Even though the Net-Operating-Loss Carry Back (NOL) provision has been stripped from the housing relief bill now before the U.S. Senate, an independent lobbyist who has been working with 16 large public and private home builders on the issue said there is considerable support among lawmakers for such a provision and that NOL is not dead.

According to Tom Crawford, CEO of c2 group, an independent lobbying firm hired by 16 large public and private home builders to help gain support for NOL, members of both the House and Senate have expressed a continued interest in looking at the tax benefit as a viable tool necessary to provide a stabilizing effect on not just housing, but on many distressed industries struggling during the current economic downturn.

According to Crawford, support among Democrats comes from Sen. Max Baucus (D. Montana), Sen. Kent Conrad (D. North Dakota), Sen. Debbie Stabenow (D. Michigan), Sen. Ken Salazar (D. Colorado), Sen. Patty Murray (D. Washington) and Senate Majority Leader Harry Reid (D. Nevada). On the Republican side, Sen. Gordon Smith (R. Oregon), Sen. John Ensign (R. Nevada), Minority Whip Jon Kyl (R. Arizona) and Sen. Mel Martinez (R. Florida) all remain supportive of the tax policy extension.

"Given that level of bipartisanship, no one can say that this issue is dead," said Crawford. "Congress has made a great start to address the housing crisis by focusing on the tax credit. Once that is resolved, we have to continue to look for relief at every opportunity."

The National Association of Home Builders has withdrawn its support for NOL in its efforts to gain passage of a tax credit for first time home buyers. As the bill stands now, it does not contain NOL, and the tax credit is income-limited and would have to be paid back over as many as 15 years.

Though similar NOL carry-back provisions were effective and uncontroversial after both 9/11 and the Savings & Loan crisis of the 1980s, the issue was positioned by labor and environmental groups as a bailout of builders and mortgage lenders. The impact of NOL would be much wider than those two industries, however, and could have benefits in the banking, automotive, airline, and building-product manufacturing industries.

"Any company that has shareholders and is established as a C Corp could potentially benefit [from NOL]," said Albert Pisanelli, corporate tax director for Orleans Homebuilders. "Tax policy exists to help the economy when it needs it the most," said Pisanelli. "This is not a government program that uses government funds. It uses the time value of money. NOL is in the law now, and this is about getting money to people in a time when some say we are in a recessionary period. When better to get that money and impact the economy?"

It is the contention of Pisanelli and other building industry financial executives that increasing the number of years businesses can carry-back losses to recoup income taxes that were paid is not a bailout because the losses will instead be carried forward into future tax accounting. Either way, losses get written against profits, thereby reducing taxes.

Getting the tax carry-back back into the bill now under consideration in the Senate is considered a long shot. "In the context of the current housing bill, it's unlikely though not impossible," said Crawford. "But the reality is that there are other vehicles coming after this, and members will be looking for relief. NOL is a viable option, and other industries need the relief as well, so they will continue to pursue it."

Hovnanian Enterprises CEO Ara Hovnanian agreed. "It doesn't mean it's dead forever. We'll work on getting [the tax credit] passed and then go back and pursue the NOL going forward."

"It'll depend on what happens as the stimulus moves through, what effect it will have and what the fallout may be," said Pisanelli. "In politics, you never know when the next opportunity is going to be. There may be another opportunity, so hopefully we'll get another bite of the apple."

Among the companies represented by c2 are Beazer, Centex, Hovnanian, KB, Lennar, M.D.C., M/I, Meritage, Orleans, Pulte, Shea, Standard Pacific, Toll and TOUSA as well as TEJON RANCH COMPANY and TFC HOLDINGS.