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CDFA Tax Credits Finance Update - August 22, 2023

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Tax Credits Finance Update
August 22, 2023
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Tax Credits Finance Update


White House Releases Fact Sheet to Mark Inflation Reduction Act's One-Year Anniversary
The White House released a fact sheet to mark the one-year anniversary of the Inflation Reduction Act (IRA). Since its passage, the IRA has created more than 170,000 clean energy jobs, and companies have announced over $110 billion in clean energy manufacturing investments. The Biden administration also released a new feature that highlights stories of how the IRA is making a different for Americans in all 50 states and U.S. territories.

U.S. Climate Law Introduces Billion-Dollar ​‘Game-Changer' for Nonprofits
For two decades, federal clean energy tax credits have been available only to for-profit companies seeking to offset their tax burdens. But within the Inflation Reduction Act is a provision - known as direct pay - that has unleashed hundreds of billions of dollars of clean-energy tax credits to city and county governments, schools and universities, nonprofits, tribal communities, and other entities that do not pay federal taxes.

Don't Miss CDFA's Intro Tax Credit Finance Course on September 27-28
CDFA's Intro Tax Credit Finance Course examines the application of tax credit programs and their use in greater economic development finance efforts. This course will discuss the practical application of tax credit programs including new markets, low-income housing, historic preservation, and state-specific programs. Register today!

Final Rules, Guidance Released on Investing in America Program to Spur Clean Energy Investments in Underserved Communities
The U.S. Department of the Treasury and Internal Revenue Service (IRS) recently issued final rules and procedural guidance for the Low-Income Communities Bonus Credit program under Section 48(e) of the Internal Revenue Code and announced the application process would open by early fall. DOE has launched a landing page for the program and will provide, in conjunction with Treasury and the IRS, additional information about the application opening date and application materials in the coming weeks. 

Farmers Able to Cut Energy Costs with USDA, IRA Solar Incentives
Federal grant and tax credit dollars have significantly reduced the costs for farmers to install solar projects and power their businesses. The U.S. Department of Agriculture's (USDA) Rural Energy for America Program can cut installation costs up to 50 percent and the Inflation Reduction Act's Investment Tax Credit gives businesses up to a 30 percent credit for eligible projects.

How Rising Interest Rates Impact Reinvestment for CDEs Repaid by QALICBs
As interest rates continue to rise, both new markets tax credit (NMTC) and non-NMTC financing have become more expensive. This can often lead to cash flow constraints for qualified activity low-income community businesses (QALICBs). QALICB borrowers may be forced into the difficult decision to either sell the business or file for bankruptcy protection as the only solution to these cash flow limitations. To avoid potential recapture of NMTCs, CDEs must understand the reinvestment requirements for funds received from the QALICBs as stated in Treasury regulations, as well as standard language in loan and fee agreements that may impact the calculations.

Nearly $90M in Tax Credits Awarded in Texas for Affordable Rental Housing
The Texas Department of Housing and Community Affairs awarded $87.7 million in housing tax credits to help fund the development of properties that offer reduced rent to Texans. With this funding, developers will construct or rehabilitate more than 3,100 housing units and offer affordable rent to households earning up to 80% of the median family income in their respective areas

Rural Jobs Act Introduced in House Would Provide $1B in Additional NMTC Allocation
Rep. Carol Miller, R-West Virginia, recently introduced the Rural Jobs Act in the House of Representatives. The bill would provide $1 billion of new markets tax credit (NMTC) allocation over the next two years for rural areas. The House version of the legislation's text was not immediately available, but it is expected to be identical to a version introduced in the Senate in May. That legislation would provide $500 million per year in NMTC allocation for 2023 and 2024 for Rural Jobs Zones, which are NMTC-eligible census tracts in rural communities with fewer than 50,000 residents.

Upcoming Events
Intro Tax Credit Finance Course

SSBCI Learning Series - Enhanced Efforts to Engage and Support SEDI-Owned Business
August 24, 2023 - 2:00 PM - 4:00 PM Eastern
In this installment of the SSBCI Learning Series, speakers will discuss different considerations for designing small business financial products tailored to meet the needs of SEDI-owned businesses and outreach strategies to ensure those products are accessible, the linkage between SEDI-owned businesses and emerging fund managers, and how to deploy capital to SEDI-owned businesses and secure the information needed for reporting and compliance.

CDFA Food Systems Finance Webinar Series: Investment Tools & Food Systems
August 29, 2023 - 2:00 PM - 3:30 PM Eastern
In this installment of the CDFA Food Systems Finance Webinar Series, we explore how programs at the state and federal levels can offer unique financing solutions and catalyze investment in local and regional food systems.

More Headlines

Learn About Financing Tools to Catalyze Investment in Local Food Systems!
CDFA | Aug. 15 | Access to Capital | EB-5 Visa | Food Systems Finance | Tax Credits | Federal New Markets Tax Credits (NMTCs)

Greenbacker Partners with RBC Community Investments to Complete Solar PTC Deal
ABL Advisor | Aug. 14 | Community Development | Energy Finance | Tax Credits

Tacoma, WA Considering Tax Credit Increase for Clean Energy, Green Companies
The Center Square | Aug. 14 | Energy Finance | Green Finance | Public-Private Partnership (P3) Financing | Tax Credits

Monarch Private Capital Finances Affordable Family Housing in South Carolina
Yahoo!Finance | Aug. 10 | Economic Development | Federal | Housing Finance | Rural Development | State Finance Program | Tax Credits

Michigan Gov. Announces $1.4M Toward Affordable Housing in Grand Rapids
FOX17 | Aug. 10 | Housing Finance | Tax Credits

$64M in Financing for Construction of Affordable Housing Developments in Raleigh, NC
Benzinga | Aug. 9 | Bond Finance | Housing Finance | Rural Development | Tax Credits

Massachusetts Brownfields Tax Credits Program Extended
JD Supra | Aug. 9 | Brownfield Financing | Redevelopment | State Finance Program | Tax Credits

Renewable Properties Closes $53.5M Portfolio of Community Solar Projects
Solar Builder | Aug. 7 | Energy Finance | Tax Credits

Appalachia Receives Major Benefits From Federal IRA to Power Solar Projects
Appalachian Voices | Aug. 7 | Community Development | Energy Finance | Rural Development | Tax Credits

The Solar Investment Tax Credit: An Impactful History and Enduring Value
EIN News | Aug. 7 | Energy Finance | Green Finance | Resiliency | Tax Credits

HUD Publishes Updated Guidance for PHAs
Novogradac | Aug. 4 | Energy Finance | Housing Finance | Tax Credits

University of Arizona to Improve Access to Clean Energy Tech
Government Technology | Aug. 2 | Community Development | Energy Finance | Tax Credits

Ohio Enacts New State Low-Income Housing Tax Credit Program
JD Supra | Aug. 2 | Housing Finance | Tax Credits | Low Income Housing Tax Credits (LIHTCs)

Affordable Housing Development Financed with TIF Breaks Ground in Chicago, IL
Block Club Chicago | Aug. 1 | Bond Finance | Housing Finance | Redevelopment | Tax Credits | Tax Increment Finance (TIF)

After $17M Revamp, Two Omaha, NE Historic Sites Are Set to Open as Affordable Housing
Nebraska Examiner | Jul. 31 | Historic Preservation | Housing Finance | Redevelopment | Tax Credits | Tax Increment Finance (TIF)

New York Gov. Celebrates Completion of $15M Affordable Housing Development in Buffalo
State of New York | Jul. 28 | Housing Finance | Tax Credits | Low Income Housing Tax Credits (LIHTCs) | Federal Historic Rehab Tax Credits | State Historic Tax Credits

Reunion Launches Marketplace with Over $1B in Clean Energy Tax Credits
Cision | Jul. 26 | Energy Finance | Tax Credits

KeyBank Provides $20.4M of Financing for Affordable Housing in Salem, OR
CSR Wire | Jul. 25 | Housing Finance | Tax Credits | Low Income Housing Tax Credits (LIHTCs)

At One Year Old, Inflation Reduction Act is Already Turbocharging Clean Energy Technology
Associated Press | Jul. 23 | Energy Finance | Federal | Green Finance | Resiliency | Tax Credits

The Council of Development Finance Agencies (CDFA) is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation's leading and most knowledgeable members of the development finance community representing public, private and non-profit entities alike. For more information, visit www.CDFA.net or email info@cdfa.net

Council of Development Finance Agencies
100 E. Broad Street, Suite 1200
Columbus, OH 43215
(614) 705-1300


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