Rep. Anthony Weiner, D-N.Y., introduced a bill this week that would permit states to carry over unallocated private-activity bond volume capacity beyond the current three-year limit.
HR 5967, the Affordable Housing Expansion Act of 2008, was introduced Tuesday and referred to the House Ways and Means Committee. No hearings have been scheduled on the legislation, and Weiner is the only sponsor thus far.
The bill would permit states to take unused volume cap from a calendar year and include it in their PAB capacity the following year.
Private-activity bonds are debt instruments issued by state and local governments in which the proceeds are used to benefit a private entity. States are limited in the amount of bonds they can issue by a formula that is based on their population figures.
Currently, states can only carry forward excess volume cap for three years before the amount expires. The bill would remove that stipulation from the tax code.
The measure would apply on a prospective basis only to bonds issued after Dec. 31, 2008.
Meanwhile, the House was preparing late yesterday to consider its housing stimulus package which would increase the PAB cap by $10 billion and permit state and local housing finance agencies to use the excess capacity to issue mortgage revenue bonds to refinance subprime mortgages, as well as first-time homebuyers. The measure would also permanently exempt housing bonds from the alternative minimum tax.
But debate on the bill was being stalled by Republicans who objected that they were not being permitted to offer amendments to the package. The Republicans also protested an upcoming Iraq funding bill that they said had not been voted on at the committee level.
President Bush threatened to veto the housing bill yesterday unless lawmakers removed several provisions, including a measure permitting federal home loan banks to offer letters of credit to all tax-exempt bonds.
