NMTC Coalition Corner

NEW MARKETS TAX CREDIT CONNECTION

Fall 2011

NMTC Coalition Corner

Demand for NMTC Soars On July 27, 2011, the Community Development Financial Institutions (CDFI) Fund received 314 applications requesting $26.7 billion in New Markets Tax Credit (NMTC) allocations for the last $3.5 billion that Congress made available through 2011. This marks the greatest volume of applications since the programs first round opened in 2002, and represents a 26 percent increase in demand up from last years 250 Community Development Entities (CDEs) requesting $23.5 billion. The CDFI Fund anticipates making $3.5 billion in allocation awards to this round of successful applicants in early 2012. The NMTC program remains an effective tool to drive private sector investments to the countrys most highly distressed communities where unemployment rates exceed the national average and access to patient, flexible capital is needed more than ever. This time of market uncertainty only fuels the need for this public-private partnership model. The NMTC works to help finance businesses and community facilities in small towns and urban neighborhoods alike on affordable terms in order to maintain jobs and expand production capacity.

Bipartisan NMTC Extender Bills Introduced A campaign is underway to continue the NMTC program beyond 2011. The New Markets Tax Credit Extension Act of 2011 (S. 996/ H.R. 2655) would extend NMTC for 5 years, through 2016, with $5 billion in annual credit allocation authority to keep pace with annual investment activity. The legislation would also provide alternative minimum tax relief on NMTC investments in keeping with other similar tax credits. U.S. Senators Jay Rockefeller (D-WV) and Olympia Snowe (R-ME) introduced the Senate bill, and U.S. Representatives Jim Gerlach (R-PA) and Richard Neal (D-MA) introduced the House bill. Please encourage your member of Congress to sign on as a co-sponsor of the New Markets Tax Credit Extension Act of 2011. In order to join as a co-sponsor, Senate offices should contact Mark Libell with Senator Rockefeller (202-224-6472) or Scott McCandless with Senator Snowe (202-224-7884). House offices should contact Lori Prater with Rep. Gerlach (202-225-4315) or Kara Getz with Rep. Neal (202225-0547).

Disaster Relief Bill Includes NMTC The Disaster Tax Relief Act of 2011 (S.1456 / H.R.2718) was introduced August 1st in the House by U.S. Representative Ron Kind (D-WI) with co-sponsors Reps. Spencer Bachus (R-AL), Richard Neal (D-MA) and Terri Sewell (D-AL) and in the Senate by Senators John Kerry (D-MA) and Scott Brown (R-MA). The legislation is designed to encourage charitable donations to federally designated disaster areas and to help individuals as well as businesses that suffered property losses as a result of the disaster. The assistance provided in the bill would be available to any community declared a federal disaster area after December 31, 2010.

The bill would provide an additional $250 million in annual NMTC allocation authority for CDEs to make qualified low-income community investments (QLLICIs) in a federally declared disaster area. In making the disaster allocations available to CDEs, the bill directs the CDFI Fund to give priority to CDEs that have a track record of providing capital or technical assistance to businesses or communities within the area or areas for which the disaster allocation is being requested. A CDE awarded an NMTC disaster allocation would be required to meet all other NMTC statutory requirements, including ensuring that all QLICIs are in a qualified low-income community.

Sign Business Support Letter for NMTC We are asking all businesses that have benefited from NMTC financing please to sign the NMTC Coalition sponsored letter to Congress urging extension of the NMTC program. To date, more than 3,000 businesses located in all 50 states and DC have received an NMTC investment, but just 300 are signed on to the Coalitions letter. Please contact your business partners today and ask them to consider signing this letter. Applications for $3.5 billion in credit allocation authority were submitted to the CDFI Fund on July 27, and this will be the final allocation round before the program expires at the end of 2011 unless Congress acts to extend the program. That is why it is so important to show members of Congress that businesses want the program to continue. We want to demonstrate support from every state in the union, and we need your assistance to reach the businesses that are the ultimate beneficiaries of this economic development program. Its easy for businesses to add their name and organization to this letter, available at www.nmtccoalition.org in the Advocacy section.

Save the Date The New Markets Tax Credit Coalition will host its 11th Annual Conference in Washington, DC, on December 5 and 6, so mark your calendars! Agenda, location and other details will be posted to the NMTCC website www.nmtccoalition.org, so check back soon.