Tax Reform Nearing Final Stage of Legislative Process; CR for FY 2018 Expires December 8

CARH’S BROADCAST EMAIL – Legislative Update

December 6, 2017

1) Tax Reform Nearing Final Stage of Legislative Process

In the early morning hours of Saturday, December 2, 2017, the full Senate, by a vote of 51-49, agreed to its version of H.R. 1, the Tax Cut and Jobs Act. The vote was along party lines with all the Democratic Senators voting against the bill. Senator Bob Corker (R-TN) was the lone Republican to vote against final passage due to his concerns that the bill would increase the federal deficit.

The next step in the process will be for the House and Senate to hold a conference committee to reconcile the differences between the two passed versions of H.R. 1 (click here for the House version and click here for the Senate version), with the goal of passing a conference agreement prior to the targeted adjournment of December 15th. The two versions total over one thousand pages and yet, as was reported in previous Broadcast Emails (November 21, November 13, and November 3), there are many items where the House and Senate are in agreement, yet there are several notable differences. Click here to see the differences in the House and Senate bills as they impact real estate and affordable housing and to find information about how the conference committee operates.

The Senate Finance Committee’s legislation had included several provisions of S. 548, the Affordable Housing Improvement Act but, those provisions were deleted on the Senate floor due to procedural concerns. An amendment by Senator Pat Roberts (R-KS) was included, which would make some modifications to the Housing Credit. The amendment provides a mandatory 130 percent basis boost for all rural housing credit transactions; however, it both offsets that with a reduction in basis boost for all other properties to 125 percent, and in effect makes it retroactive to current transactions as it affects transactions placed in service starting 2018. We are working with the Senate to see why any offset would be needed.

Conference Committee:

The following members have been named by the Speaker and Minority Leader as conferees for the House of Representatives:

Republicans: Kevin Brady(TX-8) (Conference Chair and Chair of Ways and Means Committee), Devin Nunes (CA-22), Peter Roskam (IL-6), Diane Black (TN-6), Kristi Noem (SD-at large), Bob Bishop (UT-1), Don Young (AK-at large), Greg Walden (OR-2), and John Shimkus (IL-15).

Democrats: Richard Neal (MA-1) (Ranking member of Ways and Means), Sander Levin (MI-9), Lloyd Doggett (TX-35), Raúl Grijalva (AZ-3), and Kathy Castor (FL-14).

As of the publication of this email, the Majority Leader, Mitch McConnell (KY) has named the following Republican members as conferees for the Senate:

Orrin Hatch (UT), Chairman of the Senate Finance Committee, Mike Enzi (WY),  Lisa Murkowski (AK), John Cornyn (TX), John Thune (SD), Rob Portman (OH), Tim Scott (SC), and Pat Toomey (PA).

As soon as the Minority Leader of the Senate, Charles Schumer (NY) names Democratic conferees, we will update CARH members with a full listing of conferees.

 Action Needed by CARH members:

Both the House and Senate would lower the top corporate rate from 35 % to 20%. As CARH has noted in previous broadcast emails, both the House and Senate would retain the Housing Credit program. However, the reduction in the corporate rate will reduce the associated tax benefits and pricing associated with the housing credit program, and ultimately reduce the number of affordable housing transactions in both urban and rural areas. Furthermore, the House version would eliminate Private Activity Bonds (PABs) and the use of the 4% Housing Credit. The Senate’s version would retain PABs. It is crucial that the Senate’s provisions regarding PABs be agreed to by the conference committee. Even with PABs included in the final legislation, approximately 20% of the Housing Credits will be lost. View the National Summary chart from NAHB/Novogradac & Company LLP by clicking here and the State-by-State breakdown by clicking here.  

It is important that all CARH members weigh in with your Representatives and Senators regarding PABs and the need for the Senate’s provisions to prevail in conference. If you live in a district/state or have affordable housing complexes located in a district/state where the Representative or Senator is a member of the conference committee, it is even more imperative that you take action. While the Senate Republican conferees were announced this evening (December 6), informal discussions have been taken place between the House and Senate. Therefore, CARH members need to ready their message now!

To contact your Representatives click here and to contact your Senators click here.

We continue to urge CARH members to use social media (i.e., Twitter and Facebook). It is a very effective way to deliver your message. (The contact links also include links to your members of Congress social media pages.) For additional information, the A.C.T.I.O.N. coalition, which CARH serves on the steering committee, has prepared talking points on PABs. (The A Call To Invest in Our Neighborhoods (A.C.T.I.O.N.) Campaign is a national, grassroots coalition of over 2,100 national, state, and local organizations and businesses calling on Congress to protect, expand and strengthen the Low-Income Housing Tax Credit (Housing Credit)).

Feel free to use these talking points in your message. Whichever contact method you use, it is important that you make your message personal. Your message should be one that will show the impact of changes to your portfolio and to rural housing across the country. Specific examples are important especially when legislation is being considered that will negatively impact your business as well as the residents who live in your affordable apartment communities.

It unlikely that the conference committee would make any compensatory adjustments for the housing credit, which means efforts to make changes will be needed should there be a technical corrections bill during the 2nd session of the 115th Congress.

2) Continuing Resolution for Fiscal Year 2018 Expires on Friday, December 8

The government is currently operating on a Continuing Resolution (CR) for Fiscal Year (FY) 2018, since full year appropriations bills were not passed by the Congress when the new FY began on October 1, 2017. Congress passed a short-term CR that expires on Friday, December 8th. It is highly unlikely that a full year Omnibus Appropriations bill can pass the Congress by Friday. Therefore, a second CR will likely be passed that will run through December 22. At that point, a third CR may be needed to carry spending into January or even longer. There has been no agreement on lifting the spending caps imposed by the Budget Control Act. Additional disaster funding is likely to be considered separately, not incorporated into a CR. Both the House and the Senate are scheduled to adjourn for the year on December 15.

CARH will continue to keep members appraised on funding developments through CARH’s Broadcast Emails. Tax reform and budget issues will be front and center at CARH’s Midyear Meeting in Napa, California on January 22-24, 2018. You don’t want to miss this meeting as all of the latest fast breaking news will be part of the meeting agenda! If you haven’t yet registered, click here.

If you have any questions or comments, please contact CARH at 703-837-9001 or

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