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NAHB CEO Howard Testifies on GSE Reform
Jerry Howard, NAHB CEO and Executive Vice President, testified on March 15 before the Congress on several solutions to enhance H.R. 1427, the Federal Housing Finance Reform Act of 2007. The legislation would strengthen the regulation of the housing government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Howard outlined NAHB’s position on six key elements of GSE reform: capital requirements, portfolio limits, affordable housing requirements, program approval, conforming loan limits and regulatory structure. NAHB’s proposals would ensure the ongoing financial safety and soundness of the GSEs, while preserving the vitality of their government-sponsored status for the fulfillment of their vital housing mission.
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Jerry Howard | Of note, House Financial Services Committee Chairman Barney Frank (D-Mass.), the chief sponsor of H.R. 1427, agreed with NAHB’s position that portfolio criteria language should be clear to balance priorities of safety and soundness and housing mission so that an overzealous regulator could not interpret the law to require massive portfolio cuts. NAHB said that the regulator should have the latitude to adjust minimum capital requirements, but that they should be returned to the statutory amount once the problem is resolved. On the proposed Affordable Housing Fund, Howard told lawmakers it is important that the allocation of affordable housing fund resources occur on a playing field that is level for both for-profit and non-profit sponsors to maximize the effectiveness of any new housing production programs.
Others testifying at the hearing included: Robert Steel, Under Secretary for Domestic Finance, U.S. Treasury; James Lockhart, Director, Office of Federal Housing Enterprise Oversight; Carter Cornick, Department of Housing and Urban Development; Dan Mudd, President and CEO, Fannie Mae; and Richard Syron, Chairman and CEO, Freddie Mac.
The House panel is expected to mark up the bill at the end of the month and NAHB will continue to meet with lawmakers and Hill staff to address our concerns. For more information, read NAHB’s press release or contact Scott Meyer at 800-368-5242, x8144.
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Exit Tax Bill Introduced in House
Reps. Artur Davis (D-Ala.) and Jim Ramstad (R-Minn.) this week introduced H.R. 1491, the Affordable Housing Preservation Tax Relief Act of 2007. The legislation would provide relief from recapture or "exit" taxes at the time of sale of an affordable housing property in exchange for the property remaining affordable for 30 years. The bill is identical to to H.R. 3715, exit tax legislation introduced in the 109th Congress. For the past several years, NAHB has worked with a large coalition of housing organizations on this legislation, which is critical to the long-term preservation of affordable housing. Our focus now turns to introduction of a companion bill in the Senate as well as securing a budget score from the Joint Committee on Taxation (JCT) on the overall proposal. This JCT score will be critical to the viability of the legislation, especially under new congressional pay-as-you-go or “pay-go” rules that require offsets for any proposal that is a cost to the U.S. Treasury. For more information, e-mail Greg Brown or call him at 800-368-5242, x8421.
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Builders Submit Statement at Katrina Hearing
The House Ways and Mean Subcommittee on Oversight, chaired by Rep. John Lewis (D-Ga.), held a hearing this week on housing tax incentives allocated for redevelopment of affordable housing along the Gulf Coast as part of the Gulf Opportunity Zone Act of 2005 (GO Zone Act). The bill was passed following the devastation caused by Hurricanes Katrina and Rita. Specifically, the hearing focused on whether the current statutory placed-in-service (PIS) deadlines for using those incentives are hampering redevelopment efforts. For example, the Congress allocated substantial additional Low Income Housing Tax Credits as part of the GO Zone Act, but properties constructed using those credits must be placed-in-service (typically defined as having received their certificate of occupancy) by Dec. 31, 2008. Under normal circumstances, such a deadline would be reasonable. However, the development environment on the Gulf Coast -- in terms of insurance costs, available labor, cost and availability of building materials and delays in critical local regulatory support (e.g. permitting) --has dramatically slowed down the rebuilding process.
Witnesses for the hearing were limited to the executive directors of the state housing finance agencies from Mississippi and Louisiana, the entities that are allocating the GO Zone housing tax incentives. Both testified that an extension of the PIS deadlines to 2010 would be critical to ensuring the housing tax incentives best serve their intended purpose to redevelop affordable housing in the GO Zone. NAHB submitted a statement for the record detailing the experiences of builders on the Gulf Coast and the major obstacles they face in attempting to rebuild in this environment. Ways and Means Chairman Charles Rangel (D-N.Y.) plans to markup legislation to extend the PIS deadlines before the Easter congressional recess in April. It is still unclear if and when the Senate Finance Committee will consider such legislation. NAHB continues to weigh-in with Senate Finance Committee staff on the problems with the PIS deadlines in the GO Zone legislation and the need for action. For more information, e-mail Greg Brown or call him at 800-368-5242, x8421.
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House and Senate Unveil Military Housing Legislation
This week saw the introduction of legislation in both the House and Senate to provide greater access to affordable housing for enlisted military personnel. Senator Pat Roberts (R-Kan.) introduced S. 839, the Military Access to Housing Act of 2007, legislation that amends the Internal Revenue Code of 1986 to exclude amounts received as a military basic housing allowance (BAH) from consideration as income for purposes of the Low Income Housing Tax Credit (LIHTC) and qualified residential rental projects. Rep. Jerry Moran (R-Kan.) this week introduced House companion bill H.R. 1481. These bills respond to a great demand for affordable rental housing for enlisted military personnel around the country, especially in light of the ongoing Base Realignment and Closure (BRAC) process which is shifting large numbers of military personnel to communities that lack the inventory of affordable market-rate units to respond to the influx.
Currently, enlisted military personnel (typically in the E-2 to E-5 range) are disqualified from LIHTC housing because the BAH is considered income, unlike Section 8 housing subsidies distributed by the Department of Housing and Urban Development. NAHB is now focused on building co-sponsorship for both bills and raising their profile with the respective tax-writing committees. To view the legislation, click here and type the respective bill numbers in the box in the center screen. For more information, e-mail Greg Brown or call him at 800-368-5242, x8421.
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House Panel Examines Revenue Raising Options
The House Ways and Means Committee held a hearing this week to examine revenue raising provisions of H.R. 2, the Jobs And Growth Tax Relief Reconciliation Act of 2003, a Senate Finance Committee-passed bill providing tax breaks to offset an increase in the minimum wage. Such revenue-raising provisions are required under newly adopted “pay-go” rules. H.R. 2 contains more than $8 billion in small business tax breaks, but has been widely criticized in the business community for its revenue raising provisions, especially those limiting deductions for convertible debt instruments. NAHB joined several business organizations in opposing a specific element of the Senate bill that would deny tax deductions for certain fines and penalties. For example, builders who reach a settlement with the Occupational Safety and Health Administration (OSHA) under current law are able to deduct that settlement amount but they would be unable to do so under the proposed Senate measure.
The House has repeatedly opposed the Senate revenue raisers contained in H.R. 2 and during the hearing committee members of both parties as well as witnesses representing several business sectors criticized the Senate bill. In its version of the legislation, the Ways and Means Committee focused on using a prohibition on asset-shifting among individuals to pay for a much-smaller $1.3 billion small business tax package. The entire process of developing the two bills has been extremely contentious and a conference to negotiate their differences has not yet begun. NAHB continues to weigh-in with its coalition partners against revenue-raising provisions that harm small business. Click here to view H.R. 2. For more information, e-mail Greg Brown or call him at 800-368-5242, x8421.
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House Approves Energy Bill
By a vote of 395-1, the House this week overwhelmingtly approved H.R. 85, the Energy Technology Transfer Act, legislation that would promote energy efficiency incentives for technology development in housing and in metals manufacturing. Sponsored by Rep. Judy Biggert (R-Ill.) , the bill would provide grants to non-profit research institutions or universities to perform R&D on energy efficiency technologies and to conduct demonstration projects for both site-built and manufactured housing. There is no action in the Senate yet on this measure.
The House Energy and Commerce Committee’s Subcommittee on Energy & Air Quality, chaired by Rep. Rick Boucher (D-Va.), also held two hearings this week on climate change. Executives from the automobile industry testified before the subcommittee on Wednesday, followed by state and local leaders testifying on Thursday. Both reported on their efforts to address greenhouse gas (GHG) emissions. The witnesses from the state and local panel primarily discussed their experience using regional cap-and-trade programs and other initiatives that are successful at the non-federal level. Notably, the mayor of Charlotte, N.C., suggested that anti-sprawl measures and green building would be an important part of any legislative or regulatory strategy to address climate change in the region.
House Speaker Nancy Pelosi has recently signaled her intent to switch gears on legislation addressing climate change. Rather than pushing for a national cap-and-trade program for GHG emissions, she has asked committee leaders to focus more on increasing energy efficiency in all sectors, including homes and buildings. NAHB continues to monitor these developments and legislation on climate change and energy efficiency on the Hill. For more information, e-mail Elizabeth Odina or call her at 800-368-5242, x8570.
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State and Local: South Dakota Adopts NOR Legislation
On Monday, March 5, South Dakota Governor Mike Rounds signed notice and opportunity to repair (NOR) legislation into state law, making it the 31st state to adopt such a measure. The legislation requires a home owner to notify a builder of an alleged construction defect before commencing legal action. The builder then has 30 days to remedy the alleged construction defect. Last year, Minnesota, Oklahoma and Wisconsin enacted NOR statutes. Additionally, Virginia strengthened its existing opportunity to repair law by including condominiums and condo conversions in the NOR process. For more information, e-mail Alex Strong or call him at 800-368-5242, x8279.
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NAHB Affiliate Membership Impacts BUILD-PAC Solicitation Efforts
Recent NAHB changes to the Affiliate membership category have great potential to impact BUILD-PAC’s fundraising efforts. Federal law prohibits BUILD-PAC or an “agent” of BUILD-PAC (Trustee, Executive Officer, etc.) to solicit anyone who is not an individual NAHB member. For solicitation purposes, the Federal Election Commission requires a member of a trade association to satisfy one of two key criteria in order to be solicited for its PAC:
- Pay dues to the organization
- Have a vote on the organization’s board of directors
As defined in the NAHB bylaws, the Affiliate member category satisfies the aforementioned criteria. Growth in the Affiliate category, therefore, broadens the group of NAHB members who can be solicited. This could have a very positive impact on BUILD-PAC fundraising.
If you are interested in learning more about the Affiliate category or starting the Affiliate category at your HBA, contact Emily Fitzsimmons at 800-368-5242, x8354 or visit www.nahb.org/affiliateinfo.
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