House Rules Committee Released Revised Text for Build Back Better Legislation; Includes LIHTC, NHTC, Tribal NMTC and RETC proposals
Democrats in the House of Representatives today released revised text for the Build Back Better Act (H.R. 5376), which includes an expansion of the low-income housing tax credit (LIHTC), the neighborhood homes tax credit (NHTC) and a $175 million tribal allocation for the new markets tax credit (NMTC) for 2022. The revised legislation retains $555 billion in tax and spending proposals for clean energy with minor changes. The LIHTC provisions include the extension of the 12.5% increase in 9% allocations that began in 2018 as part of the baseline during 2022-2024, adding annual 10% plus inflation increases for 2022-24 to those amounts, but reverting to the 2017 baseline as adjusted for inflation in 2025. It also would reduce the 50% test for affordable rental housing financed with private activity bonds (PABs) to 25% for five years (2022-26) and establish the 50% basis boost for extremely low-income housing, with the set-aside reduced from 10% to 8%, and a 30% basis boost for LIHTC properties in tribal areas.
The bill would introduce the NHTC at 50% of the state allocation amount in the Ways and Means version of the legislation for 2022-24, with an annual inflation adjustment, increasing to 100% of the state allocation amount in 2025 but expiring after 2025. The Senate version of the bill may contain further community development provisions. House Democrats also released a comparison of the bill to its previous version and a section-by-section summary.
The LIHTC and NHTC provisions of the legislation will be major topics at the Novogradac 2021 Tax Credit Housing Conference, Dec. 2-3 in Las Vegas.