U.S. House Approves Tax Extenders Bill

By a wide bipartisan of 378-46 margin, the U.S. House last night approved H.R. 5771, the Tax Increase Prevention Act, which will renew scores of temporary tax provisions known as “tax extenders” that are set to expire this year.  Severa are of interest to the housing community. The one-year retroactive renewal is through 2014 and dates back to January 1.

NAHB is disappointed that a longer-term deal was not reached, but the political situation and the calendar have forced Congress into a one-year deal everyone hoped to avoid.

Just one week ago, Congress was headed to a bipartisan, bicameral deal which would have extended all of the expired provisions for two years through 2015. The agreement also would have made a handful of extenders, like the research and development tax credit, permanent.

Just hours after word of the agreement leaked out, the White House scuttled the deal by announcing the President would veto any bill that contained these permanent provisions.

In a letter to the House prior to the bill’s passage, your Home Builders Association urged lawmakers to support the legislation. We also expressed concern that these short-term tax bills create difficulties for our members by denying builders the certainty needed to finance complex projects and called on Congress to act quickly on a longer-term deal in early 2015

Key provisions in the tax extenders package for 2014 (retroactive to January 1) include:

  • Section 45L Tax Credit for Energy Efficient New Homes. Provides builders a $2,000 tax credit for exceeding energy standards by 50 percent. The base energy code is the 2006 International Energy Conservation Code plus supplements. Section 45L is expected to save home builders $267 million in taxes for 2014 construction activity.
  • Fixed Credit Rate for 9 percent Low Income Housing Tax Credit projects. The bill will renew the 9 percent fixed rate, but only for 2014 allocations.
  • Section 25C Tax Credit for Qualified Energy Efficiency Improvements. This is a credit worth up to $500 (subject to a $500 lifetime cap), with lower caps for certain products like windows, for consumers to install qualified energy efficient upgrades. Remodelers often leverage 25C tax credits when working with clients. Section 25C is expected to save home owners who remodel $832 million in taxes for 2014 improvements.
  • Section 179D Energy Efficient Commercial Buildings Deduction. Provides a deduction up to $1.80 per square foot for commercial buildings, including multifamily buildings built under the commercial code, that exceed specific energy efficiency minimums. The proposal also would change the baseline for the efficiency standards to the ASHRAE/IESNA 90.1-2007 standards.
  • Section 163 Deduction for Private Mortgage Insurance. Allows taxpayers, subject to an income cap, to deduct premiums paid for private mortgage insurance. The deduction for PMI is expected to save home owners $919 million for tax year 2014.
  • Bonus Depreciation. Extends the 50 percent bonus depreciation.
  • Section 179 Expensing. Increases the maximum expensing amount to $500,000 for qualified property on up to $2 million in property placed in service.
  • Short-sale mortgage debt forgiveness. The provision would extend through 2014 the exclusion from gross income of a discharge of qualified principal residence indebtedness due to a short sale.

The Senate is expected to take up and pass H.R. 5771 next week.

Your membership saved you $26,600 so far in 2014*

* estimated savings per licensed builder

The 2014 session of the South Carolina General Assembly has come to an end and once again your Home Builders Association was hard at work protecting your interests.  Your Home Builders Association worked on 150 different pieces of legislation to promote and protect the vital work of home builders and residential developers in South Carolina.

Here is what we accomplished:

  1. Successfully opposed mandated residential fire sprinklers (again): $181 million in annual savings to home builders and their customers
  2. Passed a one-year extension to the Multiple Lot Property Tax Discount: $1.9 million in annual savings
  3. Successfully defeated a proposal to sunset the residential solar tax credit: $780,000 in annual savings

In addition, your Home Builders Association engaged in several other legislation initiatives including health insurance, unemployment insurance, tax credits, septic tank regulations, stormwater regulations, and building codes, resulting in a total annual savings to our members of $320 million–just in 2014!

Your Home Builders Association influences government at all levels.  Our goal is to protect affordable housing and to stop needless regulation that adds costs to new housing.  If you know of an individual or business in the home building industry who is not a member of the Home Builders Association, make sure they know what the Home Builders Association is doing for them every day, and ask them to become a member.

Don’t text while driving

UPDATE: Governor Nikki Haley sign the texting ban bill into law today, June 10, 2014.

The South Carolina General Assembly has approved legislation that will make it illegal, throughout the state of South Carolina, to text while driving.  The legislation makes it permissible to text while idling at a traffic light.  It also prohibits drivers with learners or restricted licenses from using a mobile phone while driving.

One key provision of the legislation, which still requires the approval of the Governor, is that it preempts any local ordinances.  Effective April 1, 2014, the City of Greenville enacted a very restrictive ordinance prohibiting the use of any mobile device while driving or idling.  If approved by the Governor, this and other local ordinance will be nullified.

OSHA urges employers to prevent texting while driving
In OSHA’s April 15, 2014, issue of “Quick Takes,” its twice-monthly e-newsletter, it took the opportunity to remind employers that they have a responsibility to protect their workers by prohibiting texting while driving. Companies are in violation of the Occupational Safety and Health Act if, by policy or practice, they require texting while driving, or create incentives that encourage or condone it, or they structure work so that texting is a practical necessity for workers to carry out their job.

For additional information on how to develop a company policy to minimize potential employer liability resulting from employee cell phone use while driving, see Home Builders Association’s Distracted Driving Guidance.

Government Affairs Committee Meets with Congressman Trey Gowdy

Government Affairs Committee Meets with Congressman Trey Gowdy

On May 12th the Government Affairs Committee and Board of Directors met with Congressman Trey Gowdy to discuss GSE reform, immigration reform and labor shortages, the mortgage interest deduction in tax reform, a proposed time extension to review the EPA’s expansion of the Clear Water Act, and refining patent laws concerning patents on common construction techniques.
HBA members met with the Congressman at a new model home at Verdae, in Greenville by LS Homes.

  “We appreciate the opportunity to meet with Congressman Gowdy and for the valuable discussion he engaged in with everyone concerning these issues that affect home building, construction, and home buying,” Mike Freeman, Home Builders Association President, said.

Thank you to Congressman Gowdy for spending time with us and LS Homes for hosting us!