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New Market Tax Credit News Briefs - June 2023

Reps. Claudia Tenney, R-New York, and Terri Sewell, D-Alabama, introduced the New Markets Tax Credit Extension Act April 6 in the U.S. House of Representatives. The bill would make the new markets tax credit (NMTC) permanent, set the initial annual allocation amount at $5 billion, provide for annual inflation adjustments and allow NMTC to be taken against alternative minimum tax liability. The New Markets Tax Credit Extension Act matches S. 234, which was introduced in February in the U.S. Senate. The alternative minimum tax relief would apply to taxable years beginning after Dec. 31, 2022. Tenney and Sewell introduced the bill with 24 co-sponsors, all but one of whom are members of the tax-writing Ways and Means Committee.

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The Community Development Financial Institutions (CDFI) Fund announced in May that it expects to open the new CDFI certification process in the fall. The updated certification process was originally scheduled for this spring, but was postponed in January. During the coming months, the CDFI Fund will continue to review comments, publish an updated application form, conduct public outreach, enhance the infrastructure on its Awards Management Information System for data and material submission, and institute a grace period for currently certified CDFIs to complete the new certification application. Certified CDFIs are still required to submit an annual certification and data collection report in accordance with their existing schedule.

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Legislation introduced in the Louisiana House of Representatives would provide $150 million in qualified equity investment (QEI) authority beginning Aug. 1, 2023, for the state NMTC and revise certain definitions. H.B. 510 retains previous requirements for QEIs, but applies them to investments made after Aug. 1. The Louisiana NMTC is for 45% of QEIs with a $55 million annual cap, which would be expanded for 2023 under this legislation.

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A $28 million redevelopment began this spring on Coliseum, an 85,000-square-foot property on Lake Street in Minneapolis. Nonprofit developer Redesign and B are leading the effort. The building was part of $350 million in damages that occurred during civic unrest in 2020 following the murder of George Floyd by a Minneapolis police officer. The development team plans to restore the site to host 25 small businesses owned by people of color. Participants in the capital stack include U.S. Bank and Sunrise Bank and financing includes NMTC equity. The site is due for completion in 2024.

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Miracles Bakery in Millersburg, Kentucky, opened April 14. The baker produces gluten-free and vegan baked goods for those living with food allergies. The business was part of the renovation of McIntyre Hall at Mustard Seed Hill, which included NMTC and grants, among other sources. The bakery chose to relocate from a Lexington, Kentucky, location after a rent spike as a result of the COVID-19 pandemic.

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Capital One invested in NMTCs for the second phase of a $10 million endeavor to build a new facility for the Evanston Child Development Center (ECDC) in Evanston, Wyoming. Construction is due for completion in January 2024. ECDC, a nonprofit, focuses on early childhood education and development for children and their families. The second phase adds a 7,049-square-foot addition to the initial phase. MoFi allocated the credits.

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U.S. Bank announced in April it would rebrand its community development arm, U.S. Bancorp Community Development Corporation, as U.S. Bancorp Impact Finance. The new handle aims to reflect the widening scope of the organization, which spans affordable housing, economic development, historic rehabilitation, environmental finance, syndications, sustainable finance and more.

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The Office of the Comptroller of the Currency in April released a list of Community Reinvestment Act performance evaluations that became public in March. Of the 35 national banks, federal savings associations and insured federal branches of foreign banks that received ratings, 23 were satisfactory and 12 were outstanding.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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