current law is due to expire at year-end. NAHB continues to work with members of Congress and its industry coalition partners to ensure that TRIA is extended in the best form to meet the needs of the home building and commercial development industries. For more information, contact Greg Brown at x8470. [return to top]

Senate to Seek Vote on Estate Tax Repeal in September
Senate Majority Leader Bill Frist (R-TN) last week filed a cloture motion to end debate on H.R. 8, estate tax repeal legislation passed by the House in April. Frist intends to hold the cloture vote in September. Proponents of full and permanent repeal of the estate tax do not have the 60 votes necessary to defeat a filibuster. However, supporters hope the cloture vote will spur discussions on a compromise. Senator Jon Kyl (R-AZ) is floating a new compromise that would create a full exemption on the first $7 million ($3.5 million for single filers) of an estate and a 15% long-term capital gains tax on any value above that level. The exemption would be indexed for inflation after 2010. NAHB continues to work with our business coalition partners to push for full and permanent repeal of the estate tax.  To view H.R. 8, click here and type the bill in the box in the upper left hand corner. For more information, contact Jim Tobin at x8470. [return to top]

Washington Update to Return in September
Editor’s Note: The House and Senate will be out of session until September for the congressional August recess. The Washington Update will not publish during this time. [return to top]