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Novogradac Journal of Tax Credits Volume 2 Issue 4

The April 2011 issue of the Novogradac Journal of Tax Credits.

Journal cover April 2011

Articles

Michael J. Novogradac

Friday, April 1, 2011

The nation’s governors gathered at the National Governors Association (NGA) 2011 Winter Meeting in late February in Washington, D.C. The governors also met with President Obama, members of the Administration and Congress, business leaders and industry experts on a range of issues that included state fiscal conditions and job creation. 

Jennifer Dockery

Friday, April 1, 2011

The Community Development Financial Institutions (CDFI) Fund has awarded $3.5 billion in new markets tax credit (NMTC) authority to 99 community development entities (CDEs). The CDFI Fund had initially anticipated receiving $5 billion and had preliminarily allocated credits accordingly. When Congress extended the NMTC at $3.5 billion in late 2010, the CDFI Fund chose to address the $1.5 billion difference by awarding the same number of allocates in the eighth allocation round as originally planned, but at lower average amounts than in previous years.

Jennifer Dockery

Friday, April 1, 2011

The extension of the Section 1603 cash grant in lieu of renewable energy tax credits has bolstered the renewable energy industry and has investors interested in new projects, according to industry insiders. First-time investors are entering the renewable energy tax credit (RETC) market and experienced investors have returned. The majority of investors are opting for the grant, but a few production tax credit (PTC) and investment tax credit (ITC) deals are feeding the lessened but enduring appetite for tax credits. Attorneys, investors, developers and others predict increased interest from investors in the short term, but are uncertain about the future of the renewable energy market after the Section 1603 grant program expires.

Jennifer Hill

Friday, April 1, 2011

After the University of Minnesota, Morris (UMM) in 2005 became the first American public university to erect a large-scale onsite wind turbine, it was ready for more. That year, UMM applied for clean renewable energy bonds (CREBs) to build five additional turbines on the Morris campus, but the amount of bonds the school requested exceeded the funds available at the time. UMM reapplied for CREBs in 2007 with a more modest request of $3.6 million for two turbines and received the allocation.

Neil D. Kimmelfield

Friday, April 1, 2011

The tax credit investor (investor) in a leveraged new markets tax credit (NMTC) financing commonly enters into a put option agreement entitling it to sell its interest in the qualified community development entity (CDE) to an affiliate of a qualified active low-income community business (QALICB) for a nominal amount after the end of the seven-year compliance period (the exit transaction). Once a portion of the qualified low-income community investment (QLICI) loan is used to repay the leverage loan, the affiliate and QALICB have effectively eliminated the burden of paying the remaining portion of the QLICI loan. Although the elimination of this burden creates an economic benefit for the family of entities that includes the QALICB and affiliate (entity family), the full amount of that benefit may not be reflected in their taxable income at the time of the exit transaction. 


News Briefs

Friday, April 1, 2011

The Internal Revenue Service (IRS) released its 2011 calendar year resident population estimates, which are used to determine states' low-income housing tax credit (LIHTC) ceilings and tax-exempt private activity bond caps in 2011.

Friday, April 1, 2011

The U.S. Department of Housing and Urban Development (HUD) requested comments about its calculation method for the trend factor used in its fair market rent (FMR) estimates.

Friday, April 1, 2011

Sen. Jack Reed, D-R.I., introduced legislation that would contribute $1 billion to the National Housing Trust Fund for the creation, preservation and rehabilitation of affordable housing.

Friday, April 1, 2011

The Ohio Department of Development (ODOD) announced the approval of nearly $19.2 million in Job Creation and Retention Tax Credits for 16 projects that when expanded or located in Ohio are expected to create 1,769 jobs and retain 552 positions.

Friday, April 1, 2011

The Phoenix Community Development and Investment Corporation (PCDIC) approved a $34.3 million new markets tax credit (NMTC) loan for RED Development's construction of the Kimpton Palomar Hotel in downtown Phoenix, Ariz.

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