I wanted to provide an update to my earlier op-ed, "Bond Issuers Should Apply for New Markets Tax Credits," Feb. 9. The proposed legislation referenced was in fact part of the American Recovery and Reinvestment Tax Act of 2009, which was signed by President Obama Feb. 17.
Specifically, the total new markets tax credit allocation authorization was raised from $3.5 billion to $5 billion for applicants - many of whom are municipalities and issuers - applying for 2009 NMTC allocations. Such applications are due no later than 5 p.m. Eastern Time on April 8.
A retroactive additional $1.5 billion in NMTC allocation will be allocated among those prior 2008 applicants that submitted applications for 2008, and either did not receive an allocation for 2008, or received an allocation for 2008 in an amount less than the amount requested in the allocation application.
This legislative change provides opportunities to municipalities and issuers that have projects in low-income communities that otherwise cannot get sufficient financing, and those that want to apply for a 2009 NMTC because there will be a higher success rate, given the substantial increase in the amount of allocation available to applicants.
Alan L. Kennard, partner
Wildman, Harrold, Allen & Dixon