Washington Update - 03/14/2006 (Plain Text Version)

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Senate Panel Tackles Immigration Reform

The Senate Judiciary Committee last week reached an agreement on several aspects of a comprehensive immigration reform measure proposed by Judiciary Chairman Arlen Specter (R-PA), with further debate to resume this week. In addition to border security and enforcement provisions, the legislation would also create a new visa category, H-2C, that would allow non-U.S. citizens to work in America so long as they present proof of a job offer and pass a background check. However, the legislation does not provide any specific way for illegal immigrants to get onto a path toward citizenship or permanent residency; it simply allows them to join the labor program indefinitely.

NAHB is working with Senate Judiciary Committee members to urge several alterations to the legislation, including one that would provide a safe harbor for employers should their employees admit to being illegal. The panel is expected to spend two more days considering the bill this week. Majority Leader Bill Frist (R-TN) hopes to have a bill on the Senate floor by the first week of April. However, the legislation remains highly contentious and it is possible that the schedule for consideration could be derailed by ongoing debate over the key guest worker and illegal immigrant provisions. For more information, contact Jenna Morgan Hamilton at 800-368-5242, x8407.

LIHTC/MRB Modernization Introduced in House

Last week, Rep. Jim Ramstad (R-MN) introduced H.R. 4873, the Low Income Housing Tax Credit (LIHTC) and Mortgage Revenue Bond (MRB) modernization bill. The bill includes a number of improvements to both programs, many of which are key priorities for NAHB. Regarding the LIHTC program, the legislation would:

Change the name of the program to the "Affordable Housing Credit."
Fix the tax credit percentages at 9% and 4%.
Allow projects with 9% credits to also include federal subsidies (with the exception of tax-exempt bonds).
Allow the 30% basis boost for "State Designated Projects" within Qualified Census Tracts and Difficult to Develop Areas.
Apply the scattered site rule to projects where rent-restricted units are distributed proportionally to the number of residential units in each building.
Eliminate the restriction against using LIHTCs with Section 8 moderate rehabilitation projects.
Allow the LIHTC to count against the Alternative Minimum Tax (the bill does the same for the interest on several types of bonds)
Eliminate the recapture bond requirement, while adding some income tax reporting requirements for LIHTC property owners.

For MRBs, the bill would:

Repeal the ten-year rule.
Conform the next available unit rule for the multifamily bond program to the LIHTC program.
Conform the multifamily bond program income test rules for students to those of the LIHTC program.
Allow Single Room Occupancy (SRO) units to qualify as residential units under the MRB program as defined by the LIHTC program.
Provide an exception to the MRB first-time home buyer rule (requiring a three-year gap in ownership of a home) for displaced homemakers, single parents and disaster victims.

The next steps to advance the legislation are to secure a revenue estimate from the Joint Committee on Taxation, build co-sponsorship for H.R. 4873, particularly among members of the House Ways and Means Committee, and enlist sponsors in the Senate to introduce companion legislation. To view the bill, click here and type H.R. 4873 in the box in the center screen. For more information, contact Greg Brown at x8421. [return to top]

Senate Panel to Act on Association Health Plans

The Senate Health, Education, Labor and Pensions (HELP) Committee last week began markup of S.1955, the "Health Insurance Marketplace Modernization and Affordability Act of 2006," which is sponsored by HELP Chairman Mike Enzi (R-WY). The legislation includes a section that would establish an opportunity for trade associations to offer health insurance plans to their members across state lines. Under the legislation, state insurance commissioners would retain most of the oversight over plans, and detailed rules would mandate specific coverage in the association plans. Additionally, insurers would have the ability to offer the exact same health plans to all businesses in the marketplace, without working through the trade associations. The legislation would not allow associations to self-insure their plans. The HELP Committee is expected to continue markup of the legislation this week, and Majority Leader Bill Frist is expected to move the legislation to the Senate floor at the end of April, or early May, during the Senate's "Health Care Week."

The Senate bill is vastly different from the House-passed Association Health Plan legislation, H.R. 525, the "Small Business Health Fairness Act." It is expected to be difficult to conference the two bills together, making final success uncertain this year. To view the legislation, click here and type the bill numbers in the box in the center screen. For more information, contact Jenna Morgan Hamilton at x8407. [return to top]

Mexican Cement Deal Paves Way for Free Trade

Secretary of Commerce Carlos Gutierrez and his Mexican counterpart signed an agreement on March 6 that will dramatically reduce duties on imported Mexican cement and will result in free trade between the two nations in three years. Under the terms of the agreement, which settles a 16-year trade dispute, the U.S. will reduce duties from $26 to $3 per ton, and Mexican imports will be permitted to grow to 3 million metric tons annually, up from last year's level of approximately 2 million tons. After three years, the quotas and duties will be eliminated entirely. For more information, see the March 6 edition of Nation’s Building News or contact Jason Lynn at x8307. [return to top]