Tomorrow, November 1, House Republicans will introduce their long awaited tax reform legislation. Few details of what will be included in the tax package are known outside of a small circle of House and Senate tax writers, but speculation about what will and what won’t be included has been rampant, both in Washington and around the country. CDFA has spent months working with legislative partners to protect the interests of the development finance industry during tax reform, and based on our work, conversations, and research we expect the following development finance tools to be protected:

• Tax-Exempt Bonds

Multiple sources have indicated that tax-exempt bonds will be preserved by the tax reform legislation. However, the Unified Framework released in September does not include any mention of tax-exempt bonds, which leads CDFA to speculate that some bond categories may not make the cut. Regardless of what we learn tomorrow, CDFA will continue to work both independently and through the Municipal Bonds for America coalition to maintain the full preservation of tax-exempt municipal and private activity bonds.


• Low-income Housing Tax Credit (LIHTC)

LIHTC, along with the Research and Development Tax Credit, are the only tax credits explicitly protected under the aforementioned unified framework.

Outside of the Low-income Housing Tax Credit and Tax-Exempt Bonds, many established development finance tools authorized through the tax code are endanger of being eliminated. The programs under threat that CDFA has been tracking include:

• New Markets Tax Credits

The NMTC program, despite significant bipartisan support, was not explicitly protected by the Unified Framework. Nevertheless, the NMTC lobby maintains a strong presence on Capitol Hill, and per Michael Novogradac, the framework provides "some wiggle room" for tax writing committees to preserve certain tax credit programs. While the NMTC program is in jeopardy, we expect the program to ultimately be preserved.


• Historic Tax Credits (HTC)

According to a recent update from the National Trust for Historic Preservation (NTHP), it is unlikely that the HTC will be included in the final tax reform bill. The NTHP recommends that HTC stakeholders take immediate action and contact their legislators, asking them to preserve the HTC.
Additional recommendations from the NTHP include:

• Asking city councils in your respective cities to pass resolutions calling on Congress to keep the HTC, and get your local media involved.
• Invite district staff to tour your historic districts and deliver the national sign-on letter along with the state map of projects.
• Join a special November 2 webinar at 2:00pm Eastern with Washington lobbyists for reactions to the expected tax reform bill.

Call to Action

CDFA is asking all interested stakeholders to join the CDFA Legislative effort, and help protect essential development finance tools during tax reform. For more information, or to get engaged, contact Tim Fisher.

The Public Buildings Renewal Act, a bill supported by CDFA, would provide an economic boost of more than $8 billion in its first year, according to a recent study. The bill would allow private activity bonds to be used in P3 deals to finance public buildings. CDFA's Tim Fisher is quoted in the piece.

Congresswoman Elise Stefanik (R-NY) has introduced the Renewable Electricity Tax Credit Equalization Act, which would extend tax credits for electricity produced from closed-loop biomass, open-loop biomass, geothermal, municipal solid waste, hydropower facilities, and marine and hydrokinetic facilities.

CDFA has signed-on to letters authored by a coalition of PACE-industry leaders to defend PACE from detrimental legislative action. The PACE Act of 2017 (H.R. 1958 & S. 838) would limit homeowners' ability to finance energy-efficiency, clean energy, and disaster resiliency improvements to their homes.

According to expert panelists at a recent SIFMA meeting, Congress is unlikely to pass a major infrastructure spending bill after tax reform.

As Congress focuses on overhauling the tax code, John Hallacy evaluates the potential mixed implications of tax reform for the municipal market.

The EDA has made recent investments in both Missouri and West Virginia that will support, respectively, the development of a manufacturing incubator facility and the expansion of a publicly owned manufacturing facility.

The WIFIA program is getting ready to host another round of information sessions—both in-person and via webinar-- over the next few months. The next information session will be on November 8 in Denver, CO.

Clearinghouse CDFI will match the $1 million and leverage the funds fivefold to deploy $10 million throughout Indian Country over the next three years. This includes Native American reservations, trust lands, and other Native American communities in the Western United States.

The U.S. Small Business Administration approved a record $869 million in loans to New Jersey small business owners during the agency's fiscal year 2017 (the period from Oct. 1, 2016 thru Sept. 30, 2017). Nationally SBA approved over 68,000 loans for over $30 billion, during the past year.

The Community Investment Explorer aggregates customizable data from the Community Development Financial Institution (CDFI), New Markets Tax Credit (NMTC) and Low Income Housing Tax Credit (LIHTC) programs to show geographic comparisons and trends over time.