Overview
Title
To amend the Internal Revenue Code of 1986 to allow for the reallocation of unused volume cap for private activity bonds for qualified residential rental projects.
ELI5 AI
H.R. 9862 is a plan to use extra money left over from certain state projects to help build more places for people to live. It makes sure states tell the government about these projects so they can share this money fairly.
Summary AI
H.R. 9862, also known as the "Combating the Housing Supply Shortage Act of 2024," aims to amend the Internal Revenue Code of 1986. The bill allows for the reallocation of unused volume cap for private activity bonds specifically for qualified residential rental projects. This means any excess bond limits that weren't utilized by states for specific housing projects can be reallocated to fund residential rental projects. The bill sets criteria on how these reallocations will work and mandates states to report necessary information to the Secretary of the Treasury, who will adjust the allocations as needed.
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AnalysisAI
General Summary of the Bill
The proposed legislation, known as the "Combating the Housing Supply Shortage Act of 2024," aims to modify the Internal Revenue Code of 1986. Its primary goal is to enable the reallocation of unused volume cap for private activity bonds, specifically targeting qualified residential rental projects. This change allows states to direct leftover bond capacity towards housing initiatives that align with their local needs, potentially enhancing efforts to address housing shortages.
Summary of Significant Issues
Several issues arise from the bill, particularly concerning its implementation and potential complexities:
Estimation and Allocation Methodology: The process of estimating the "national unused volume cap amount" is based on calculations and adjustments made by the Secretary. This approach could lead to discrepancies or perceptions of unfair allocations among states due to potential inaccuracies or lack of transparency.
Complexity in Calculations: The formula for determining a state’s "housing need percentage" is complex. It requires extensive understanding for stakeholders to verify allocation processes, which may hinder straightforward assessment and participation.
Administrative Burdens: The bill imposes stringent information reporting requirements on states. Failure to comply can result in penalties such as reduced state ceilings, potentially impacting housing projects' feasibility and increasing administrative workload.
Subjectivity and Adjustments: Allowing the Secretary to adjust allocations introduces subjectivity, which can be seen as biased if not thoroughly justified and documented.
Clarity and Accessibility: The terminology and definitions within the bill, such as "supplemental residential rental limitation," may not be easily understood without further clarification, potentially limiting engagement from stakeholders less familiar with legislative or financial jargon.
Impact on the Public
For the general public, the bill might accelerate the development of residential rental projects, especially in states with significant unmet housing needs. Ideally, this could contribute to mitigating the shortage of affordable housing, benefiting communities struggling with high rental costs.
Impact on Specific Stakeholders
State Authorities: They might face increased administrative duties to comply with the bill's reporting requirements. However, successfully navigating these could allow them to direct more resources to housing projects crucial for local communities.
Private Developers: The bill could provide developers with additional funding opportunities via supplemental bond allocations, facilitating the construction of new rental housing units.
Housing Advocates: They may have mixed reactions; while the legislation potentially increases funding for affordable housing, concerns over allocation fairness and state compliance penalties could pose challenges.
Overall, while the bill presents opportunities to address housing shortages, its implementation demands careful consideration to ensure equitable and efficient resource distribution. Ensuring transparency and comprehension in its processes will be key to maximizing its positive impact across various stakeholders.
Issues
The methodology for estimating the 'national unused volume cap amount' could lead to discrepancies if not transparently and accurately calculated, potentially resulting in unfair allocations among States. This is addressed in Section 2, subsection (o)(3).
The provision allowing the Secretary to adjust the national unused volume cap amount introduces a level of subjectivity that could lead to inconsistencies or perceptions of bias if not thoroughly documented and justified, as mentioned in Section 2, subsection (o)(3)(B).
The complexity of the formula for determining the 'housing need percentage' may make it challenging for stakeholders to easily understand or verify the accuracy of allocations, which is stipulated in Section 2, subsection (o)(2)(B).
The punishment for States failing to provide necessary information, which includes reducing the State ceiling, might impact housing projects negatively without providing a clear remediation path. This is outlined in Section 2, subsection (o)(4)(A).
Information reporting requirements and penalties for non-compliance might place a significant administrative burden on States, potentially diverting resources from housing initiatives, as noted in Section 2, subsection (o)(4).
The term 'supplemental residential rental limitation' and its calculation may be unclear to those not familiar with its specific definitions and implications within the context of the bill, as outlined in Section 2, subsection (o)(2)(A).
The bill does not specify how often adjustments to the estimates should be carried out, which could affect the stability and predictability of the volume cap allocations. This is not explicitly covered but is related to Section 2, subsection (o)(3)(B).
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of this act gives it a short title: "Combating the Housing Supply Shortage Act of 2024."
2. Reallocation of unused volume cap for private activity bonds for qualified residential rental projects Read Opens in new tab
Summary AI
The section amends the Internal Revenue Code to allow states to reallocate their unused volume cap for private activity bonds, specifically to support housing projects. It outlines how states can issue supplemental bonds for housing, defines key terms like "supplemental residential rental limitation" and "national unused volume cap amount," and requires states to report certain information to the Secretary, who may adjust state ceilings if needed.