The House Ways and Means Committee voted yesterday to give the locally based Federal National Mortgage Association (Fannie Mae) a tax break to put the company on an equal footing with other financial institutions.
By a voice vote after less than 10 minutes of debate, the committee agreed to permit Fannie Mae to increase the time it can write off its losses against income earned in earlier years. Under the legislation, Fannie Mae could carry back its losses for 10 years, instead of the current three it is now permitted. At the same time, the legislation would permit Fannie Mae to carry forward any remaining unused losses for only five years, instead of the current 15.
The same carryback provisions now apply to banks and savings and loan institutions.
The change had been requested by Fannie Mae, a quasigovernmental organization that is the largest single source of residential mortage credit in the United States. Contending that it was operating as other financial institutions operated, Fannie Mae argued it should have the same carryback provisions.
Under the provision approved yesterday, the change for Fannie Mae could cost the U.S. Treasury $14 million in fiscal year 1983.
Treasury officials supported the change, but opposed another one adopted by the committee as it hurried to complete a series of last-minute bills in the hopes of winning congressional passage before Congress adjourns for the Christmas recess.
By a 29-6 vote, the committee agreed to a provision eagerly sought by business groups that would delay for one year a new tax provision that would require new accounting procedures on inventories transferred during a liquidation.
Charging that the new procedures would result in a new and unfair tax, business groups asked that the Jan. 1, 1982 effective date be postponed for a year to give Congress time to review the new inventory requirement.