On December 16th, the House leadership filed the conference report on the FY 2016 Omnibus Appropriations bill. The $1.1 trillion bill includes appropriations for federal agencies both domestic and defense and is $50 billion above the FY 2015 comparable level. The companion tax bill called the PATH Act (Protecting American Against a Tax Hike) totals $650 billion over 10 years.
Reading below you will see that housing and community development programs fared reasonable in the era of austerity. Many believe the increase of $50 billion agreed to this fall cost House Speaker John Boehner his job. The relatively small increase – less than 5% – pales in comparison to the reductions in discretionary spending since the enactment of the Budget Control Act of 2011, but is nonetheless welcome and has cleared the way for a reasonably good outcome.
In HUD programs CDBG continues at the current rate and HOME, after defying death in Senate ended up with an $50 million increase. The conference agreement does not include House language that prevented GSE funding for the National Housing Trust Fund, authorized under the Housing and Economic Recovery Act (HERA) of 2008, thus clearing the way for implementation. SHOP receives an appropriation of $55.7 million. The HUD 108 loan program continues at $300 million.
The CDFI Fund fared well with the highest appropriation in its history at $233.5 million. In addition, the Fund will have available money from HERA to implement the Capital Magnet Fund, has not received an appropriation in several years.
For the USDA Rural Housing programs, the bill represents the largest appropriation in recent memory and at least since the Federal Credit Reform Act of 1992 changed accounting for federal loan programs. The reason for this increase supports rural rental assistance. The FY 2016 appropriation totals almost $1.4 billion. It is over $200 million above the budget request and $300 million, above the FY 15 level. That amount includes $75 million for contract renewal within the 12 month period through September 30, 2017. The bill requires USDA to provide quarterly reports on renewals, the amount of rental assistance funding available and anticipated need the balance of the fiscal year.
Other rural provisions of the FY 16 spending are more or less at the current rate. Congress continues single family loan programs at the FY 15 rates and rejected (again) the proposed reduction in mutual self-help housing grants. The bill includes language requiring USDA to establish an intermediary pilot program to improve packaging and processing of section 502 direct loans.
Farm labor housing, section 515 loans, home repair loans funded at a freeze. There is a little more funding for multi-family preservation and vouchers. Proposals to cut the IRP were rejected.
See the attached Appropriation Charts comparing current funding levels to those highlighted in the Omnibus bill here.
Other notable takeaways :
- SBA 7(a) loan guarantee is capped at $26.5 Billion
- EB-5 program is maintained “as is” and authorized through the end of FY 2016
- CDBG is funded at $3 Billion
- HOME is restored and funded at $50 million more than current FY15 authority, totaling $950 million
A full analysis of the bill including policy riders that didn’t make it into the final package is provided here by the House Democratic Appropriations Committee Staff.
Tax Extenders Package reached
On the tax side of the equation the Protecting Americans from Tax Hikes Act of 2015 ensures the permanency of the 9% credit floor on Low Income Housing Tax Credit and the New Markets Tax Credit was extended for 5 years at $3.5 billion in annual credit authority. Empowerment Zone Tax Credits are extended through 2016.
The last tax extenders package, which passed at the end of 2014, authorized just one year of retroactive extensions. This amounted to only one additional round of NMTC allocation, and provided virtually no practical benefit for the Housing Credit. The new tax extenders package is a significant improvement over previous legislation and a victory for both programs.
The permanent minimum 9 percent rate would significantly strengthen the Housing Credit by simplifying program administration, providing predictability, and allowing states to allocate more Housing Credit equity into individual developments when needed for financial feasibility. The five-year extension of the NMTC would also provide greater certainty while ensuring that our nation’s most distressed communities receive critically-needed infusions of private capital for years to come.
Congressional reaction from our Champions on the Hill provided here by the New Markets Tax Credit Coalition, in which NDC serves as a member.
The tax bill will be on the House floor tomorrow. There will be a separate vote on the omnibus appropriations bill on Friday, December 18th. The Senate is expected to vote on a bill that combines both the tax and spending legislation in one bill. That vote is also expected on the 18th.
What should we do?
Call Your Members of Congress to THANK them for their support for Community and Economic Development Programs!
Contact your members of Congress today – especially those who already have committed to supporting minimum Housing Credit rates by cosponsoring either H.R. 1142 or S. 1193. See a state-by-state list of minimum Housing Credit rate legislation cosponsors.
Ask your members of Congress to reach out to House Ways and Means Committee, Senate Finance Committee and House and Senate leadership, and thank them for their efforts in securing these packages.
Key messages:
Members often here from constituents, lobbyist, advocacy groups, and stakeholders when there is a want, need, or particular ask, but rarely is there follow through once the ask is delivered. As Congress looks to close out the first session of the 114th Congress and leave for the Holiday recess, we would like to encourage you to reach out to Congressional Members and deliver a message of gratitude and appreciation.
Keep in mind, the Holiday Recess is the perfect time to have members of Congress see firsthand the benefit of these programs listed in the above legislation. Please reach out to us for assistance in setting up Recess visit in the district.