Tax Credit Provisions in Previous Federal Budget Proposals

Published by Michael Novogradac on Monday, February 3, 2014 - 12:00am

In this month’s Washington Wire, I review trends from the past 10 years’ federal budget proposals and speculate about what President Barack Obama’s proposal for fiscal year (FY) 2015 may include. To supplement that discussion, the following list details proposals from each year’s federal budget proposal related to the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), historic tax credit (HTC) and renewable energy production tax credit (PTC) and investment tax credit (ITC).

FY 2014

LIHTC

  1. Allow states to convert private activity bond volume cap into LIHTCs that the state can allocate
  2. Encourage mixed income occupancy by allowing LIHTC-supported developments to elect a criterion employing a restriction on average income
  3. Change formulas for 70 percent present value and 30 percent present value LIHTCs
  4. Add preservation of federally assisted affordable housing to allocation criteria
  5. Make the LIHTC beneficial to real estate investment trusts (REITs)

NMTC

Extend and modify the NMTC (permanent extension at $5 billion each year)

ITC/PTC

  1. Modify and permanently extend  renewable electricity production tax credit

FY 2013

LIHTC

  1. Encourage mixed income occupancy by allowing LIHTC-supported developments to elect a criterion employing a restriction on average income
  2. Make the LIHTC beneficial to REITs
  3. Provide two additional incentives for investment in preservation projects: a more efficient way to qualify for 30 percent present value LIHTCs and the possibility of an additional 30 percent boost to qualified basis
  4. Require LIHTC-supported housing to provide appropriate protections to victims of domestic violence

NMTC

  1. Extend and modify the NMTC (extend for 2012 and 2013 allocation rounds with $5 billion for each year)

ITC/PTC

  1. Extend and modify certain energy incentives (extend PTC and ITC for wind to facilities and property placed in service in 2013; extend the Treasury grant program to all otherwise qualifying property placed in service in 2012)

FY 2012

LIHTC

  1. Encourage mixed-income occupancy by allowing LIHTC-Supported developments to elect an average-income criterion
  2. Allow state housing finance agencies to designate certain developments to receive, for purposes of computing LIHTC, a 30 percent boost in eligible basis


NMTC

  1. Extend and modify the NMTC (one year extension for 2012, at $5 billion)

ITC/PTC

  1. Grants for specified energy property in lieu of tax credits

FY 2011

LIHTC

  1. Extend option for cash assistance to states in lieu of LIHTCs

NMTC

  1. Extend and modify the NMTC (extend for two years (2010 and 2011), at $5 billion each year)

FY 2010

NMTC

  1. Extend the NMTC ($3.5 billion of total equity investments for calendar year 2010)

FY 2009

NMTC

  1. Extend the NMTC ($3.5 billion of total equity investments for calendar year 2009)

FY 2008

NMTC

  1. Establish Opportunity Zones (Individuals, organizations and governments within an opportunity zone would receive priority designation when applying for NMTCs)

FY 2007

NMTC

  1. Establish Opportunity Zones (Individuals, organizations and governments within an opportunity zone would receive priority designation when applying for NMTCs)

FY 2006

NMTC

  1. Establish Opportunity Zones (Individuals, organizations and governments within an opportunity zone would receive priority designation when applying for NMTCs)

ITC/PTC

  1. Extend the tax credit for producing electricity from wind, biomass, and landfill gas and modify the credit for electricity produced from biomass
  2. Provide tax credit for residential solar energy systems

FY 2005

ITC/PTC

  1. Extend and modify the tax credit for producing electricity from certain sources
  2. Provide tax credit for residential solar energy systems
  3. Provide tax credit for energy produced from landfill gas

FY 2004

ITC/PTC

  1. Extend and modify the tax credit for producing electricity from certain sources
  2. Provide tax credit for residential solar energy systems
  3. Provide tax credit for energy produced from landfill gas