Monday, April 2, 2012

New Market Tax Credits
Incentivise Adaptive Reuse   

     The NMTC Program, established by Congress in December of 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities. Successful applicants are selected only after a competitive application and rigorous review process that is administered by the CDFI Fund.

     Through calendar year 2010, the CDFI Fund made 594 awards totaling $29.5 billion in tax credit allocation authority. The CDFI Fund anticipates announcing the availability of another $3.5 billion of allocation authority to CDEs later this spring. The NMTC Program is currently set to expire in 2011, but the Administration has asked Congress to extend the Program with a $5 billion authorization for 2012.

     NMTCs So Popular They Have Lobbyists: The New Markets Tax Credit (NMTC) Coalition is a national membership organization founded in 1998 to advocate on behalf of the NMTC program. The Coalition, which now includes more than 150 members, is managed by Rapoza Associates, a public interest lobbying, policy analysis and government relations firm located in Washington, DC that specializes in providing comprehensive legislative and support services to community development organizations, associations and public agencies.

The Coalition serves its members in the following capacities:
  • Worked with the Clinton Administration to design the Credit and lobbied Congress for its enactment;
  • Collaborated with the Bush Administration to launch the program including the original rules, regulations and application;
  • Build bipartisan Congressional support for the Credit as an efficient market-based incentive for community revitalization;
  • Lobbied successfully for four extensions of NMTC totaling $17 billion in additional credit authority;
  • Conducted annual surveys of Community Development Entities and published 7 annual NMTC Progress Reports, state profiles of NMTC projects (50 Projects – 50 States), and reports on the overall effective ness of the credit (10th Anniversary Report);
  • Convened two annual Washington conferences where Coalition members have a chance to brief policymakers on the NMTC.
  • Responded to Treasury and IRS’s requests for comments and technical feedback on the Credit; and
  • Served as the eyes and ears of the NMTC industry in Washington, alerting members to the latest developments with regular emails via NMTC Bulletins.
     The Coalition also manages the Investor Advisory Committee (IAC), co-chaired by Gary Perlow and Mike Novogradac, as a venue for investors to discuss NMTC issues and encourage ongoing policy discussions between CDEs and investors.

      NMTCs Create Jobs in Philadelphia:  Building America CDE Inc. allocated $5 million in new markets tax credits (NMTCs) for Paseo Verde, a $48 million mixed-use development in a distressed area of Philadelphia, Pa. Jonathan Rose Companies and Asociación Puertorriqueños en Marcha are developing the transit-oriented community. The development, situated on 1.9 acres near Temple University's Regional Rail train station, will feature 120 units of affordable workforce housing and 30,000 square feet of commercial and retail space. Paseo Verde will also include a primary health-care facility and a social services office. The project, which is expected to achieve LEED Gold certification, is expected to generate 150 union construction jobs, create 42 new permanent jobs, and preserve another 39 jobs.


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