LA Gets Exchange Funds, but GO Zone Still Left Out

The good news: The U.S. Dept. of Treasury announced last week that Louisiana would receive $114 million as part of the American Recovery and Reinvestment Act (ARRA) Tax Credit Exchange program.

The bad news: GO Zone and Disaster Tax Credits are still being excluded from the exchange program.

Louisiana leaders are very pleased that the state will be receiving this sum of money, and they are certain that the funds will go to great use. These exchange dollars will be incorporated into the 2009 QAP and be distributed in lieu of Low-Income Housing Tax Credits to developments that may not be able to get proper syndication.

“This is wonderful news,” said LHFA President Milton Bailey. “The funds will be used in our continuing efforts to rebuild affordable housing in Louisiana. It will allow us to serve homeless and special needs populations, place residents residing in FEMA trailers into suitable rental accommodations and continue the process of recovering our hurricane displaced residents. We applaud President Obama for taking this first step toward meeting his campaign commitment of helping Louisiana and Gulf Coast communities recover in the wake of hurricanes Katrina, Rita, Gustav and Ike.”

U.S. Senator Mary Landrieu recognized the importance of this infusion of funds saying, "As federal and state agencies work toward long-term solutions, this $114 million investment from the Recovery Act will allow Louisiana to continue its effort to strategically rebuild and modernize workforce housing across our state."

Both leaders have pledged to continue working to include GO Zone and Disaster credits in the exchange program, and are hopeful that their efforts, and those of many others, will be recognized by Treasury.

"I will also continue to work with the Administration on ensuring disaster-impacted states such as Louisiana are able to fully utilize Recovery Act funding to spur redevelopment efforts," said Sen. Landrieu.

Pres. Bailey also commented, "We look forward to receiving the approval necessary from Treasury Secretary Geithner that will allow us to exchange our GO Zone and disaster credits under Section 1602 of ARRA as well."

Legislative Movement

Last week, 2 pieces of legislation were introduced that could serve to rectify the exclusion of the GO Zone Tax Credits from the ARRA Tax Credit Exchange program.

The Disaster State Economic Recovery Act of 2009 (authored by Reps. Davis and Boustany), and its companion in the Senate, the Disaster State Housing Recovery Act of 2009 (authored by Sens. Bayh and Shelby), show bipartisan and bicameral concern for this issue.

While an administrative fix coming directly from Treasury would still be the most effective and efficient remedy, a legislative fix could be a possible solution; provided the wheels of Congress move quickly enough, given the deadlines that developers are facing.

As conversations with Treasury continue in order to persuade an immediate fix, all are encouraged to petition their elected officials to support these two pieces of legislation.