According to the New Markets Tax Credit Coalition,  last week, the House and Senate were working on a tax extender agreement that may also include certain small business tax and infrastructure provisions.

Both Chambers have passed H.R. 4213, the Tax Extenders Act of 2009, which both include $5 billion in Credit authority for New Markets in 2010, and other individual and business tax provisions. In addition, the House recently passed the Small Business and Infrastructure Jobs Tax Act of 2010 (H.R. 4849) which included Alternative Minimum Tax (AMT) relief for NMTC investors on Qualified Equity Investments (QEIs) made from March 15, 2010 through January 1, 2012. This bill also included an extension of Recovery Act terms for Build America Bonds through 2013 (estimated to cost $7.5 Billion) and exemptions from AMT for interest earned on tax-exempt and other private activity bonds.

According to the NMTC Coalition, last week the House began working on an extender package for HR 4213, which contains NMTC extension and potential provisions included in the HR 4849, including Build America Bond provisions and AMT relief for New Markets. “One of the reasons for this piecemeal approach is that some of these provisions (although not NMTC) are controversial and unlikely to win approval in the Senate Finance Committee.”

We look forward to the outcomes of these votes in hopes that NMTC extensions are granted to sustain and strengthen this vital program that has provided important development resources to numerous Ohio businesses and neighborhoods. For more information, visit www.NewMarketsTaxCreditCoalition.org.

Tuesday was spent on Capitol Hill visiting with thirteen members of the Ohio Congressional delegation about extension of the New Markets Tax Credit program. NMTC is included in the tax extender package that, on Tuesday, had not yet moved to the floor of the House of Representatives. Our encouragement to members was to increase the amount of tax credit allocation from $3.5 billion to $5 billion as it has been funded in the 2008 and 2009 rounds and to exempt NMTC from the Alternative Minimum Tax as all other community tax credits are thus incenting more investor participation.

Wednesday began with an early breakfast with Congressman Pat Tiberi (R-OH) who is one of the principle sponsors of the NMTC five year extension bill (HR 2628), a NMTC Coalition board meeting, and the beginning of the NMTC Coalition annual conference. The conference opened with a luncheon at which Michael Barr, Assistant Secretary for Financial Institutions at the Treasury Department, spoke about his involvement in NMTC. He was one of the original individuals that developed the NMTC concept in the Clinton administration and has now come back into public service in the Obama administration to find NMTC a developed program with a robust and successful process of moving capital into distressed communities.

(NMTC Coalition, 2009) The Credit contributes to the economy of underserved and distressed communities and is an engine for job creation. Thus far, some $15 billion in NMTC financing has found its way to eligible low income communities. Our research indicates that this financing is usually paired with other sources of capital on a dollar for dollar basis — meaning some $30 billion in capital has been invested in low income communities for financing businesses, community facilities and mixed use projects. Using the Recovery Act standard of 1 job for every $92,000 in financing, that $30 billion converts to 326,086 jobs having been created in low income communities. (EDITOR’S NOTE: Factoring in the 39% tax credit this means the cost of these jobs to the federal government was $6 billion, which if directly appropriated would have been $30 billion)

It was my pleasure to introduce Congressman Tiberi to the attendees as a principal speaker at the Thursday session. The Congressman spoke of his work with Finance Fund in moving NMTC funding into his district and all of Ohio and of the need to extend the program as evidenced by his sponsorship of the five year extender bill. He emphasized the bi-partisan nature of the program and suggested that it may be time to talk about making it permanent. It was also a pleasure to have a board member accompany us on this visit. Reggie Johnson, Huntington National Bank, was asked to present on the Thursday investor panel. This was a great opportunity for exposure and to get board members engaged in the “larger world” of the NMTC industry.

Thanks to the amazing work of Finance Fund staff and board (Jennifer Deuber, Communication Manager; Moniqua Spencer, Chief Program Officer; Reggie Johnson, Board Director)  it was a good week with more relationship building than time and space permit me to report. But the frosting on the cake was that, on Wednesday, the House of Representative took up and passed the tax extender package with an increase of $1.5 billion to the $5 billion level we were asking for. The bill now moves to the Senate which may not deal with it until after the holidays.