(Editor’s note: Michael Novogradac is the guest author of this post. Michael Novogradac is the managing partner in the San Francisco, CA, office of Novogradac & Company LLP. He has more than 25 years of experience specializing in affordable housing, community development and renewable energy. He is the author of numerous real estate-related tax and accounting articles and books, including the New Markets Tax Credit Handbook and the Low Income Housing Tax Credit Handbook. Michael is very active in advocating for the inclusion of affordable housing, historic, new markets and renewable energy tax credits in federal and state policy.)
The expiration of the New Markets Tax Credit (NMTC) on Dec. 31, 2013, marked the loss of an important economic development tool for low income communities across the country. The program’s success in low income communities, including those in Indian Country, will be essential as community development stakeholders work towards the program’s reauthorization.
Two congressional committees will be central to reauthorizing NMTC. The Senate Finance Committee is led by Chairman Ron Wyden, D-Ore., and Ranking Member Orrin Hatch, R-Utah.
The House Ways and Means Committee is led by Chairman David Camp, R-Mich., and Ranking Member Sander Levin, D-Mich. Both of these committees and their chairmen have been engaged in comprehensive tax reform efforts, and those efforts will very likely inform their position on NMTC, to a certain extent.
In addition to these key players, several members of the Senate Finance Committee and House Ways and Means Committee represent states and districts with large tribal populations. For example, Sen. John Thune, R-S.D. and Reps. Paul Ryan, R-Wis., Devin Nunes, R-Calif., Erik Paulsen, R-Minn., Xavier Becerra, D-Calif., Mike Thompson, D-Calif., Earl Blumenauer, D-Ore., and Ron Kind, D-Wis. These are just a few of the lawmakers who may be involved with reauthorizing the NMTC program.
One of the best ways to explain the importance of the tax credit program is to show lawmakers what it accomplishes. Meet with them to share the story of a development in Indian Country made possible with NMTCs. Be sure to describe how those developments will benefit people in their state and district. The tangible economic and social benefits the NMTC program provides are among its best assets.
Be prepared to explain or reiterate the role that the tax credit played in the development’s realization. Many important developments would not have been possible without NMTCs, and making those investments feasible is precisely what Congress intended when the program was enacted. This point is especially important in the context of tax reform because the NMTC program is accomplishing the purpose for which it was created.
Also, don’t forget to put the development in context. You can mention other NMTC developments in the area or state, as often these transactions are catalytic and generate momentum for additional economic development.