Legislation to Lift Volume Cap on Private Activity Bonds Proposed in the House

Date Published: 
April 13th, 2020

Representative Katherine Clark (D-MA), at the urging of the Cambridge Housing Authority, is proposing legislation to provide relief to housing authorities and other assisted housing by creating an exception to the volume cap requirement for private activity bonds used to finance the preservation, improvement, or replacement of certain federally-assisted buildings. Rep. Clark responded to a proposal drafted by CHA that would assist housing authorities bumping up against the volume cap requirement in their states as they seek to preserve and recapitalize their properties.

The proposal would amend the tax-exempt bond volume cap and low-income housing tax credit to provide an exception from the volume cap requirement for private activity bonds used for public housing preservation, improvement, or full or substantially full replacement of affected dwelling units with public housing or Section 8 project-based assistance. The proposal would allow additional public housing recapitalization transactions requiring use of 4% housing tax credits to take place in states that otherwise would use up their volume caps without supporting the tax-exempt bonds required so that the tax credits do not count against the tax credit allocation cap. These provisions will benefit housing authorities as they move to preserve and recapitalize their properties to better serve their residents and their communities. CHA and CLPHA are hopeful that Rep. Clark will be able to include this legislative proposal in the next COVID-19 supplemental economic relief bill.


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