Tubbs Jones Introduces Tax Relief, Incentive Bill to Assist Katrina Victims

Tubbs Jones Introduces Tax Relief, Incentive Bill to Assist Katrina Victims

Tubbs Jones Introduces Tax Relief, Incentive Bill to Assist Katrina Victims
Legislation will focus on Employment, Adequate Housing
 
Washington, D.C. - Today, Congresswoman Stephanie Tubbs Jones, member of the House Ways and Means Committee, introduced the Katrina Assistance Tax Relief Incentives for Necessities Act of 2005 (KATRINA). This legislation will provide important first steps towards providing adequate housing and gaining employment for the victims of Hurricane Katrina.
 
"As Hurricane Katrina victims rebuild and go forward with their lives, two necessities are crucial to their success: gaining employment and finding adequate housing" stated Rep. Tubbs Jones. "Through this bill we can provide long-term assistance to strengthen infrastructure and give economic stability to the people of the Gulf Coast."
 
KATRINA has the support of the Affordable Housing Tax Credit Coalition and the National Council of State Housing Agencies.
 
The Affordable Housing Tax Credit Coalition released this statement regarding the legislation:
 
"We applaud Congresswoman Tubbs Jones for recognizing the importance of the Housing Credit program in the rebuilding effort and the ways in which the Housing Credit helps catalyze public/private/community partnerships that create safe, affordable, attractive housing, attract private capital, and prime the market for other activities, including home ownership and retail facilities.
 
"This legislation provides a crucial first step towards using the Housing Credit program to meet the newly created affordable housing needs in the Gulf States.  The Coalition looks forward to working with Congresswoman Tubbs Jones and others on Capitol Hill to find ways to provide safe, affordable housing to people impacted by this national tragedy."
 
The legislation seeks to provide the following:
 
Extension of the Work Opportunity Tax Credit to Katrina Victims

• The Work Opportunity Tax Credit (WOTC) is a successful federal tax credit that encourages employers to hire eight targeted groups of job seekers by reducing employers' federal tax liability.  The credit limit is $2,400, and the targeted groups include veterans, ex-felons, high-risk youth, and welfare recipients.  This legislation adds workers that have lost their job due to Hurricane Katrina to the WOTC eligibility list, thereby helping victims reenter the workforce. This proposal would expire December 31, 2006.

Katrina Temporary Housing Tax Credit

• This legislation provides a tax credit to families housing displaced victims of Hurricane Katrina.  The credit can range between $250 and $1,000, and a displaced victim must be housed for at least three months for recipients to be eligible.  As more and more hard-working families bring Katrina victims into their homes, we should relieve a portion of the additional expenses they will have to incur as a result of their goodwill.  This proposal would expire December 31, 2006.

Katrina Victims Homebuyer Tax Credit

• This legislation provides up to a $5,000 tax credit to homeless Katrina victims in order to help them purchase a new home in the state where they used to reside when Hurricane Katrina struck.  This will help Katrina victims, many of whom have lost their job, to achieve the "American Dream" for the first time.  This proposal would expire December 31, 2006.

Expanding the Low-Income Housing Tax Credit to Assist Katrina Victims Attain Affordable Housing

• This legislation would make the following changes to the Low-Income Housing Tax Credit, making more affordable housing units available in areas devastated by Hurricane Katrina:

? Double the housing tax credit authority for Louisiana, Mississippi, and Alabama for 2006 and 2007 to $3.70 times state population.  The current cap is $1.85 times state population.
 
? Extend "Difficult Development Area" (DDA) designation to federal disaster areas in Louisiana, Mississippi, Alabama, and Florida through 2007.  DDAs are currently those areas with high construction, land, and utility costs because of its location.  In DDAs, the tax credit is based on 130% of the project's total cost (instead of the normal 100%), providing an incentive to developers to invest in these most distressed areas.  This legislation would make affordable housing projects in federal disaster areas in LA, MS, AL, and FL eligible for DDA designation and the "basis boost" -- increasing investment and economic development in the region.
 
? Waive the national pool "full subscription" requirement for Louisiana, Mississippi, Alabama, and Florida through 2007.  Currently, the Low-Income Housing Tax Credits not used by states are added to a national pool.  The tax credits in that national pool is then distributed to those states that apply for the excess credits.  However, to be eligible for those credits, a state must have used all of its previously allocated tax credits (e.g. "full subscription").  This legislation waives that requirement for LA, MS, AL, and FL, allowing those states to utilize the excess low-income housing tax credits that other states have not utilized.   Although those states may not have used all their allocated credits by the end of 2005 (either due to lack of staff resources or lack of qualified applicants at the moment), it is very likely that those states will encounter high demand for affordable housing during their post-Katrina reconstruction efforts. 

Original cosponsors for this bill include included Ways and Means members William Jefferson (D-LA), John Lewis (D-GA), Rahm Emanuel (D-IL), Lloyd Doggett (D-TX), and Richard Neal (D-MA).