NEW MARKETS TAX CREDITS

1. NEW MARKETS TAX CREDITS Roundtable Discussion Sponsored By www.ValleyWide-LLC.com Discussion Leaders Vince Bekiempis, AICP -Bekiempis and Associates Greg Peil -The Reinvestment Fund

2. NEW MARKETS TAX CREDIT The New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs).

3. To qualify as a CDE, an organization must: Be a domestic corporation or partnership at the time of the certification application; Demonstrate a primary mission of serving or providing investment capital for low-income communities or low-income persons; and Maintain accountability to residents of low-income communities through representation on a governing board of, or advisory board to, the entity. COMMUNITY DEVELOPMENT ENTITY

4. NEW MARKETS TAX CREDIT Qualified equity investments must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. In each of the first three years, the investor receives a credit equal to five percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is six percent annually. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period.

5. To date, the Community Development Financial Institutions (CDFI) Fund of the U.S. Department of the Treasury made 495 awards totaling $26 billion in allocation authority: First Round was 2001-2002; Subsequent Rounds were 2003-2009. The CDFI Fund estimates that for the 2010 round there will be no more than $150 million per allocation. ALLOCATIONS

6. Allocatees by Type: (the largest number of type listed first) Non-Profits CDFIs Banks/Public Companies Government Entities Real Estate Companies ALLOCATEES

7. Release of Notice of Allocation Availability: April 7, 2010 Federal Register / Vol. 75, No. 67 / Thursday, April 8, 2010 CDE Certification Applications must be postmarked on or before: April 26, 2010, 5:00 PM Questions Regarding Applications: May 31, 2010 5:00 PM Online Submission of Allocation Application: June 2, 2010, 5:00 PM Allocation decisions will be made in December 2010 SCHEDULE

8. Part I Business Strategy 25 points Products, Services, and Investment Criteria Prior Performance Projected Business Activities Non-Metropolitan Counties (counties that not contained in a Metropolitan Statistical Area) Investments in Unrelated Entities Statutory Priority 1: 5 points for Track Record of Serving Disadvantaged Businesses or Communities Statutory Priority 2: 5 points for Investing in Unrelated Entities APPLICATION SECTIONS

9. Part II Community Impact25 points Targeting the Use of Qualified Low-Income Community Investments (QLICI) Community Development Outcomes – Prior Performance and Projections Part III Management Capacity25 points Part IV Capitalization Strategy25 points Investor Strategy Sources and Uses of Capital APPLICATION SECTIONS

10. REVIEWS AND SCORING The CDFI Fund selects “Reviewers” from around the country who are experienced in finance, housing, and community development to score the applications. Reviewers read each Section and Table. Qualitative and Quantitative data are analyzed and scored in each section using a scale with five (5) rankings: Excellent Good Average Limited Weak Each section’s rank is based on different scoring criteria (e.g. percent completed, a quantity, supported vs. unsupported, high/low qualifications, confidence investment will occur, better/worse, etc.).

11. SCORING AND REVIEWS After each section the Reviewers are required to justify the score in text. Reviewers are also required to list the Strengths and Weaknesses of each section so that applicants can be debriefed and receive useful information for the next application.

12. Start early, at least one year before the next round. Insert your products, services, and activities into the previous round’s application to pre-score your application. You can work on enhancing sections to improve your score. This, of course, could take some time depending on your score. Continue to develop partnerships, and obtain firm commitments, not letters of support. TIPS FOR A HIGHER SCORE

13. Investment in an airplane parts manufacturer that allowed it to open a new plant in rural Oklahoma, which will create 500 new jobs in a low income community The development of a high-tech business incubator in Detroit that will provide opportunities for minority, women and other small business owners. A 161,000 SF manufacturing facility in rural Iowa that manufactures parts for wind turbines. The development of a charter school, serving 650 middle school and high school students, in the Crenshaw neighborhood of south Los Angeles. An emergency worker training facility in Lafayette, LA, developed in the aftermath of Hurricane Katrina, which will train more than 240 students per year and provide more than 60 permanent jobs. A mixed-use housing and retail development, anchored by a national chain grocery store, located on a vacant military site in a severely distressed community in Washington, D.C. A loan to a Native American businesswoman who operates a pharmacy in western Montana that will enable her to own her business facility for the first time, and create jobs in a high poverty rural community. Investment in a community health center in San Diego, CA that enabled it to create a new maternal and child health care center. EXAMPLES OF PROJECTS

28. NEW MARKETS TAX CREDITS Roundtable Discussion Sponsored By www.ValleyWide-LLC.com Discussion Leaders Vince Bekiempis, AICP -Bekiempis and Associates Greg Peil -The Reinvestment Fund