Taking Advantage of New Markets Tax Credits

Agenda

Why NMTCs Over Conventional Loans?

Which Projects Qualify? How Do Projects Qualify?

• Section 45D and the Consolidated Appropriations Act
• Types of Projects That Qualify
• Sin Businesses and Farming
• Residential Rental Property and MixedUse Developments
• Census Tracts
• Severely Distressed
• Secondary Criteria
• Targeted Populations
• Who Are the Other Players?
• How Does the Application Process Work?
• How Many Entities Receive Awards?

Where Does the Rest of the Capital Stack Come From and What Is an Example of How We Structure It?

• Various Loans
• Source Loan
• Leverage Loan
• QLICI Loans
• Structuring a New Markets Tax Credit Transaction
• For Profits
• Nonprofits
• QuasiGovernmental Entities
• Example Structure Chart
• What Is the Compliance Period and What Happens When It Is Over?

Playing Nice With Other Types of Tax Incentives

• USDA
• Historic Tax Credits
• State Tax Credits
• Bonds
• Energy Credits

How Can NMTCs Help in COVID-19 Affected Low-Income Communities?

• What Are Some Groups That Historically Have Not Benefited From NMTCs?
• Tribes

Credits

Faculty

Julia Fendler

Butler Snow LLP

• Practice is focused on public finance, tax credits, governmental finance, and opportunity zones
• Served as QALICB Counsel in closing numerous tax credit projects
• Counsel in a New Markets Tax Credit transaction for the construction and development of a new health care clinic for a federally qualified health care center located in Fort Worth, Texas; counsel in a New Markets Tax Credit transaction for the construction and development of cancer lodge facility in Jackson, Mississippi; counsel in a New Markets Tax Credit transaction for the construction and development of a health care facility and community center located in Portland, Oregon; counsel in a New Markets Tax Credit transaction for the expansion and equipping of a soybean processing facility located in Sidon, Mississippi, which utilized Federal and Mississippi NMTCs; special counsel for the construction of a Ronald McDonald House located in Fort Worth, Texas, which utilized Federal NMTCs; counsel in a New Markets Tax Credit transaction for the acquisition, construction, and equipping of a manufacturing plant facility located in Springdale, Arkansas
• Awarded the Tax Credits Attorney of the Year in Louisiana by Corporate International Magazine
• Bar admissions include Louisiana and Texas; associations include Texas Young Lawyers, Texas Bar Association, Louisiana Bar Association, American Bar Association, New Markets Tax Credits Working Group, and New Orleans Bar Association
• Author and speaker, “The New Markets Tax Credit: A powerful economic force for low-income people and communities,” Texas Bar CLE Advanced Real Estate Law, July 13, 2017
• J.D. degree, Louisiana State University; B.A. degree in history, University of Delaware, honors program, National Society of Collegiate Scholars, Omicron Delta Kappa, Golden Key International Honor Society and Phi Alpha Theta, National History Honors Society
• Can be contacted at 504-299-7759 or [email protected]

A. Ann Hered

Butler Snow LLP

• Experienced public finance attorney with a focus in New Markets Tax Credits and bonds
• Practice areas and industry teams include public finance, tax credits, and taxation of business and governmental finance
• Counsel to a financial institution for the renovation of historic buildings for use as hotel, commercial and residential rental properties through a combination of New Markets Tax Credits and the Gulf Opportunity Zone Bonds
• Represented a community development entity in the structuring and negotiating of a New Markets Tax Credit loan for the renovation of an historic downtown building in Denver; represented a community development entity with the financing of a medical facility using a combination of New Markets Tax Credit and Recovery Zone Facility Bonds; represented a community development entity with a project to install solar panels on top of schools and government buildings which were paid for by a combination of New Markets Tax Credits, federal tax credits for solar energy and state rebates for alternative energy generation
• Bar admissions include Colorado, New York, and California; associations include American Bar Association – Taxation Section
• Co-author, “Let’s Do The Math: Tax Credits Add Up To More Benefits for Charter Schools,” The Journal of Tax Credits, May 2011 (Volume II, Issue V); author, “Investors Show Learning Curve With Tax Incentives for Schools,” Colorado Real Estate Journal, March 16, 2011; author, “Financing School Construction: The Tax Consequences of Stripping,” Municipal Finance Journal, Summer 2009 (Volume 30, Number 2)
• J.D. degree, cum laude, Cornell University Law School; B.A. degree in economics and policy studies, Rice University
• Can be contacted at 720-330-2351 or [email protected]

Thane R. Hodson

Butler Snow LLP

• Assists clients with structuring new markets tax credits financings, including upper-tier lending arrangements, direct and indirect credit enhancement of lower-tier borrowing arrangements and unique lower-tier equity financing
• Practice areas and industry teams include public finance, tax credits, hospital and health care finance, taxation of businesses, and governmental finance
• Represents real estate investment trust in connection with structuring of operations, compliance with federal income tax requirements, and monetization of assets; represents real estate investment trusts in connection with a variety of secured debt financings including those involving vehicles such as REMICs
• Served as special tax counsel to REITs in connection with a variety of complex federal income tax matters including structuring investments to comply with the various federal income tax requirements applicable to REITs
• Assists clients with structuring new markets tax credits financings, including upper-tier lending arrangements, direct and indirect credit enhancement of lower-tier borrowing arrangements and unique lower-tier equity financing
• Structure financings which incorporate multiple forms of subsidy, particularly using new markets tax credits and energy or rehabilitation credits
• Prepare guidelines regarding the qualification of new markets tax credit financings for the benefit of targeted populations in addition to traditional low-income communities
• Minimize the current tax impact and facilitate the raising of additional capital when structuring complex transactions
• Bar admissions include Colorado, Kansas, and U.S. Tax Court; associations include the American Bar Association, Colorado Bar Association and Kansas Bar Association
• Co-Author, “Financing School Construction: The Tax Consequences of Stripping,” Municipal Finance Journal, Vol. 30, No. 02, Summer 2009, pp.71-80(10)
• J.D. degree, Washburn University; B.A. degree in political science, cum laude, University of Kansas, Phi Beta Kappa and Summer Field Scholar
• Can be contacted at 720-330-2350 or [email protected]