WASHINGTON – Senator Chuck Grassley said he has included in the housing bill that is being debated today in the U.S. Senate tax legislation that would help many Iowans who have lost their homes in this month’s flooding and last month’s tornadoes.
The overall bill is intended to address the crisis in the housing market. The tax provisions sponsored by Grassley would make federally-backed revenue bonds available to state and local housing authorities for inexpensive mortgages for people living in Presidentially-declared disaster areas and would simplify the low-income housing tax credit in order to encourage development of new low-income housing and assist with the rehabilitation of historic buildings, including those damaged by the natural disasters in Iowa.
“Along with other federal assistance, I’m pursuing all available tax relief to help Iowans recover from the floods and tornadoes,” Grassley said. “Congress did a lot in the tax area for Katrina victims, and it makes sense that Congress would do the same this year for Iowa and other states affected by devastating natural disasters. The housing bill provides an opportunity to get started on that right now.” Grassley is the Ranking Member of the Senate committee responsible for all tax legislation.
Under current law, mortgage revenue bonds are restricted to first-time home buyers and there are limits on income and purchase price. The disaster-related provision that Grassley authored in the pending legislation would eliminate the first-time home buyer requirement and raise the income limit and purchase price limit for people in disaster areas through 2009.
Grassley is shepherding the disaster-related provisions through the legislative debate today. He said the trip that President Bush is making to Iowa today is “helpful and appreciated as it helps to keep the nation focused on the overwhelming recovery challenge that’s facing Iowans and shows that the administration wants to help Iowans get through the long haul that’s ahead.” Yesterday the administration awarded a $17 million grant from a Labor Department emergency program to Iowa Workforce Development to provide temporary jobs for clean-up and recovery efforts.
Grassley said other tax relief that he’s pursuing for recovery efforts in Iowa includes allowing victims to withdraw money from retirement plans without tax penalties, suspending limits on tax incentives for charitable contributions, creating tax-exempt bond authority to help rebuild infrastructure, removing limitations on personal casualty losses due to natural disaster, and other initiatives.
Separate from the tax portion of the housing bill, the housing legislation includes a provision that would allow Federal Home Loan Banks to guarantee private activity bonds for non-housing bond issues. According to the Iowa Higher Education Loan Authority, this would open up valuable credit lines for underserved markets including a number of colleges and universities damaged by the floods in Iowa.
Grassley will be in his home area of Butler County this weekend to continue helping residents sort through recovery efforts from the May 25 hurricane that wiped out Parkersburg, parts of New Hartford and other sites. Last Friday, he toured flooded areas and met with victims in Cedar Rapids, Waterloo and Iowa City with the leader of the Federal Emergency Management Agency, Governor Chet Culver and Senator Tom Harkin. On Saturday, Grassley and Harkin also went to Mason City, Charles City, and Nashua and Waverly.
“There’s so much loss and so much hurt in Iowa, and it’s going to take months before we start to get back to normal,” Grassley said. “It’s hard to even put the challenge in words, but one thing is certain and that is the resiliency and resolve of the people in Iowa to get through the worst, get through it together and to build a future for themselves, their families and their communities.”
Grassley said he is working with Harkin to make sure federal programs already on the books are available and working for Iowans. Last Saturday, they were able to get the Secretary of Health and Human Services to declare a public health emergency and to temporarily relax federal requirements that might inhibit the delivery of health care during the crisis, including access to hospitals, nursing homes, home health services, prescription medicine records and dialysis services. Grassley and Harkin have asked FEMA to respond promptly to requests from local and state leaders in Iowa and to waive the match requirement for FEMA funds going to flood and tornado relief and recovery in Iowa.
“I appreciate that Senator Harkin is in Iowa with President Bush today,” Grassley said. “He and I are working together very closely to make sure every base is covered for Iowans. We’ve traveled through Iowa together, we’re meeting regularly to sort though everything that needs to happen, and today we’re covered with him in Iowa with the President and me in the Senate to work for disaster recovery provisions in a housing bill.”
Also today, Grassley is circulating a letter for signature to the Iowa delegation asking the federal Department of Health and Human Services to spare Iowa from penalties if it has difficulty meeting federal welfare program requirements because of the floods and tornados. The state may have a difficult time meeting certain administrative and eligibility requirements. Grassley’s letter seeks as much compliance flexibility as possible for the state of Iowa under federal welfare law.
Yesterday, the Iowa senators urged the Attorney General of the United States to prioritize federal Byrne and COPS program grants to Iowa law enforcement agencies to augment other relief available to them. “The resources on the ground have been stretched thin by the natural disasters, and police stations, jails and communication networks have also been damaged by the floods. Putting more money in the pipeline to them could make a big difference to the first responders on the ground in Iowa,” Grassley said.
Grassley said he and Harkin are also working to expedite the release of federal dollars for a new courthouse in Cedar Rapids. They said it makes more sense to move ahead with the new building now rather than to spend money repairing the old one when plans already are underway to build a new courthouse in the very near future.
Grassley said additional opportunities will be pursued to make capital available in devastated areas at below-market rates to help small and medium-sized businesses access cash and survive the disaster.
Earlier this week, Grassley joined Harkin to organize other senators from Midwestern states in a coalition to seek federal program assistance and other temporary federal policies to assist victims of floods and tornados that have struck this year throughout the region.