Last night reports indicated that House Speaker Mike Johnson (R-LA) is planning to hold a vote this week on bipartisan tax legislation, “The Tax Relief for American Families and Workers Act of 2024” (H.R. 7024). The legislation includes the AHTCC’s two Low-Income Housing Tax Credit (Housing Credit) production priorities—restoring the 12.5 percent allocation increase for 2023–2025, and lowering the 50 percent bond financing threshold to 30 percent for 2024 – 2025.
The legislation will be considered under a suspension of the rules, a legislative process which requires a two-thirds majority vote of support in the House in order to pass. The process also speeds up debate and precludes the ability of members to add amendments to the legislation. This procedure tends to be used when legislation has strong bipartisan support on both sides of the aisle, and is typically only used when leadership from both parties have agreed to use this accelerated process.
The core provisions included in this tax package center around business tax extenders and the Child Tax Credit, and the Housing Credit provisions that were included in this agreement were among a very short list of other tax provisions that were added. The total cost of the package is reported to be around $78 billion.
On Friday, January 19, the legislation was approved by the House Ways and Means Committee with overwhelming bipartisan support on a 40–3 vote, with the three dissenting votes coming from Democrat members of the committee. See our blog post outlining the recent approval of the bill in committee here.
The strong bipartisan support from the Ways and Means committee is a positive sign for the bill’s prospects on the House floor, where it is likely to clear the threshold for passage. The legislation will then head to the Senate, where the process and timing for consideration is still unclear. However, a strong show of bipartisan support in the House could pressure the Senate to consider the legislation quickly.
Housing Credit Provisions
If enacted, this legislation would:
- Restore the 12.5 percent allocation increase for 2023 – 2025. This allocation increase was initially enacted in 2018 but expired in 2021. The provision in this agreement would not extend the 12.5 percent retroactively for 2022, but would restore it retroactively for 2023 and keep the provision in place for the next two years.
- Lower the 50 percent bond financing threshold to 30 percent for Private Activity Bond (PAB) allocations made in 2024 – 2025.
Together, the approved provisions are estimated to finance the production or preservation of over 200,000 additional affordable homes, according to Novogradac. Enacting these provisions would also position our priorities for potential extension in 2025, when Congress is expected to enact major tax legislation due to the expiration of the individual tax provisions that were included in the Tax Cuts and Jobs Act of 2017 and now this current tax legislation.
The approved legislative text related to our Housing Credit priorities that will be considered in the House vote can be found here.