The NMTC is currently expired and awaiting reauthorization. A revised tax extenders bill passed the House on May 28^th and is currently pending in the Senate. Senate leadership withdrew the bill from consideration in late June due to a failure to get the 60 votes necessary to end debate on the measure. At issue is how to “pay for” the extension of the tax provisions.

Insiders are still hopeful that Congress will extend the program with a significant improvement. The bill that passed the House would extend the NMTC for one year with $5 billion in allocation authority. For NMTC investments made between 3/15/2010 and 1/1/2012, the legislation would provide relief from the Alternative Minimum Tax, opening up the possibility of significant fundraising from individual investors. The Obama administration’s FY 2011 budget also contains a $5 billion allocation, though $250 million of credits would be earmarked for the Healthy Foods Financing Initiative, intended to support financing of healthy food options in distressed communities.

The NMTC remains a program popular with influential legislators. In early July, Sen. Mary Landrieu (D-LA) and four other senators from Gulf states wrote a letter to Senate Finance Committee leadership seeking a package of tax incentives to provide relief for struggling small businesses hit hard by the oil spill, to create jobs and give a boost to travel and tourism along the Gulf Coast. The proposal would provide a special NMTC allocation for the oil spill recovery zone.

If the NMTC is not reauthorized, no awards will be made in the 8th application round, which concluded on June 2nd. Proponents of the NMTC have sought to have the program reauthorized by separate legislation. Several bills that would have that effect remain pending in both chambers. There is some chance that the extenders bill could be resurrected in the work period that remains before the August recess, but it is also possible that an extension will not be considered until a lame-duck session after the November elections.