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CDFA Tax Credits Finance Update - February 27, 2024

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Tax Credits Finance Update
February 27, 2024
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Tax Credits Finance Update


Coming Up Next Month: CDFA's Intro and Advanced Bond Finance WebCourses
Join CDFA for our upcoming Bond Finance Week! The Intro Bond Finance WebCourse will take place on March 4-5 followed by the Advanced Bond Finance WebCourse on March 6-7. Register for one or both of these courses to learn from experts about how to bring economic growth to your community by utilizing the vast resources of the bond finance industry.

'Green' Fuel Facility Planned in St. Louis, MO with $7M in NMTC
The city of St. Louis has authorized up to $7 million in tax credits for a startup - Terra Environmental Holdings - to locate an industrial facility in south St. Louis. This capital will help finance the purchase, renovation, and equipment for a 27,900-square-foot industrial facility at 3600 S. First St., in the Marine Villa neighborhood.

U.S. Issues $135M in Advance EV Tax Rebates Since Jan 1, Treasury Says
The U.S. government has reimbursed auto dealers for about $135 million in advance point-of-sale consumer electric vehicle tax credit payments since the start of the year through February 6, according to Treasury. Prior to 2024, U.S. auto buyers could only take advantage of the $7,500 new electric vehicle credit or $4,000 used EV credit when they filed tax returns the following year. As of January 1, 2024, consumers can transfer the credits to a car dealer at the time of sale, effectively lowering the vehicle's purchase price.

Monetizing IRA Clean Energy Credits for Tax-Exempt Organizations
The Inflation Reduction Act of 2022 (IRA) provides a number of renewable energy credits that are newly available to nonprofits under a direct pay election. Tax-exempt entities, states and political subdivisions, the Tennessee Valley Authority, Indian tribal governments, Alaska Native Corporations, and rural electricity cooperatives are eligible to make the direct payment election and treat the IRA tax credits as "refundable" tax credits.

Utah Bill Would Allow Unallocated State LIHTCs to Carry Forward
Legislation introduced in the Utah House of Representatives would allow unallocated portions of the state Low-Income Housing Tax Credit (LIHTC) to be carried forward to future years. H.B. 465 modifies several affordable housing provisions, including to allocate credits returned to or recaptured by the Utah Housing Corporation in the previous year. The bill would also allow the allocation of holdover credits if all potential credits were not allocated in a previous year, with a maximum of 15% of the total previous allocation amount.

Georgia Legislation Would Extend State HTC, Increase Cap
Legislation introduced in the Georgia House of Representatives would increase the cap and extend the deadline for the state Historic Tax Credit (HTC), while expanding eligibility for the state's residential HTC. H.B. 1134 would extend the sunset date of the HTC by one year to the end of 2028 and double the annual nonresidential HTC cap to $60 million. The bill would also increase the annual nonresidential project cap from $5 million to $7.5 million, going to $15 million if the project creates 200 or more permanent jobs or $5 million in annual payroll within two years of the placed-in-service date.

New York Awards More Than $15M in Regional Economic Development Awards Statewide
Governor Kathy Hochul recently announced that over $15 million has been awarded to support 19 projects across New York State through the Regional Economic Development Council initiative. Round XIII included core capital grant and tax credit funding from Empire State Development, which was made available on a continuous and competitive basis to support the immediate needs of communities. Funding will support impactful projects that align with each region's strategic goals.

Tax Bill Expected to Spur Affordable Housing Development Nationwide
The $78 billion Tax Relief for American Families and Workers Act of 2024 that includes key measures to boost the Low-Income Housing Tax Credit (LIHTC) program now moves to the U.S. Senate for approval. If approved, the legislative package promises to spur housing development. It includes restoration of a 12.5% increase in annual 9% LIHTC allocation for 2024 and 2025 and a reduction, from 50% to 30%, of the amount of private bond financing required to access the 4% housing credit.

U.S. House of Representatives Passes $79B Bipartisan Tax Bill
The House passed a sweeping, bipartisan tax bill that would expand the child tax credit for American families and reinstate some tax cuts for businesses. The package would also increase the amount of federal money that states can receive to encourage the development of low-income housing, authorizing a 12.5% increase for the federal Low-Income Housing Tax Credit (LIHTC), which was originally meant to subsidize up to 70% of construction.

Applications Now Open for the 2024 Caren S. Franzini Fellowship
The Caren S. Franzini Fellowship was created to develop and recognize outstanding women in the field of development finance for their leadership and dedication to the advancement of the industry. This 6-month fellowship program, run through the CDFA Foundation, is open to women employed by a CDFA member organization who have worked in the development finance industry for less than 10 years. Apply by Friday, March 15!

Upcoming Events
Intro Bond Finance WebCourse

SSBCI Learning Series - Promoting Success: Best Practices for Highlighting SSBCI Programs
March 12, 2024 - 2:00 PM - 4:00 PM Eastern
SSBCI is routinely heralded as the "most important small business program you've never heard of." In this session, speakers will discuss the importance of highlighting success and provide best practices for demonstrating the economic benefits of SSBCI programs.

CDFA // BNY Mellon Development Finance Webcast Series: The Re-emergence of Bond Banks
March 19, 2024 - 2:00 PM - 3:00 PM Eastern
During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, panelists will discuss the importance of bond banks, explore their roles, and focus on how they help communities move forward.

More Headlines

Tax Court Rejects IRS Clawback of Low-Income Housing Credit
Thomson Reuters | Feb. 21 | Tax Credits

Clean Ethanol Program Receives $25M Investment from USDA
CStoreDecisions | Feb. 20 | Energy Finance | Rural Development | Tax Credits | U.S. Dept. of Agriculture (USDA)

Illinois Farm Bureau Tracks Potential of Future Alternative Fuel Tax Credits
Advantage News | Feb. 20 | Agriculture Finance | Energy Finance | Tax Credits

KCAP President Ken Springer Informs Tax Credits Through Inflation Reduction Act
97.7 WMOI | Feb. 14 | Energy Finance | Infrastructure Finance | Tax Credits

Ohio Tax Credit Program is Helping New Farmers Grow
NPR | Feb. 13 | Access to Capital | Agriculture Finance | Tax Credits

Climate Initiatives in Biden's Inflation Reduction Act Will Cost Over $400B
Daily Wire | Feb. 12 | Energy Finance | Infrastructure Finance | Tax Credits

Understanding the Full Potential of the IRA's Historic Investment in the IRS
The White House | Feb. 12 | Energy Finance | Infrastructure Finance | Tax Credits

Minnesota Reboots Community Solar Program With New Focus on Lower-Income Residents
Minn Post | Feb. 9 | Energy Finance | Tax Credits

WinnCompanies Secures $69.1M for Mixed-Income Community in Swampscott, MA
Nerej | Feb. 9 | Housing Finance | Tax Credits | Low Income Housing Tax Credits (LIHTCs)

Bill Proposes First-Ever Federal Workforce Housing Tax Credit for Middle-Class Housing
JD Supra | Feb. 7 | Housing Finance | Tax Credits

Lawmakers Introduce Bill to Fix the Inflation Reduction Act's ‘Small-Molecule Penalty'
ACS Institute | Feb. 6 | Energy Finance | Infrastructure Finance | Tax Credits

Brewery in Rockford, IL Has Sights Set on Tax Credits and TIF
Rockford Register Star | Feb. 6 | Economic Development | Food Systems Finance | Redevelopment | Tax Credits | Tax Increment Finance (TIF)

Demand Remains in NMTC Incentive's Fourth Year With $5B in Allocation Authority
Novogradac | Feb. 5 | Tax Credits | Federal New Markets Tax Credits (NMTCs)

New Colorado Tax Incentives to Lower Cost of High-Efficiency Heating and Cooling
Longmont Leader | Feb. 5 | Energy Finance | State Finance Program | Tax Credits

Texas Co-op Launches Affordable Battery Storage Subscription Service
NRECA | Feb. 5 | Energy Finance | Tax Credits

Sustainable Fintech Startup Crux Raises $18M for Clean Energy Tax Credit Platform
ESG Today | Feb. 1 | Energy Finance | Tax Credits

IRA Creates 100K Clean Energy Jobs and Attracts $110B in Private Investments
pv magazine | Jan. 24 | Energy Finance | Green Finance | Incentives | Public-Private Partnership (P3) Financing | Tax Credits

Washington NRCS Clears Backlog Using Inflation Reduction Act Funds
Capital Press | Jan. 24 | Energy Finance | Incentives | Tax Credits | U.S. Dept. of Agriculture (USDA)

Yavapai-Apache Nation in Arizona Building 40 Homes, Community Center for Youth
Travois | Jan. 24 | Housing Finance | Tax Credits | Tribal Finance

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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