Summary: Legislation has been proposed which would amend the Internal Revenue Code to provide that the interest on certain mortgage revenue bonds will not be exempt from Federal income tax. This bill would require the Secretary of the Treasury, the Secretary of Housing and Urban Development and the Comptroller General of the United States to jointly conduct a study of: the effectiveness of tax exempt mortgage revenue bond programs as compared to existing private and Federal mortgage activities; the extent to which tax exempt mortgage revenue bond programs have been directed toward those who would not otherwise have home ownership opportunities; and the degree to which issuers have taken specific steps to alleviate substantial displacement in the development of mortgage revenue bond programs as they would impact families of low and moderate income. Concern has been expressed by GAO regarding legislative mandates that it participate in studies such as this because of their potential impact on: (1) the agency's capability to perform its full range of required work, and (2) its independence. This comprehensive study would draw heavily on the already limited staff resources, disrupt audit plans, and possibly preclude the undertaking of other important work. GAO views itself as an independent oversight agency in the legislative branch, must maintain its independence and objectivity through nonparticipation in executive branch determinations and evaluations. Accordingly, if GAO participated in this study, it would not be in a sound position to make future independent evaluations of the programs. Therefore, it was recommended that the GAO participation requirement in the joint study be deleted from the proposed legislation. This would allow the Senate Committee on Finance to request GAO to perform any desired work relating to mortgage bond revenues. However, if the Committee decides to involve GAO in the proposed study, GAO believes it could make a greater contribution by either overseeing the study by the other two agencies, or by making a further review after the study has been completed.
