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

Date Published: 
April 16th, 2020

The legislative proposal by Representative Katherine Clark (D-MA) (see CLPHA Update 4/13/20) to create an exception to the volume cap requirement for private activity bonds used to finance the preservation, improvement, or replacement of certain federally-assisted buildings received a boost from CLPHA, NAHRO, PHADA and the MTW Collaborative. The four public housing and housing voucher industry groups sent a joint letter to Representative Richard Neal (D-MA), Chairman of the Committee on Ways and Means, the committee having jurisdiction over this legislative proposal. The letter makes the case for the need for the exception and asks Chairman Neal to support this important legislation and consider moving it through the Ways and Means Committee for approval by the full Congress.

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.

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