Senate to Vote on Tax Package Monday; House Passage Remains Uncertain

On Thursday, the Senate unveiled final details of its $858 Billion 10-year tax bill and will vote on the procedural motion to pass the bill Monday.  However, it is unclear whether the House can pass the bill in its current form.  Below is a summary of the provisions.  Click here for a copy of the entire bill.

Fannie and Freddie in Negotiations on Write Downs

Reports this week indicate that Fannie Mae and Freddie Mac are in negotiations with the Federal Housing Finance Agency (FHFA) on a plan to write down so-called “underwater loans” on their balance sheets. The Obama administration wants the firms to join a program run by the Federal Housing Administration that allows banks and other creditors, which agree to write down mortgages, to essentially hand off the reduced loans to the FHA. Unlike most loan-modification efforts, the FHA program is open only to borrowers who aren’t behind on their payments. Starting in October, banks were able to receive additional subsidies if they first write down loan balances for borrowers owing at least 15% more than their home’s current value.

House Financial Services Committee Announces New Members

On Thursday, the House Financial Services Committee announced the following leadership for the 112th Congress:

Rep. Spencer Bachus, Chairman

Rep. Jeb Hensarling, Vice Chairman, Financial Services Committee

Rep. Judy Biggert, Chairman, Insurance, Housing and Community Opportunity
Jurisdiction: Insurance generally, housing, urban development, and the Department of Housing and Urban Development.

Rep. Shelley Moore Capito, Chairwoman, Financial Institutions Subcommittee and Consumer Credit
Jurisdiction: Banks and banking, depository institutions, federal deposit insurance, and safety and soundness.

Rep. Scott Garrett, Chairman, Capital Markets and Government-Sponsored Enterprises Subcommittee
Jurisdiction: Capital markets, securities, and government sponsored enterprises.

Rep. Ron Paul, Chairman, Domestic Monetary Policy Subcommittee
Jurisdiction: Domestic monetary policy, currency, precious metals, valuation of the dollar, economic stabilization, defense production, commodity prices, financial aid to commerce and industry.

Rep. Gary Miller, Chairman, International Monetary Policy Subcommittee
Jurisdiction: International monetary policy, international finance and banking, international financial and monetary organizations, including the IMF and World Bank, and the promotion of international trade in financial services.

Rep. Randy Neugebauer, Chairman, Oversight and Investigations Subcommittee
Jurisdiction: Oversight of all matters within the jurisdiction of the full Committee.

While not yet formally announced, the expected new members on the committee are:

Rep. Blaine Luetkemeyer (R-MO), Rep. Lynn Westmoreland (R-GA), Nan Hayworth (R-NY), Rep. Michael Grimm (R-NY), Rep. Robert Hurt (R-VA), Rep. Steve Stivers (R-OH), Rep. Bob Dold (R-TX), Rep. Bill Huezienga (R-MI), Rep. Michael Fitzpatrick (R-PA), Rep. Steve Pearce (R-NM), Rep. Quico Canseco (R-TX), Rep. Sean Duffy (R-WI), Rep. Randy Hultgren (R-IL)

Summary of Tax Bill

TITLE I—TEMPORARY EXTENSION OF TAX RELIEF

Sec. 101. Temporary extension of 2001 tax relief.

Sec. 102. Temporary extension of 2003 tax relief.

Sec. 103. Temporary extension of 2009 tax relief.

TITLE II—TEMPORARY EXTENSION OF INDIVIDUAL AMT RELIEF

Sec. 201. Temporary extension of increased alternative minimum tax exemption amount.

Sec. 202. Temporary extension of alternative minimum tax relief for nonrefundable personal credits.

TITLE III—TEMPORARY ESTATE TAX RELIEF

Sec. 301. Reinstatement of estate tax; repeal of carryover basis.

Sec. 302. Modifications to estate, gift, and generation-skipping transfer taxes.

Sec. 303. Applicable exclusion amount increased by unused exclusion amount of deceased spouse.

Sec. 304. Application of EGTRRA sunset to this title.

TITLE IV—TEMPORARY EXTENSION OF INVESTMENT INCENTIVES

Sec. 401. Extension of bonus depreciation; temporary 100 percent expensing for certain business assets.

Sec. 402. Temporary extension of increased small business expensing.

TITLE V—TEMPORARY EXTENSION OF UNEMPLOYMENT INSURANCE AND RELATED MATTERS

Sec. 501. Temporary extension of unemployment insurance provisions.

Sec. 502. Temporary modification of indicators under the extended benefit program.

Sec. 503. Technical amendment relating to collection of unemployment compensation debts.

Sec. 504. Technical correction relating to repeal of continued dumping and subsidy offset.

Sec. 505. Additional extended unemployment benefits under the Railroad Unemployment Insurance Act.

TITLE VI—TEMPORARY EMPLOYEE PAYROLL TAX CUT

Sec. 601. Temporary employee payroll tax cut.

TITLE VII—TEMPORARY EXTENSION OF CERTAIN EXPIRING PROVISIONS

Subtitle A—Energy

Sec. 701. Incentives for biodiesel and renewable diesel.

Sec. 702. Credit for refined coal facilities.

Sec. 703. New energy efficient home credit.

Sec. 704. Excise tax credits and outlay payments for alternative fuel and alternative fuel mixtures.

Sec. 705. Special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities.

Sec. 706. Suspension of limitation on percentage depletion for oil and gas from marginal wells.

Sec. 707. Extension of grants for specified energy property in lieu of tax credits.

Sec. 708. Extension of provisions related to alcohol used as fuel.

Sec. 709. Energy efficient appliance credit.

Sec. 710. Credit for nonbusiness energy property.

Sec. 711. Alternative fuel vehicle refueling property.

Subtitle B—Individual Tax Relief

Sec. 721. Deduction for certain expenses of elementary and secondary school teachers.

Sec. 722. Deduction of State and local sales taxes.

Sec. 723. Contributions of capital gain real property made for conservation purposes.

Sec. 724. Above-the-line deduction for qualified tuition and related expenses.

Sec. 725. Tax-free distributions from individual retirement plans for charitable purposes.

Sec. 726. Look-thru of certain regulated investment company stock in determining gross estate of nonresidents.

Sec. 727. Parity for exclusion from income for employer-provided mass transit and parking benefits.

Sec. 728. Refunds disregarded in the administration of Federal programs and federally assisted programs.

Subtitle C—Business Tax Relief

Sec. 731. Research credit.

Sec. 732. Indian employment tax credit.

Sec. 733. New markets tax credit.

Sec. 734. Railroad track maintenance credit.

Sec. 735. Mine rescue team training credit.

Sec. 736. Employer wage credit for employees who are active duty members of the uniformed services.

Sec. 737. 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.

Sec. 738. 7-year recovery period for motorsports entertainment complexes.

Sec. 739. Accelerated depreciation for business property on an Indian reservation.

Sec. 740. Enhanced charitable deduction for contributions of food inventory.

Sec. 741. Enhanced charitable deduction for contributions of book inventories to public schools.

Sec. 742. Enhanced charitable deduction for corporate contributions of computer inventory for educational purposes.

Sec. 743. Election to expense mine safety equipment.

Sec. 744. Special expensing rules for certain film and television productions.

Sec. 745. Expensing of environmental remediation costs.

Sec. 746. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.

Sec. 747. Modification of tax treatment of certain payments to controlling exempt organizations.

Sec. 748. Treatment of certain dividends of regulated investment companies.

Sec. 749. RIC qualified investment entity treatment under FIRPTA.

Sec. 750. Exceptions for active financing income.

Sec. 751. Look-thru treatment of payments between related controlled foreign corporations under foreign personal holding company rules.

Sec. 752. Basis adjustment to stock of S corps making charitable contributions of property.

Sec. 753. Empowerment zone tax incentives.

Sec. 754. Tax incentives for investment in the District of Columbia.

Sec. 755. Temporary increase in limit on cover over of rum excise taxes to

Puerto Rico and the Virgin Islands.

Sec. 756. American Samoa economic development credit.

Sec. 757. Work opportunity credit.

Sec. 758. Qualified zone academy bonds.

Sec. 759. Mortgage insurance premiums.

Sec. 760. Temporary exclusion of 100 percent of gain on certain small business stock.

Subtitle D—Temporary Disaster Relief Provisions

SUBPART A—NEW YORK LIBERTY ZONE

Sec. 761. Tax-exempt bond financing.

SUBPART B—GO ZONE

Sec. 762. Increase in rehabilitation credit.

Sec. 763. Low-income housing credit rules for buildings in GO zones.

Sec. 764. Tax-exempt bond financing.

Sec. 765. Bonus depreciation deduction applicable to the GO Zone.

TITLE VIII—BUDGETARY PROVISIONS

Sec. 801. Determination of budgetary effects.

Sec. 802. Emergency designations.

More Information

If you have any questions regarding any of these issues, please contact:

Matt Jessee, Policy Advisor
matt.jessee@bryancave.com
1 314 259 2463