Washington Report. Michael Novogradac. Jeffrey McMillen. Bob Rapoza. Novogradac & Company Akin Gump Strauss Hauer & Feld LLP

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2 Washington Report MODERATOR Michael Novogradac Novogradac & Company PANELISTS Jeffrey McMillen Akin Gump Strauss Hauer & Feld LLP Bob Rapoza Rapoza

3 The Washington Report What to expect the balance of 2016 Presidential Candidates and the NMTC Possible Election Outcomes Key Legislation Advocacy

4 So, what should we expect for the remainder of 2016?

5 So, what should we expect for the remainder of 2016?

6 Sep. 30 Fiscal year end Oct. 20 Today Nov. 8 Presidential election Dec. 9 CR expires Dec. 31 Various extenders expire, including ITC for certain technologies, 45L, 179D Jan. 20 Presidential inauguration Mar. 15 Debt limit suspension expires President-elect transition period SEP OCT NOV DEC JAN FEB House in Session 16 days left in session for MAR 20 days left in session for 2016 Senate in Session

7 Presidential Candidates and NMTCs DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON Includes expansion and permanency of the new markets tax credit as part of her policy platform Plans to use NMTCs to address coal and manufacturing communities Calls to double the amount of credits available Cosponsored NMTC extension bill during her time as a senator S.1239 NMTC Extension Act of 2007 TRUMP

8 Presidential Candidates and NMTCs DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON Includes expansion and permanency of the new markets tax credit as part of her policy platform Plans to use NMTCs to address coal and manufacturing communities Calls to double the amount of credits available Cosponsored NMTC extension bill during her time as a senator S.1239 NMTC Extension Act of 2007 TRUMP

9 Presidential Candidates and NMTCs DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON Includes expansion and permanency of the new markets tax credit as part of her policy platform Plans to use NMTCs to address coal and manufacturing communities Calls to double the amount of credits available Cosponsored NMTC extension bill during her time as a senator S.1239 NMTC Extension Act of 2007 TRUMP

10 Presidential Candidates and NMTCs DEMOCRATIC CANDIDATE REPUBLICAN CANDIDATE CLINTON TRUMP?

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12 Clinton v. Trump Hillary Clinton 49.1% Donald Trump 41.9% Clinton v. Trump v. Johnson v. Stein Hillary Clinton 46.1% Donald Trump 39.2% Gary Johnson 6.7% Jill Stein 2.4% As of 10/19/2016

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17 Current House and Senate Leadership HOUSE SENATE REP. RYAN Speaker Wis. - 1 REP. PELOSI Minority Leader Calif SEN. MCCONNELL Majority Leader Kentucky SEN. REID Minority Leader Nevada

18 Potential future Current House and Senate Leadership HOUSE SENATE REP. RYAN Speaker Wis. - 1 REP. PELOSI Minority Leader Calif SEN. MCCONNELL Majority Leader Kentucky SEN. SCHUMER Minority Leader New York

19 November 2016 PROTECTING OURSELVES SEEKING RESOURCES The Defensive Path The Offensive Path

20 Recent Presidents Who Had Major Tax Bills the Year of Their Inauguration OBAMA BUSH CLINTON BUSH REAGAN CARTER

21 Tax Proposals COMPONENT Increases revenue by $1.4 trillion + $200 billion in interest savings 10-Year Cost Static Scoring Cost of $6.2 trillion + $1 trillion in interest No change in individual rates, but 4 percent surtax on rich Tax Rates/Brackets Three individual tax brackets: 12, 25, 33%

22 Tax Proposals COMPONENT Raising holding period for capital gains, tax carried interest as ordinary income Limit value of certain deductions to 28 percent; refundable out of pocket healthcare credit; doubles child tax credit; WOTC; doubles NMTC, increase EITC Capital Gains, Dividends, Interest Income Individual Exemptions, Deductions, & Credits Repeal ACA investment surtax, tax carried interest as ordinary income Consolidate/increase standard deduction, cap individual deductions at $100k for indiv, $200k for couples, create childcare tax credit, increase EITC

23 Tax Proposals COMPONENT Penalize inversions, allow businesses a standard deduction, businesses with $1 million or less in revenue allowed cash accounting Business taxes Reduce corporate rate to 15 percent by eliminating most business tax deductions, most pass-throughs taxed at 15 percent Increase Estate Tax, tax high frequency traders, repeal Cadillac tax Other Repeal Estate and Gift Tax, Repeal AMT, Repeal ACA

24 Hillary Clinton s Spending Proposals $1.8 trillion over 10 years including: $25 billion bond bank +$275 billion for highways, bridges, public transit, etc. $20 billion for youth jobs; Expanded CDFI Fund Focus on rural and coal areas

25 Legislation and Advocacy

26 Permanency Bill House of Representatives Rep. Pat Tiberi R - Ohio Rep. Richard Neal D - Massachusetts Rep. Tom Reed R - New York

27 Up for reelection Permanency Bill Senate New majority leader? Sen. Blunt R Mo. Sen. Daines R Mont. Sen. Schumer D N.Y. Sen. Cardin D Md.

28 Louisiana Flood Relief Bill House of Representatives Would create additional allocation of NMTCs: $300 million for 2016 and 2017, $400 million 2018 Rep. Boustany R La. Would raise LA LIHTC ceiling by at least $3.5 million in 2017 and as much as $18 per capita of storm/disaster area in Additional $2,500 per capita bond cap for storm/disaster area

29 Louisiana Flood Relief Bill House of Representatives Would create additional allocation of NMTCs: $300 million for 2016 and 2017, $400 million 2018 Rep. Boustany R La. Would raise LA LIHTC ceiling by at least $3.5 million in 2017 and as much as $18 per capita of storm/disaster area in Additional $2,500 per capita bond cap for storm/disaster area

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31 Looking Forward Coalition Legislative Agenda (Statutory Changes): Make the program permanent Increase allocation to $10 billion Increase NMTC pricing through AMT relief Enhance credit s value by removing the basis reduction Address concerns with Targeted Populations Provide Treasury with contingency authority for natural disasters Sudden and Severe Job Losses Tax Credit (aka the Manufacturing Communities Tax Credit )

32 Coalition s Plan Continue to Engage with Congress; Site Visits; NMTC AT Work -profiles of NMTC projects from Coalition Members; Briefing paper and meetings with Presidential Transition Teams; and Conference December 14th and 15th

33 $7 Billion Allocation

34 nmtccoalition.org

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38 Questions? MODERATOR Michael Novogradac Novogradac & Company PANELISTS Jeffrey McMillen Akin Gump Strauss Hauer & Feld LLP Bob Rapoza Rapoza

39 Washington Report MODERATOR Michael Novogradac Novogradac & Company PANELISTS Jeffrey McMillen Akin Gump Strauss Hauer & Feld LLP Bob Rapoza Rapoza