By Ehrhardt                                    H.C.R. No. 141

      75R3267 CCK-D                           

                             HOUSE CONCURRENT RESOLUTION

 1-1           WHEREAS, The Low Income Housing Tax Credit (LIHTC) program,

 1-2     created under the federal Tax Reform Act of 1986, is the major

 1-3     avenue for raising equity to fund the development of low-income

 1-4     rental housing in Texas and throughout the nation; and

 1-5           WHEREAS, Under the program, federal income tax credits are

 1-6     awarded to developers of residential rental properties to stimulate

 1-7     the construction or the acquisition and rehabilitation of housing

 1-8     for rental to low-income tenants at below-market rates; and

 1-9           WHEREAS, The LIHTC functions like a state-managed block

1-10     grant, subject to an annual cap; each year, a state may allocate an

1-11     amount of credits up to $1.25 times its total population, with an

1-12     exemption from the cap for tax credits that are used in connection

1-13     with tax-exempt multifamily bond issues; and

1-14           WHEREAS, Despite the worthy goals of the program, provisions

1-15     to sunset LIHTC were included in the 1995 federal budget

1-16     reconciliation bill after the circulation of a draft report by the

1-17     Internal Revenue Service (IRS) alleging certain abuses of the

1-18     program; and

1-19           WHEREAS, The IRS later retracted and repudiated those

1-20     conclusions, but in the meantime the program was saved only by a

1-21     presidential veto of the budget reconciliation bill, followed by

1-22     the exclusion of the sunset provision from omnibus appropriations

1-23     enacted at the federal level in 1996; and

1-24           WHEREAS, The importance of the tax credit to the availability

 2-1     of affordable housing is underlined by the fact that LIHTC units

 2-2     represent approximately 94 percent of all low-income rental

 2-3     apartments in the United States; and

 2-4           WHEREAS, Since the enactment of the 1986 federal tax reforms,

 2-5     virtually every unit of newly constructed affordable housing in

 2-6     Texas has been built through a tax credit, and consequently it is

 2-7     vital to the interests of this state and its low-income residents

 2-8     that the LIHTC program be continued; now, therefore, be it

 2-9           RESOLVED, That the 75th Legislature of the State of Texas

2-10     hereby respectfully request the Congress of the United States to

2-11     preserve and maintain the Low Income Housing Tax Credit program;

2-12     and, be it further

2-13           RESOLVED, That the Texas secretary of state forward official

2-14     copies of this resolution to the president of the United States, to

2-15     the speaker of the house of representatives and the president of

2-16     the senate of the United States Congress, and to all the members of

2-17     the Texas delegation to the congress with the request that this

2-18     resolution be officially entered in the Congressional Record as a

2-19     memorial to the Congress of the United States of America.