- $7B And Unclear Future for New Markets Tax Credits
- April 27, 2017 | Authors: James O. Lang; Justin J. Mayor
- Law Firm: Greenberg Traurig, LLP - Tampa Office
In November 2016, the Community Development Financial Institutions Fund of the United States Department of the Treasury (CDFI Fund) announced the award of $7 billion for use in the New Markets Tax Credit (NMTC) program. The $7 billion award constitutes the single largest announcement since the program’s inception.
The award will be used by 120 organizations with a primary mission of serving or providing capital to low-income communities or low-income persons to spur private investment in the communities they serve. These organizations, known as community development entities (CDEs), will apply their localized knowledge and expertise to attract private capital with their NMTC award that may be deployed for nearly any conceivable type of project, including real estate development, industrial operations, commercial retail or charitable activity.
When initially proposed, the NMTC program enjoyed bipartisan support in Congress, and came into existence with the passing of the Community Renewal Tax Relief Act of 2000. The program was conceived to address the sometimes unfairly perceived risk of investing in low-income communities, and to promote economic development within the communities themselves.