WASHINGTON, DC – U.S. Senator Pat Roberts today announced a military tax relief bill, the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008, was approved by the Senate following an agreement to move his legislation to help ensure military families have access to affordable housing.

"I am pleased to announce that the Senate Finance Committee and the House Ways and Means Committee have agreed to move forward on my bill to address housing problems in communities around Ft. Riley," Senator Roberts said.

Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee and House Ways and Means Committee Chairman, Charles Rangel (D-NY), have agreed to consider the legislation during the debate on the housing package.

"The bill we passed today contains most, but not all, of the provisions endorsed by the Senate. One provision that is not included would have provided more flexibility to owners and investors in residential multi-family housing involving low-income housing tax credits, to offer more military personnel housing in complexes near military bases," said Senator Baucus. "Senator Pat Roberts (R-Kans.) brought this proposal to the attention of the Senate, and I intend to work with Senator Roberts and with our House counterparts to move this provision forward."

Roberts’ housing legislation, passed unanimously twice by the Senate but recently removed in the House, would change Low Income Housing Tax Credit (LIHTC) guidelines to ensure Basic Allowance for Housing (BAH) does not count against servicemembers when applying to live in affordable rental housing.

The issue is especially troubling in Geary County where affordable housing is in high demand as more and more families are redeployed to Ft. Riley. Under the recent base realignment process, thousands of troops and their families will be posted to Ft. Riley over the next several years.

The Low-Income Housing Tax Credit (LIHTC) was created by the Tax Reform Act of 1986 as an alternative method to finance housing for low and moderate income households in private developments. It is managed by the states and has been one of the most successful housing programs ever created by Congress.

Unfortunately, LIHTC guidelines are inconsistent and often harm the families of some enlisted military personnel whose basic allowance for housing makes their income too high to be eligible for LIHTC homes.

"The basic allowance is not true, disposable income," Senator Roberts said, "It is not counted as income when soldiers file their income taxes and, therefore, it should not be counted as income when they apply for housing built using tax credits. My legislation takes the basic allowance out of the formula for eligibility for LIHTC housing."

"In Kansas, this is especially necessary when there is safe, affordable housing around Ft. Riley that could be available for our service members if it weren’t for the inconsistencies in the guidelines," Roberts said.

The HEART act, just approved today, provides tax relief for veterans, servicemembers, and their employers. Provisions in the legislation will:

• Make permanent a provision that allows servicemembers to count their non-taxable combat pay when determining their eligibility for the earned income tax credit.
• Provide tax relief for small businesses when they continue paying some salary to members of the National Guard and Reserve who are called to duty. Senator Roberts co-sponsored similar legislation in 2005.
• Allow all veterans to use qualified mortgage bonds to purchase their homes.
• Eliminate burdensome IRS rules for reporting of differential pay. This makes it easier for members of the National Guard and Reserve who are called to active duty to file their taxes and simpler for employers to keep contributing to those employees’ retirement plans.
• Permit recipients of military death benefit gratuities to roll over the amounts received, tax-free, to a Roth IRA or an Education Savings Account
• Make permanent a provision to allow active duty reservists to make penalty-free withdrawals from retirement plans;
• Extend a provision that gives retired veterans more time to claim a tax refund on some types of disability benefit payments.
• Make permanent a provision that gives employees in the intelligence service a longer period of time to meet residency requirements in order to exclude profits from the sale of their home from capital gains tax, which is often necessary due to frequent deployment. As the former Chairman of the Senate Select Committee on Intelligence, Roberts pushed for similar legislation last year.

Senator Roberts is a member of the Senate Committee on Finance and is an outspoken advocate for men and women in uniform and their families.

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