New Markets Tax Credit News Briefs - November 2021
Friday, November 5, 2021
The Community Development Financial Institutions (CDFI) Fund reported in September that it tentatively plans to open the calendar year 2021 (CY 2021) new markets tax credit (NMTC) allocation application round this fall and added that the round will include a 14-day period for community development entities (CDEs) to submit their certification if they are not currently certified. CDE certification applications are reviewed on a rolling basis, so applicants are advised to apply as early as possible. The CDFI Fund also said that an updated NMTC allocation application will be released along with the CY 2021 notice of allocation authority.
The CDFI Fund published a notice of funds availability for the fiscal year 2021 funding round of the Capital Magnet Fund (CMF) in the Sept. 10 Federal Register. The CDFI Fund will award up to $380.2 million in grants to CDFIs and nonprofit organizations to finance affordable housing and related economic development and community services. The award size is significantly larger than in previous rounds and the CDFI Fund will consider requests that significantly exceed the maximum awards in previous rounds. The CDFI Fund will not accept applications nor will it issue awards for less than $500,000. Applicants were required to create an Awards Management Information System (AMIS) account, enter and update the EIN and DUNS numbers in AMIS and submit a SF-424 mandatory form by Oct. 12. The application deadline is at 5 p.m. ET Nov. 9 and the last day to contact CDFI Fund staff is 5 p.m. ET Nov. 4.
Rep. Mike Thompson, D-California, introduced Sept. 9 the Local Food Production Enhancement Act of 2021, a bill aimed at boosting investment in agricultural production through NMTCs. H.R. 5176 would make qualified farming businesses eligible for the NMTC and adjust the applicable percentage of new qualified equity investments to 6% for the first four allowance dates and 7% for the remainder. Investments predating the act would be eligible for the standard NMTC rate of 5% for the first three credit allowance dates and 6% thereafter. The bill clarifies farming operations that are eligible for NMTCs, including proximity to grocers and workers.
The Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking Sept. 8 to rescind the Community Reinvestment Act (CRA) rule that the OCC issued in 2020 and replace it with the former rules. The action would return the OCC CRA regulations to those adopted in 1995 and amended. The proposed rule would apply to all national banks and all federal and state savings associations. Comments on the proposed rule were accepted through Oct. 29.
The CDFI Fund published in the Sept. 15 Federal Register a notice proposing minor revisions to CDFI Bond Guarantee program forms such as deleting and adding lines to applications and reports and updating calendar years. A proposed clarifying paragraph would be added to the guarantee application regarding applications that are deferred until a subsequent application round. In the notice, the CDFI Bond Guarantee program also seeks approval for a tertiary loan monitoring report that would provide the CDFI Fund with information to monitor this type of collateral for the program that otherwise is not collected. Comments on the notice are due Nov. 14.
The OCC released a list of CRA performance evaluations that became public in September. Of the 14 evaluations of national banks, federal savings associations and insured federal branches of foreign banks, 10 were satisfactory, four were outstanding.
New Markets Tax Credit