House extends tax credit for Katrina-related housing construction

The House approved a two-year extension of a program offering tax credits for construction of low-income housing in areas hit by Hurricane Katrina in 2005.

The $237 million bill, passed by voice vote last week, would extend the current deadline within which affordable rental units must be occupied by two years, through the end of 2010.

It also makes it easier for homeowners to benefit from tax-exempt bonds issued by local governments for renovations and refinancing residential mortgage loans.

The legislation is one of several bills moving through Congress aimed at helping Katrina victims.

On Monday, the House extended the time that minority-owned businesses affected by the storm can participate in a Small Business Administration aid program. Last week the House passed a bill resolving that public housing projects damaged by the hurricane would not be destroyed until the government has a plan to replace them.

The $122 billion bill the Senate is now debating to fund the wars in Iraq and Afghanistan also contains nearly $7 billion for reconstruction in hurricane-hit areas.

“Somehow we are sluggishly working towards some type of solution to this real problem,” Ways and Means Committee Chairman Charles Rangel, D-N.Y., said.

The Katrina tax credit bill is paid for by simplifying the procedure by which the Internal Revenue Service can seize company assets in certain employment tax cases.