Summer has arrived and there are around two months left before Congress departs Washington for the August recess. In a normal cycle this might be a relatively benign period with elections a few months away and partisan sniping at its peak. Partisan sniping is reaching a plateau and national events are adding fuel to the rancor. That said, legislating is ongoing, and the affordable housing industry is working to notch a few wins before the policy making ends and politics consume the District and the country.
For some time, we have been engaged in an effort to adjust the legislative language of the American Rescue Plan Act (ARPA) to allow those resources to be utilized for affordable housing production using the LIHTC. We have successfully worked to have the bipartisan LIFELINE Act (S.4181 & HR.7078) introduced in the House and Senate, allowing State and Local Fiscal Recovery Funds (SLFRF) to be awarded as long-term interest free loans to LIHTC developments, without a reduction of basis. We are gathering support for the legislation in Congress and hope to include the proposal in legislation that will be voted on before the August recess.
Regarding our larger LIHTC agenda, conversations are again taking place that could result in a reconciliation package being drafted by Hill Democrats. The clock is ticking as they only have until September 30 for the President to sign a FY 2022 reconciliation bill. Early chatter has the conversations focused on prescription drugs and energy proposals, but we have been and continue to emphasize the significance of including our LIHTC priorities; reinstatement of the 12.5% LIHTC allocation lost on 12/31/2021 and a reduction of the 50% test for bonds. Reports consistently focus on housing costs, and specifically rents, as a driver of inflation and thus our key talking point is you cannot address the stress on the economy if you do not increase the supply of affordable housing. We will be pressing our champions in Congress to include our LIHTC priorities in any reconciliation discussions and ask you to reach out to the CA delegation, especially Senator Padilla and Reps. Gomez, Panetta, Sanchez, Thompson and Chu who all sit on the Ways & Means Committee.
Other issues to mention are our continued push to have the regulatory review of the Average Income Test (AIT) released by Treasury. President Biden recently released his plans to ease the burdens of high housing costs and lack of supply, among them an announcement that the reviewed AIT regulation would be released by late September. This is later than we had previously be told the regulation would be announced and a disappointment to the entire industry. A bipartisan group of Senators sent a letter to Treasury Secretary Yellen and IRS Commissioner Rettig urging them to expedite the release of the final rule. We will continue to join our congressional supporters in pushing for release of the final rule expeditiously.
As you can see there is much going on as we work our way into summer. It is likely we will continue to work on LIHTC agenda issues right up until the end of the year and your participation in those efforts will be vital to our success. Thank you for your engagement and continue support of our efforts in Washington.