Housing and farm bills on congressional to-do list

Debate is heating up about the possibility of Congress coalescing around a major new reconciliation bill, a farm bill in disarray and a housing bill near the finish line that could boost private activity bond sales.

"Congress has, for the first time in at least a decade, started a very large omnibus housing authorization bill," said Peter Lawrence, chief public policy officer, Novogradac & Company LLP.

"One of the final steps in the process is to have a conference committee between the House and Senate to hash out the differences. We think that that might be the next step towards actually getting the legislation on the President's desk."

The comments came during a panel discussion hosted by the Council of Development Finance Agencies, in Washington D.C., Tuesday.

The bipartisan, bicameral housing package includes a provision raising the cap on public welfare investments to 20% from 15%.

The PWI limits how much banks can invest in community development projects, which includes affordable housing.

Raising the cap is expected to pull more private investment into the affordable housing sector which relies on support from private activity bonds.

The bill also contains a bone of contention via a provision that would set new restrictions on investors who own 350 or more single-family rental homes.

"If it wasn't for that provision, you might actually have the bill already enacted," said Lawrence.

Aggie bonds are also showing up on the to-do list for Congress as the Modernizing Manufacturing and Agricultural Bonds Act is booked for another reintroduction.

MAMBA would update Internal Revenue Service regulations governing aggie bonds, also known as Industrial Development Bonds.

According to CDFA, IRS regulations written in 1986 are throttling the issuance of IDBs due to the outdated definition of "manufacturing facilities," a $10 million cap, and $1 million cap on small issue bond proceeds from first time farmers.

MAMBA's champion in the House is Rep. Darin LaHood R-Ill.

"Mr. LaHood will be reintroducing that bill next week," said Eric Silva, CDFA legislative representative for North South Government Strategies.

"That's our signature piece of legislation that we're trying to get passed and we've introduced it in the Senate three or four times and in the House, three or four times, and now we're ready to ramp up and get it passed."

Strategies for passing MAMBA in the past typically included a ride on a major farm bill which has become problematic due to politics.

Farm bills are typically five-year plans written as bipartisan omnibus laws that address policy issues on agriculture, nutrition, conservation, and rural development.

The last major farm bill was passed in 2018 and has been extended in one-year increments since 2023.

"One of the big issues this year is the broad coalition that helps support the passage of the Farm Bill, which is the nutrition and SNAP program coalition, and the farm subsidies and commodities groups," said Michael Matthews, director of government relations, National Association of Development Organizations

"That was largely eroded during the One Big, Beautiful Bill Act where we saw tens of billions of dollars of cuts in nutrition programs, and conversely, tens of billions of dollars added through farm subsidies and commodities."