Housing Assistance Tax Act

Floor Speech

HOUSING ASSISTANCE TAX ACT -- (Senate - July 29, 2008)

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Ms. CANTWELL. I also would like to thank the chairman. In my home State of Washington, the IRS action has threatened a number of innovative housing developments, involving housing for pregnant women, housing for disabled military veterans, and housing for artists that are being used as part of a larger redevelopment strategy to rebuild neighborhoods. The IRS action has been particularly problematic for State efforts to deal with the critical need increase the supply of safe, decent, and affordable housing for migrant and seasonal farm workers. About 10 years ago, Washington established a Farm Worker Housing Program that has led to the creation and preservation of over 1,065 units of permanent housing for farm workers. The IRS's recent position has not only threatened future development of such housing but could potentially result in the recapture of low-income housing tax credits for such units currently in existence, potentially bringing financial ruin to the nonprofit housing providers which have developed and operate this housing.

The language in the bill that this body passed on July 26 on general public use reflects Congress's comfort with the historical application of the general public use requirement prior to the IRS's recent activities, and Congress's intent to remove the uncertainty and risk that the IRS's recent activities have created for the section 42 program.

Mr. BINGAMAN. My understanding, Mr. Chairman, is that the general public use provision in that bill, as passed, clarifies that housing does not fail to meet the general public use requirement solely because occupancy restrictions or preferences that favor tenants with (1) special needs; (2) who are members of a specified group under a Federal program or a State program or policy that supports housing for such a specified group, or (3) who are involved in artistic or literary activities. Is that understanding correct?

Mr. BAUCUS. Yes, the Senator is correct. And for this purpose a special need may relate to the physical facilities of the property, such as a building that offers day care, the services that are to be provided, or the circumstances of the tenants, such as low-income parents attending college.. The basic structure of the low-income housing tax credit is based on the premise that the States have the prime responsibility to administer this program, and they have done an excellent job so far. They currently have the responsibility to determine the housing priorities of the State and to give priority to tenant populations with special housing needs. The newly codified general public use rule reinforces the latitude of the States to decide how housing credit dollars are allocated.

Ms. CANTWELL. I thank the chairman for that response and for his work, along with that of the ranking member, on this important issue that would permit housing credit properties to continue to serve special populations provided that the properties satisfy the nondiscriminatory tenant selection criteria and other requirements of the Low-Income Housing Tax Credit Program. I also thank the Senator from New Mexico, Mr. Bingaman, for his tireless leadership on this issue.

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