Tax Panel Floats Plan That Would Sink Housing
NAHB is sounding the alarm on federal tax reform proposals that were submitted to the Treasury Secretary on Nov. 1 by the President’s Advisory Panel on Federal Tax Reform. Deriding the proposed overhaul of the nation's tax code as "the biggest tax hike for home owners ever proposed," NAHB Executive Vice President and CEO Jerry Howard appeared on CNBC and other media outlets immediately following release of the report. Among other changes, the panel suggests replacing the all-important mortgage interest deduction with a limited home credit equal to 15% of the interest paid on a principal residence. The ceiling on the mortgage amount used for calculating the credit would be based on regional housing costs, which range from $227,000 to $412,000. The plan also calls for eliminating deductions for state and local taxes, as well as interest deductions currently permitted for home equity loans and second homes. It would also eliminate the Low Income Housing Tax Credit, one of the few tools available to construct or renovate affordable rental housing.

The tax advisory panel was created by President Bush at the beginning of the year to recommend ways to reform the federal income tax code to make it simpler, fair and pro-growth. The panel’s recommendation will now be reviewed by the Administration, and if embraced by President Bush could be included in his State of the Union address in January.

Individual reactions from bipartisan lawmakers in the House and Senate have ranged from lukewarm to outright hostile. NAHB Executive Vice President Bill Killmer participated in a Capitol Hill press conference last week with Reps. Katherine Harris (R-FL) and Robert Wexler (D-FL). The lawmakers said the proposal would have a devastating affect on our nation’s housing market. House Ways and Means member Jerry Weller (R-IL) is scheduled to join NAHB President David Wilson, President-elect David Pressly and CEO Jerry Howard in a Nov. 10 tele-news conference to discuss the potential impact on the housing market.

NAHB has posted a number of resources online that should help explain the far-reaching implications of the tax commission’s recommendations. Also be sure to check the Nov. 7 edition of Nation's Building News Online for a more thorough analysis. For more information, contact NAHB tax counsel Jim Tobin at 1-800-368-5242, x8470.

House Passes Property Rights Bill
Last week, the House passed H.R. 4128, the "Private Property Rights Protection Act of 2005," by an overwhelmingly bipartisan vote of 376 to 38.  The legislation is intended to protect private property rights by blocking states from taking advantage of the Kelo ruling. The court verdict, which was widely criticized by both Republicans and Democrats in Congress, upheld a jurisdiction’s ability to take non-blighted property from one private owner to allow another private owner to develop a project with an entirely different use for purposes of economic development. Some NAHB members have expressed concern that, while eminent domain can be a valuable tool for rejuvenating neighborhoods, the Supreme Court’s latest interpretation could be construed to allow the taking of private land that is earmarked for housing in favor of a commercial use that would bring in greater tax revenues.

The House bill attempts to remedy this situation by withholding for two years all federal economic development funds from states and localities that use economic development as a rationale for property seizures. The bill also bars the federal government from using eminent domain powers for purposes of economic development. Consistent with NAHB policy, it continues to allow eminent domain to be used for traditional projects, such as roads, schools and utilities. Moreover, the House did pass an NAHB-supported amendment to ensure that eminent domain can be used to redevelop brownfields.

That said, more work is needed to ensure that local and state governments can continue to use eminent domain to rejuvenate blighted areas, and NAHB intends to work closely with the Senate on this issue. While a companion bill (S. 1313) has been introduced in that chamber by Sen. John Cornyn (R-TX), as yet there is no set date for its consideration. Meanwhile, approximately 34 states are also considering changes to their laws in response to the Kelo decision. To view the House bill, click here and type H.R. 4128 in the box in the upper left hand corner. For more information, contact J.P. Delmore at x8470. [return to top]

Senator Enzi Introduces Health Plan Measure
Senator Mike Enzi (R-WY), chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP), introduced his version of small business health insurance relief last week.  S. 1955, the "Health Insurance Marketplace Modernization and Affordability Act of 2005," incorporates several provisions of S. 406, the "Small Business Health Fairness Act," which NAHB supports. However, it also takes a dramatic departure from the Association Health Plan concept within S. 406. Senator Enzi's bill would not allow associations and small businesses the same federal ERISA pre-emption currently enjoyed by labor unions and large corporations.  Instead, it would create a complex system of mandated benefit requirements that would largely be overseen by state governments. Additionally, the legislation would allow health insurers the same opportunity to offer the coverage without working with associations, leading many to wonder whether insurers would bother partnering with associations to offer plans if they could just as easily circumvent them and go directly to their members. 

Enzi has indicated that he would like to markup his legislation in the HELP Committee prior to the Thanksgiving break. NAHB will continue to work with Senator Enzi, as well as Senators Olympia Snowe (R-ME) and Jim Talent (R-MO), the chief sponsors of S. 406, to push for the best possible health plan legislation. In addition, we will also be sharing our concerns with HELP committee members. To view the bills, click here and type their numbers in the box in the upper left hand corner. For more information, contact Jenna Morgan Hamilton at x8470. [return to top]

Agriculture Appropriations Clears Congress
The House and Senate last week cleared the fiscal 2006 Agriculture Appropriations Conference Report, and President Bush signed the measure into law.  Of interest to NAHB, the bill provides: $1.14 billion for Section 502 Direct Loans; $3.68 billion for Section 502 Guaranteed loans; $100 million for Section 515 Rental Housing Direct loans; $100 million for Section 538 Rental Housing Guaranteed loans; and $653 million for Section 521 Rental Assistance grants.  Lawmakers are hopeful they will complete work on all remaining appropriations bills prior to Nov. 18, when the continuing resolution to fund the federal government expires. For more information, contact Jenna Morgan Hamilton at x8470. [return to top]