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CDFI Fund Releases Electronic NMTC Application

WASHINGTON – Aug. 20, 2014

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The Community Development Financial Institutions (CDFI) Fund today released the electronic application for the 2014 round of the New Markets Tax Credit (NMTC) program. Applications for the 2014 round are due Oct. 1 and will only be accepted electronically through the myCDFI Fund system. The CDFI Fund takes questions about the application until 5 p.m. EDT on Sept. 29.

To learn more about the NMTC application, register for the Novogradac 2014 NMTC Application Webinar on Aug. 21.  

Treasury Guarantees $325 Million through CDFI Bond Guarantee Program

WASHINGTON – Aug. 20, 2014

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The U.S. Treasury today announced that it has guaranteed $325 million through the Community Development Financial Institutions (CDFI) Bond Guarantee program. Under the program, CDFIs will issue federally backed bonds and use the proceeds to extend credit to the CDFI industry for economic development projects in low-income communities. As much as $750 million in bond guarantee authority is available to eligible CDFIs in fiscal year 2014.

Eligible CDFIs and qualified issuers in the inaugural round of the program are Clearinghouse CDFI, Community Development Trust LP, Local Initiatives Support Corporation and Enterprise Community Loan Fund Inc. Treasury said it would announce additional borrowers selected to participate in the program in coming weeks. Unless the CDFI Bond Guarantee program is reauthorized by Congress, it will sunset Sept. 30, 2014.

Tune into the Aug. 26 Tax Credit Tuesday podcast to learn more.

CDFI Fund Calls for 2014 NMTC Allocation Application Reviewers

WASHINGTON – Aug. 15, 2014

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The Community Development Financial Institutions (CDFI) Fund has issued a request for community and economic development practitioners to serve as application reviewers and alternates for the 2014 round of the New Markets Tax Credit (NMTC) program. Reviewers will provide first-stage evaluations of the applications. The CDFI Fund requires reviewers and alternates to have considerable expertise in community and economic development finance and prefers applicants to have specialized knowledge in commercial finance.

Tune in to the Aug. 26 Tax Credit Tuesday podcast to learn more about reviewer requirements and responsibilities.

CDFI Fund to Hold Mapping System Webinar for NMTC Community

WASHINGTON – Aug. 14, 2014

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The Community Development Financial Institutions (CDFI) Fund will hold a webinar on the CDFI Information Mapping System (CIMS3) for New Markets Tax Credit (NMTC) program participants on Aug. 19 at 3 p.m. EDT. CIMS3 is a web-based tool that allows organizations interested in applying for certification as a CDFI or community development entity, or for funding through one of the CDFI Fund’s award programs, to plot their eligible service areas and investments. The webinar is meant to help users navigate the system’s features.  

NMTC Coalition Issues Response to GAO, Coburn NMTC Reports

WASHINGTON – Aug. 11, 2014

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The New Markets Tax Credit Coalition in a press release today responded to two reports that were critical of the new markets tax credit (NMTC). In its report, “New Markets Tax Credit: Better Controls and Data Are Needed to Ensure Effectiveness,” the U.S. Government Accountability Office (GAO) said that NMTC investors receive an unduly large annual return. In its statement, the NMTC Coalition counters that GAO overestimated those figures and that actual NMTC investor returns are aligned with market rates of 6 to 7 percent annually. The group also responded to a report released by Sen. Tom Coburn, R-Okla., “Banking on the Poor,” which suggested that the NMTC has not succeeded in helping struggling communities. The NMTC Coalition asserts in its response that the program has delivered more than $60 billion in capital to businesses in the nation’s poorest communities.

Tune in to the Aug. 19 Tax Credit Tuesday podcast to learn more about the reports and the NMTC industry’s response.

GAO Report Calls for Further NMTC Guidance, Controls

WASHINGTON – Aug. 11, 2014

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The U.S. Government Accountability Office (GAO) today released a report discussing new markets tax credit (NMTC) financial structures. In “New Markets Tax Credit: Better Controls and Data Are Needed to Ensure Effectiveness,” the GAO reports that NMTC structures have become more complex and less transparent over time in part because NMTCs are often combined with other federal, state and local government funds. The GAO recommends that Treasury issue further guidance on how NMTCs can be combined with other government programs; implement controls to prevent unnecessary duplication and above-market rates of return; and ensure the completeness and accuracy of data collected on fees, costs, loan performance, equity remaining in the business after the seven-year compliance period and project failure rates.

Tune in to the Aug. 19 Tax Credit Tuesday podcast to learn more about the report.

CDFI Fund Opens 2014 NMTC Round

WASHINGTON – Aug. 5, 2014

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The Community Development Financial Institutions (CDFI) Fund today released  the notice of allocation availability (NOAA) opening the next round of competition under the New Markets Tax Credit (NMTC) program. The NOAA makes $5 billion in tax credit authority available under the calendar year (CY) 2014 round, pending congressional authorization. Under the 2014 NOAA, applications are due Oct. 1, 2014. Allocation applicants that are not yet certified as CDEs must submit an application for certification as a CDE on or before Aug. 22, 2014 to be eligible for an NMTC allocation. Application information has also been posted online at www.newmarketscredits.com.  

The CDFI Fund announced it will conduct two one-hour conference calls to answer applicant questions on Aug. 12 and 14. Novogradac & Company will also host an application webinar in the next few weeks. Details will be available shortly at www.novoco.com/webinars.  

The CY 2014 application round and congressional authorization will also be discussed at the Novogradac New Markets Tax Credit Conference, Oct. 23-24 in New Orleans.

In the meantime, parties seeking NMTC allocation are also reminded that QALICBs may fill out this allocation request form to have their allocation requests posted on an online list of allocation requests by state. The information will be available for public review online at www.newmarketscredits.com.

CDFI Fund Releases 2013 Allocation Agreement Template Draft

WASHINGTON – Aug. 4, 2014

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The Community Development Financial Institutions (CDFI) Fund has released the draft 2013 allocation agreement template. The document contains a few significant changes from the previous draft. Definitions were added for controlling entity and a state. The document also provides additional guidance about disclosure requirements for regulated institution controlling entities and maintaining controlling entities. The template for the allocation agreement provides boilerplate provisions of the terms and conditions that community development entities enter into with the CDFI Fund. The exact terms and conditions of each specific new markets tax credit (NMTC) allocation is set forth in the individualized agreements executed by the CDFI Fund and each allocatee. 

CDFI Fund Releases 10 Years of NMTC Investment Data

WASHINGTON – July 24, 2014

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The Community Development Financial Institutions (CDFI) Fund today released a breakdown of new markets tax credit (NMTC) investments reported to the CDFI Fund through fiscal year (FY) 2012. The data shows that more than $31.1 billion in NMTC investments made between FY 2003 and FY 2012 have revitalized low-income communities. The CDFI Fund found that 57.9 percent of investments were in real estate and leasing activities; 40.1 percent of investments were in operating businesses; and 1.9 percent of investments were in other financing purposes.

Tune in to the Tax Credit Tuesday podcast on July 29 to learn more about how the NMTC has been put to use in low-income communities across the country.

IRS Invites Comments on NMTC Regulations

WASHINGTON – July 14, 2014

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The Internal Revenue Service (IRS) in tomorrow’s Federal Register will publish a notice inviting comments concerning existing final regulation T.D. 9171, New Markets Tax Credits. This regulation finalized the rules relating to the new markets tax credit (NMTC) under Internal Revenue Code 45D and replaced the temporary regulations that expired Dec. 23, 2004. There are no changes proposed to the existing regulation at this time. Written comments are due on or before Sept. 12, 2014.

Live Webinar on Community Reinvestment Act Questions and Answers

WASHINGTON – July 11, 2014

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The Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (OCC) announced today that they will host a live interagency webinar regarding revisions to the “Interagency Questions and Answers Regarding Community Reinvestment” and the revised “Large Institutions Community Reinvestment Act Examination Procedures” on July 17at 2 p.m. Eastern. Participants must register by July 17.

CDFI Fund Requests Information for Minority CDE Training

WASHINGTON – June 24, 2014

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The Community Development Financial Institutions (CDFI) Fund today released a request for information (RFI) for new markets tax credit (NMTC) industry  and subject-matter experts to assist in developing minority community development entity (CDE) training and related technical assistance. The training would target CDEs that are minority-controlled nonprofit entities, minority-owned for-profit entities or minority depository institutions (MDIs) and inform them of how they can participate in the NMTC program.  The RFI asks interested vendors to submit capability statements that demonstrate their knowledge and expertise of the NMTC program; familiarity with minority CDEs that primarily serve minority communities; familiarity with federal financial institution regulatory agencies and regulatory processes; familiarity with underserved/low-income communities; and ability to effectively market all training and technical assistance.  Statements must be submitted by July 8.

Tune in to next week’s Tax Credit Tuesday podcast to learn more about the CDFI Fund’s request for information.

Bipartisan Letter Urges NMTC Extension

WASHINGTON – June 24, 2014

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A group of 50 U.S. Representatives yesterday sent a joint letter to Ways and Means Chairman Dave Camp, R-Mich., and Ranking Member Sander Levin, D-Mich., urging them to support an extension of the new markets tax credit (NMTC). Circulated by Reps. Mike Turner, R-Ohio, and Chaka Fattah, D-Pa., the sign-on letter noted that businesses and jobs financed by the NMTC produce enough income tax revenue to offset the cost of the program.

Deadline Extended for NMTC Reauthorization Sign-On Letter

WASHINGTON – June 12, 2014

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The deadline to sign a letter urging House Ways and Means Committee Chairman Dave Camp, R-Mich., and Ranking Member Sandy Levin, D-Mich., to support reauthorization of the new markets tax credit (NMTC)  has been extended to close of business Thursday, June 19. Circulated by Reps. Mike Turner, R-Ohio, and Chaka Fattah, D-Pa., the sign-on letter notes that the NMTC has directly created more than 550,000 jobs and generated $60 billion in capital investment to underserved communities since 2003. As of June 11, the letter had 29 signatories.

Report: NMTC Created More than 54,000 Jobs in 2013

WASHINGTON – June 10, 2014

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The New Markets Tax Credit (NMTC) Coalition today released its 2014 NMTC Progress Report. The report outlines how the NMTC was used and describes the impact it had on economically distressed communities during calendar year 2013, which includes creating more than 54,000 jobs and nearly 2,500 housing units. The report also provides updated investment and transaction information from NMTC allocatee survey respondents for calendar year 2013 and examples of successful projects, among other things.  

CDFI Fund Awards $3.5 Billion in NMTC Allocation Authority

WASHINGTON – June 5, 2014

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The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) today announced that 87 community development entities (CDEs) have been selected to receive $3.5 billion in tax credits under the under the calendar year 2013 round of the New Markets Tax Credit (NMTC) program. The 87 CDEs receiving awards were selected from a pool of 310 applicants that requested more than $25.9 billion. The 2013 allocatees are headquartered in 32 different states and the District of Columbia, and they have identified principal service areas that will cover nearly every state in the country and the District of Columbia. A list of the organizations selected and additional information about today’s announcement can be found on the CDFI Fund's web site. Links to information from all 11 NMTC allocation rounds to date can also be found online at www.newmarketscredits.com under Allocations by Year.

Join Novogradac & Company at the Spring New Markets Tax Credit Conference in Washington, D.C, June 12-13, to discuss the latest allocation round and what lies ahead for the NMTC program.  

CDFI Fund Opens 2014 Bond Guarantee Program Application Period

WASHINGTON – May 9, 2014

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The Community Development Financial Institutions (CDFI) Fund today opened the fiscal year (FY) 2014 application period for the CDFI Bond Guarantee Program in anticipation of the publication of the notice of guarantee authority (NOGA) in the Federal Register on May 13. The NOGA will make up to $750 million in bond guarantee authority available to eligible CDFIs in FY 2014. Under the program, CDFIs will issue federally backed bonds and use the proceeds to extend credit to the CDFI industry for community development projects. For the FY 2014 round, qualified issuer applications must be submitted by June 23 and guarantee applications must be submitted by June 30.

Legislation Would Increase NMTC Allocations to Disaster Areas

WASHINGTON – April 15, 2014

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Last week, a bipartisan group of legislators introduced the National Disaster Tax Relief Act of 2014, which would provide a $500 million annual increase through 2016 in new markets tax credit allocations to federally declared disaster areas in 2012 or 2013. S. 2233 has been referred to the Senate Finance Committee.

Tune in to this afternoon’s Tax Credit Tuesday podcast to learn more about the bill.

Senate Finance Committee Passes Tax Extenders Bill

WASHINGTON – April 3, 2014

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The Senate Finance Committee today passed the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act by voice vote. The bill incorporates modifications released today by Chairman Ron Wyden, D-Ore., including a provision to claw back unused new markets tax credits (NMTCs) and use them to finance a Manufacturing Communities Tax Credit for investments in communities that have faced significant manufacturing job losses.

Bipartisan Bill Introduced to Make NMTC Permanent

WASHINGTON – April 2, 2014

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House Ways & Means Committee Members Jim Gerlach, R-Pa.,  and Richard Neal, D-Mass., today reintroduced bipartisan legislation that would make permanent the new markets tax credit (NMTC). In a statement about the bill’s introduction, the NMTC is credited with creating more than 550,000 jobs and incentivizing more than $60 billion in private investment to strengthen economically-distressed communities. A copy of the bill, H.R. 4365, will be posted at www.newmarketscredits.com as soon as the text becomes available.

Senate Finance Committee to Consider Tax Extenders

WASHINGTON – April 1, 2014

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The Senate Finance Committee will markup legislation on “tax extenders” on Thursday, April 3. The bill, entitled the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, addresses a number of tax provisions that have expired or will expire at the end of this year. Among other things, the legislation would extend for two years important affordable housing and community development provisions. The committee also released a summary of the bill’s provisions and a cost estimate.

The legislation would extend the New Markets Tax Credit (NMTC) program for two years, permitting a maximum annual amount of qualified equity investments of $3.5 billion.

For more information, tune in this afternoon to the Tax Credit Tuesday podcast. Additional details may also become available leading up to the hearing, so stay tuned.

Bill Introduced to Amend Ohio State NMTC

COLUMBUS, Ohio – March 19, 2014

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Ohio Rep. Terry Boose introduced a bill last week that would allow more taxpayers and investments to qualify for the state new markets tax credit (NMTC) program. H.B. 478 would eliminate the requirement that a taxpayer receive a federal NMTC allocation in order to qualify for the state NMTC. The bill would also allow taxpayers to claim the NMTC earlier in the credit schedule and allow investments to be made in low-income businesses that derive 15 percent or more of their annual revenue from the rental or sale of real property. 

Stakeholders Urge Extension of NMTC Program

WASHINGTON – March 7, 2014

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A group of more than 1,400 businesses, investors, nonprofit organizations and community leaders yesterday sent letters to the House and Senate tax-writing committees, urging legislators to extend the New Markets Tax Credit (NMTC) program. The letters describe the NMTC as an effective community development tool that has directly created more than 550,000 jobs and leveraged $60 billion in capital investment since 2003.  

Administration Budget Would Permanently Extend NMTC

WASHINGTON – March 4, 2014

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In its proposed budget for fiscal year (FY) 2015, the Obama administration proposes permanently reauthorizing the New Markets Tax Credit (NMTC) program in 2015 and requests $5 billion of allocation authority per year, as well as authority to offset alternative minimum tax (AMT) liability. The budget also proposes a new Manufacturing Communities Tax Credit (MCTC), with $2 billion in tax credit authority in each of three years through 2017. The budget would also extend the CDFI Bond Guarantee program’s authorization by one year, through FY 2015, at a $1 billion guarantee level.

CDFI Fund to Award Only CY 2013 NMTC Allocation Authority

WASHINGTON – Feb. 27, 2014

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The Community Development Financial Institutions (CDFI) Fund announced today that it will only award Calendar Year (CY) 2013 new markets tax credit allocation authority in the amount of $3.5 billion during the current application round. It will not award CY 2014 allocation authority at this time. The CDFI Fund has amended its July 29, 2013 Notice of Allocation Authority (NOAA) because Congress has not authorized allocation authority for CY 2014. The CDFI Fund said that it anticipates making CY 2013 awards in late spring. The CDFI Fund plans to publish the amended NOAA in the Federal Register next week.

Tune into the March 4 Tax Credit Tuesday podcast to hear more about the change.

Tax Reform Proposal Would Alter LIHTC, Repeal HTC, ITC and PTC

WASHINGTON – Feb. 26, 2014

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Ways and Means Chairman Dave Camp, R-Mich., today released a draft tax reform proposal that would repeal the historic rehabilitation tax credit (HTC) and the renewable energy investment tax credit (ITC) and production tax credit (PTC). The draft does not include any reference to the new markets tax credit (NMTC).

The proposal would retain the low-income housing tax credit (LIHTC) in the revised tax code but would make several changes. Under the proposal, state and local housing authorities would allocate qualified basis, rather than tax credits. The proposed annual amount of allocable basis for each state would be equal to $31.20 multiplied by the state’s population, with a minimum annual amount of $36,300,000. In addition, the draft calls for including repealing the 4 percent credit, extending the credit period to 15 years from 10, repealing the increased basis rule for high-cost and difficult development areas, revising the general-public-use requirement to provide occupancy preferences only for individuals with special needs and veterans, and repealing the requirement that states include the energy efficiency and historic nature of the development in their selection criteria.

Novogradac & Company is developing a detailed analysis of the proposal, so stay tuned.

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