NMTC Extension Act
New Markets Tax Credits in the News
May 9, 2023
The New Markets Tax Credit (NMTC) Program is a federal financial program developed by the United States Department of the Treasury to incentivize community development using federal tax credits allocated by private investors in disadvantaged and distressed communities. In this biweekly blog, LifeCity will discuss key developments related to the NMTC Program.
News
NMTC Extension Bill Introduced in House
The NMTC Extension Act of 2023 was introduced to the US House of Representatives on April 6, 2023. This bill would permanently extend the NMTC program at $5 billion annually, adjust for inflation in future years, and give an exception from the Alternative Minimum Tax. The extension of the NMTC program will create investments in low-income areas and rural areas, which are commonly underserved. Since its start, the NMTC has had a broad range of benefits, and the permanent extension of the program allows for the revitalization of underserved American cities.
NMTC investments in Indian Country
The Federal Reserve of Minneapolis recently published an article detailing barriers to Native American involvement in the NTMC program, such as issues in attracting capital to Indian Country. The NMTC program is beneficial to Indian Country because it offers tribal nations support for economic development. Despite its benefits, Native American involvement in the NMTC remains low for a variety of reasons, such as the complicated application process, complex rules, and high costs of compliance. With these barriers, though, come some potential solutions, such as changing the program into a federal grant program and setting aside an allocation for tribal entities. The NMTC Native Initiative is an important part of the NMTC program; however, addressing these barriers will encourage greater participation by Native communities.
Projects
Alabama School of Mathematics and Science
UB Community Development is providing $12.5 million New Markets Tax Credits for the Alabama School of Mathematics and Science (ASMS) in Mobile, Alabama. This investment, which will fund a 32,000 square foot research center, will better support ASMS efforts to improve STEM programs at the high school level across the state. The new Wilson Science Research Center will include high quality STEM laboratories, a Humanities hub, and additional community and living spaces. To learn more about ASMS, please visit its website at https://www.asms.net/. To learn more about UB Community Development’s NMTC work, please visit the website here.
RIOT Wireless
RIOT Wireless received $2.25 million in financing for development of wireless IOT (Internet of Things) edge devices. This funding, which includes New Markets Tax Credits and other funding secured by Community Development Venture Capital Alliance (CDVCA), allows RIOT Wireless to scale production and delivery of tank level monitors and meet the demands of oil, gas, and chemical product manufacturers. To learn more about RIOT Wireless, visit the website here.
These inspiring projects and more are underway across the US. LifeCity specializes in impact assessments and third-party validation services for CDEs engaged in NMTC-financed projects. As a third-party, we help CDEs and other companies measure, manage, track, and report their impact to ensure a credible and transparent message. Our services are available across all stages of the NMTC allocation process and provide personalized impact reports and videos that support clients, projects, and communities