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Immigration Bill Collapses in Senate
The Senate on June 28 effectively ended consideration of immigration reform for the foreseeable future when lawmakers were unable to muster the 60 votes necessary to cut off debate and proceed to a final vote. The motion failed on a 46 to 53 ballot. Though the Senate failed to keep the legislation alive, NAHB urged lawmakers not to abandon efforts to overhaul the nation’s immigration laws. “The nation’s home builders strongly support comprehensive immigration reform that would protect our borders; provide a process by which immigrants can legally enter the country to work to meet the labor demands of a growing economy; and create an enforcement system that is fair, efficient and workable for all U.S. employers,” said Jerry Howard, executive vice president and CEO of NAHB.
Prior to the decisive vote on S. 1639, the Secure Borders, Economic Opportunity and Immigration Reform Act of 2007, senators were in the process of debating 27 amendments to the bill that were divided nearly evenly between both political parties. NAHB successfully pushed for the introduction of an amendment to clarify areas of critical concern to home builders, including enforcement and verification provisions. Offered by Sens. Charles Grassley (R-Iowa), Max Baucus (D-Mont.) and Barack Obama (D-Ill.), the bipartisan amendment would have enabled small business owners to play a constructive role in the enforcement of new laws.
Highlighting the importance of this issue to the housing community, NAHB wrote letters to all 100 senators, arranged for builders to visit scores of Senate offices and, through BuilderLink, mobilized the association’s national grassroots members. In addition, on June 26 NAHB ran a full page advertisement in USA Today stating the association’s position. In an open letter, NAHB urged all Americans to call their U.S. senators and ask them to support the bipartisan Grassley-Baucus-Obama amendment, noting that it “helps make the new immigration rules much more workable for small businesses and the nation’s home builders.” A similar open letter ad to the U.S. Senate ran the same day in Roll Call, urging senators to support the amendment.
Ultimately, senators never voted on the Grassley-Baucus-Obama amendment because the Senate failed to move forward with the bill. “Though it appears that immigration reform is dead for the time being, we hope to continue working members of Congress to craft immigration policy that protects our borders without placing an unfair burden on small business owners,” said Howard. For more information, contact Jenna Hamilton call her at 800-368-5242 x8407.
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Affordable Housing Trust Fund Bill Introduced in House
Introduction of a bill on June 28 by House Financial Services Committee Chairman Barney Frank (D-Mass.) to establish a National Housing Trust Fund for the creation of affordable housing opportunities for low-income people has received the support of the nation’s home builders. “NAHB’s members are acutely aware of the significant and urgent unmet housing needs throughout the country, and welcome your initiative to marshal additional resources to improve housing opportunities and conditions in America’s communities,” Joseph Stanton, the association’s senior staff vice president for government affairs, wrote to Frank. “In conjunction with efforts to revitalize the Federal Housing Administration (FHA), we believe the National Affordable Housing Trust Fund can greatly improve housing opportunities for those that need it most.”
Co-sponsored by Reps. Maxine Waters (D-Calif.), Jim Ramstad (R-Minn.), Gary Miller (R-Calif.) and John McHugh (R-N.Y.), the bipartisan National Affordable Housing Trust Fund Act of 2007, H.R. 2895, aims to use the trust fund to produce, rehabilitate and preserve 1.5 million units of affordable housing over the next 10 years. For more information, contact Scott Meyer at 1-800-368-5242 x8144.
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Lawmakers Consider Energy Tax Proposals
The Senate Finance and House Ways and Means Committees marked up energy tax proposals this week. The $32.1 billion Senate bill – H.R. 6, the Energy Investment and Advancement Act of 2007 – would extend key energy tax incentives supported by NAHB, including the new homes energy efficiency tax credit (three-year extension) and the commercial energy efficiency tax credit (five-year extension). This legislation also includes a specific provision requested by NAHB that would allow owner-occupied housing to qualify for the new homes energy efficiency tax credit. Unfortunately, when the bill came to the Senate floor, it could not garner enough votes to be added to the broader energy legislation under consideration. This was primarily due to the inclusion of a revenue-raising excise tax provision on the oil and gas industry to pay for other elements of the bill. Senate Majority Leader Harry Reid (D-Nev.) has committed to bringing the bill back to the floor later in the summer.
The House chose a different direction with its own $16 billion energy tax legislation – H.R. 2776, the Renewable Energy and Energy Conservation Tax Act of 2007. While the legislation would extend the commercial energy efficiency tax credit, it did not extend the new or existing homes credits, which expire at the end of 2008. Instead, the legislation created a brand new proposal that would provide energy efficiency improvement resources via tax credit bonds through state and local government grant programs. NAHB weighed in with the Ways and Means Committee on the inherent problems with incentivizing energy efficiency construction in new homes through a government grant process. An amendment was offered during the markup by Rep. Jerry Weller (R-Ill.) to extend the new homes credit and, while it did not pass, several members on both sides of the aisle agreed that it needed to be done at some point. NAHB will be following up on those commitments and pursuing extension and enhancement of the new homes energy efficiency tax credit going forward. The House will consider its overall energy legislation, including tax provisions, at some point in July. To view the legislation, click here and type the respective bill numbers in the box in the center screen. For more information contact Elizabeth Odina at 800-368-5242, x8570.
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House Panel Approves Components of Energy Package
The House Energy and Commerce Committee, chaired by Rep. John Dingell (D-Mich.), passed six components of an energy package that Speaker Nancy Pelosi (D-Calif.) hopes to have on the House floor sometime in July. The panel passed six titles that include energy efficiency in home appliances, green building, improvements to the electricity grid, loan guarantees for the Department of Energy, development of renewable fuels infrastructure and plug-in hybrids. Republicans on the panel tried unsuccessfully to add amendments that would have required higher vehicle efficiency standards (corporate average fuel economy) and mandates for renewable fuels production, both controversial provisions that the Senate included in its energy legislation, but that House leaders have said should wait until later in the debate.
Notably, a provision was included that allows the Department of Energy (DOE) to draft building codes for states that cannot reach 30 percent and 50 percent above IECC 2006 or ASHRAE 90.1-2004 targets by 2010 and 2020, respectively. In addition, language to allow the DOE to establish regional appliance standards for heating and air-conditioning equipment was also included with a provision for a one-year feasibility study prior to implementing the standards. Lastly, an agreement was reached to remove all references to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system from the section establishing the new Office of High Performance Green Buildings at the federal level.
In other developments on the energy front, Rep. Jay Inslee (D-Wash.) last week introduced H.R. 2809 , the New Apollo Energy Act, that would set aggressive carbon emissions reductions of up to 70 percent by 2020 for all new commercial and residential construction. Included in the bill is a section that requires states to submit reports to the U.S. Environmental Protection Agency from all local jurisdictions on the number of building permits issued each year that meet the emission reductions targets. Action on this legislation is expected in September. For more information, contact Elizabeth Odina at 800-368-5242, x8570.
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Alternative Minimum Tax Topic of Senate Hearing
This week, the Senate Finance Committee held a hearing on the Alternative Minimum Tax (AMT). While there was some discussion of ways to permanently repeal the AMT, Committee Chairman Max Baucus (D-Mont.) stated that it was a “given” that Congress would instead pass another short-term temporary fix to the AMT to limit the reach of the tax. Democrats on the House Ways and Means Committee are working on a proposed permanent fix to the AMT, however, neither Baucus nor Ranking Member Charles Grassley (R-Iowa) have expressed any interest in this proposal because of its budgetary and political costs. The Ways and Means Committee may release its AMT proposal in July and hold hearings. NAHB is watching this process closely, especially as it could impact housing incentives in the tax code, and will weigh in as appropriate. For more information, contact Greg Brown at 800-368-5242, x8421.
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Carried Interest Bills Could Impact Real Estate Development
Two bills were introduced this week related to the issue of carried interest. The Senate bill, S. 1624, was introduced by Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa) and is aimed at private equity firms that go public. It would treat the publicly traded investment partnerships as corporations, instead of partnerships, which would increase their tax burden. In the House of Representatives, H.R. 2834 was introduced by Rep. Sander Levin (D-Mich.) and co-sponsored by Chairman Charles Rangel (D-N.Y.) of the House Ways and Means Committee and Chairman Barney Frank (D-Mass.) of the House Financial Services Committee, among others. This bill is of great concern to home builders, especially those in the multifamily and commercial real estate sectors.
H.R. 2834 would require all capital gains distributed according to a carried or promoted interest in a partnership to be treated as ordinary income, taxable at a rate of up to 35 percent. Under present law, such income is treated as a capital gain, and taxed at a 15 percent rate. Among other effects, the legislation would result in a 133 percent tax increase and create large economic inefficiencies with respect to financing certain home building and other real estate development and operations. In particular, this proposal would have a strong negative impact on multifamily family housing builders and developers.
Both the Senate and the House will hold hearings on this subject in July, with the House potentially marking up a bill next month as well. NAHB continues to hold talks with both House and Senate lawmakers and their key staff to hammer home our strong concerns on how this legislation would adversely affect real estate development. To view the legislation, click here and type the respective bill number in the center screen box. For more information, contact Greg Brown at 800-368-5242, x8421.
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House Debates Extending Terrorism Insurance
Marking the beginning of what is expected to be a long debate, the House Financial Services Committee held a hearing on June 21 on extension of the Terrorism Risk Insurance Act (TRIA) beyond its current expiration date at the end of this year. The legislation was initially enacted in 2002 to provide a federal backstop for insurance companies in the event of a major terrorist attack after many insurers started excluding terrorism events from their policies following 9/11. The measure was extended for two years in 2005.
During the hearing, Assistant Treasury Secretary for Financial Institutions David Nason indicated that the Administration wants a two- to three-year extension of TRIA and is opposed to the longer extension and program expansion that would be provided by H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA), which was introduced by Rep. Mike Capuano (D-Mass.) and the House Financial Services Committee Chairman Barney Frank (D-Mass.).
Since the 9/11 attacks, NAHB has strongly advocated legislation to provide secondary insurance coverage for acts of terrorism, and will continue to monitor this issue as it moves through Congress to ensure that the critical insurance needs of the association’s members are addressed. To read the legislation, click here and enter H.R. 2761 in the box at the center of the page. For more information, contact Scott Meyer at 800-368-5242, x8144.
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