House Rules Committee Released Revised Text for Build Back Better Legislation; Includes LIHTC, NHTC, Tribal NMTC and RETC proposals

Wednesday, November 3, 2021 - 2:45pm

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.