New Markets Tax Credits News Briefs - January 2017

Tuesday, January 10, 2017

Sen. Shelley Capito, R-W.Va., introduced Nov. 15, 2016, the Creating Opportunities for Rural Economic Expansion Act, or the CORE Act (S. 3). The bill is designed to create a new markets tax credit (NMTC) set-aside of $525 million for investments in distressed coal mining communities in 12 states with significant coal job losses between 2012 and 2015. Beginning in 2017, this set-aside would be distributed over a three-year period. S. 3 allows investors to receive the NMTC if their project is mixed-use development, health care facility, manufacturing or a direct business investment. To qualify as a distressed coal community under the CORE Act, the low-income community must be located in one of the top 30 counties designated by the Mine Safety & Health Administration as having significant coal job loss from 2012 to 2015 and have one or more census tracts that qualify as a low-income community under the existing NMTC eligibility rules. In addition, a neighboring county can qualify if it’s next to a county that meets all of the original criteria and also contains a qualifying low-income community under NMTC eligibility rules. At press time, S. 3 had been read twice and referred to the Committee on Finance.

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On Oct. 27, 2016, the Community Development Financial Institutions (CDFI) Fund released the report, “Strategic Plan: Impact and Excellence.” The strategic plan will serve as the foundation for the CDFI Fund’s decisions and actions during the next five years. The CDFI Fund sought to answer the question, “How can the CDFI Fund and the network of awardees generate the greatest impact possible in underserved and distressed communities?” The five-year plan reflects ideas submitted by more than 700 members of the general public during the CDFI Fund’s national listening tour, as well as insights gained in discussions within the Treasury Department and with the CDFI Fund Community Development Advisory Board.

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The CDFI Fund released the qualified equity investment (QEI) issuance thresholds Dec. 2, 2016, that will be in place for the 2017 allocation round, which is expected to open in the first quarter of 2017. The minimum thresholds are all as of 11:59 p.m. ET, July 20, 2017. The threshold is 100 percent for the calendar year 2011 allocations, 80 percent for 2012, 70 percent for 2013, 50 percent for 2014 and 30 percent for 2015-16. Rural CDEs have a threshold of 30 percent for 2014 and are not required to issue a minimum amount for 2015-16. The CDFI Fund stated that allocatees that received multiple allocations between 2011 and 2016 and don’t meet a minimum threshold for a specific round can qualify by reaching at least 90 percent of their cumulative allocation amounts. 

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On Nov. 29, 2016, the CDFI Fund and the U.S. Department of the Treasury released a form soliciting comments regarding the revised Certification of Material Events Form. The revised form requires recipients to indicate their material event, explain the event and their organizational response. The form gathers information related to specified material events that recipients are required to report per their assistance agreements for the Community Development Financial Institution (CDFI), NMTC, Bank Enterprise Award, Capital Magnet Fund and CDFI Bond Guarantee programs. The CDFI Fund invites comments on whether the collection of information is necessary for the proper performance of the functions of the CDFI Fund, the accuracy of the CDFI Fund’s estimate of the burden of the collection of information, ways to enhance the quality, utility and clarity of the information to be collected, ways to minimize the burden of the collection of information on respondents and estimates of capital or startup costs and costs of operation, maintenance and purchase of services to provide information. Comments must be submitted in writing on or before Jan. 27. The comment request form is available at www.newmarketscredits.com.

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