Novogradac Journal of Tax Credits Volume 10 Issue 7
Abridged version of the July 2019 issue of the Novogradac Journal of Tax Credits. For more content, please subscribe to the Journal.
Articles
The neighborhood of West Oakland, Calif., got a much-needed grocery store with a healthy foods focus, which was financed partly by a new markets tax credit (NMTC) investment.
Representatives of the Community Development Financial Institutions (CDFI) Fund addressed new markets tax credit (NMTC) hot topics June 6 at the Novogradac 2019 New Markets Tax Credit Spring Conference in Washington, D.C.
As the federal opportunity zones (OZ) incentive reaches the midway point of its second year, attracting investors is still an issue for qualified opportunity funds (QOFs).
Complementary state provisions are crucial for the federal opportunity zones (OZ) incentive.
State (and local) tax incentives play an often underappreciated role in the success of federal tax incentives.
News Briefs
Reps. Earl Blumenauer, D-Ore., Darin LaHood, R-Ill., Terri Sewell, D-Ala., and Mike Kelly, R-Pa., introduced the Historic Tax Credit Growth and Opportunity Act May 17 to bring more value to historic tax credit (HTC) transactions and to encourage redevelopment of smaller, income-producing properties. H.R. 2825 would eliminate the HTC basis adjustment requirement, increase the HTC from 20 percent to 30 percent for properties with rehabilitation expenses of less than $2.5 million, allow the transfer of HTCs as a tax certificate in developments with qualified rehabilitation expenses of less than $2.5 million, make it easier to meet the substantial rehabilitation test and create greater flexibility for nonprofits to partner with developers. Similar legislation led by Sen. Bill Cassidy, R-La., was expected to be introduced in the Senate soon.
The Community Development Financial Institutions (CDFI) Fund announced plans in mid-May to publish a notice of funding and an application for the fiscal year 2019 Capital Magnet Fund (CMF) round this summer. Up to $130.8 million is expected to be available in grants for CDFIs and qualified nonprofit housing organizations to support affordable housing activities and related economic development and community service facilities. Applicants must be either a certified CDFI or nonprofit operating with a principal purpose of developing or managing affordable housing. Visit the CDFI Fund’s CMF page or view the CMF outreach presentation for more information.
Sen. Ron Wyden, D-Ore., and 24 co-sponsors introduced May 2 legislation to create a clean energy production tax credit (PTC) and investment tax credit (ITC) that would consolidate the 44 current energy incentives. The Clean Energy for America Act of 2019 would create a PTC of up to 2.4 cents per kilowatt-hour for facilities that are at least 35 percent cleaner than average and a 30 percent ITC for facilities with zero carbon emissions. The bill would also provide a tax credit for fuels that are at least 25 percent cleaner than the average. The co-sponsors released a one-page summary and a section-by-section summary of the legislation. Similar legislation was released in the previous session of Congress. The bill is available at www.energytaxcredits.com.
The Transportation-Housing and Urban Development subcommittee of the House of Representatives Appropriations Committee approved May 23 its $75.8 billion fiscal year (FY) 2020 spending bill, which includes a $3.7 billion (a 6.9 percent increase) for Department of Housing and Urban Development (HUD) funding compared to FY 2019. The bill provides gross appropriations of $57.5 billion for HUD, which is $13.4 billion (30 percent) more than President Donald Trump’s budget request. The bill is H.R. 3163, and it was introduced into the House June 6.
The California state Senate May 28 unanimously passed legislation to create a state historic tax credit (HTC). S.B. 451 would create a state HTC from 2021 through 2025 worth 20 percent of qualified rehabilitation expenses (QRE), with a 5 percent bonus for properties that meet certain criteria, including low-income housing. The credit would have a $50 million annual statewide cap, with $10 million set aside for qualified historic residences and properties with QREs of less than $1 million. The legislation would require annual funding through the state budget. The bill will now be taken up by the state Assembly.