I 

113TH CONGRESS 

1ST SESSION H. R. 3439 

To amend the Internal Revenue Code of 1986 to provide for the permanent 

application of the new markets tax credit for the redevelopment of 

communities impacted by realignment or closure of military installations. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 30, 2013 

Mr. THOMPSON of California (for himself and Mr. HALL) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for the permanent application of the new markets tax 

credit for the redevelopment of communities impacted 

by realignment or closure of military installations. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘New Markets Tax 

5 Credit Military Installation Act of 2013’’ or the ‘‘NMTC 

6 Military Installation Act’’. 

7 SEC. 2. FINDINGS. 

8 Congress finds the following: 


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1 (1) Since 1988, through 5 separate rounds of 

2 the Base Realignment and Closure process, more 

3 than 300 military installations located in 48 States 

4 and 3 United States territories have had their mis5 sions eliminated or realigned. 

6 (2) 120 of these former installations were 

7 ‘‘major’’ base closures, resulting in the loss of 300 

8 or more military and civilian jobs at each closure. 

9 While these communities received Federal support in 

10 the 1990s, there are currently no Federal programs 

11 to support the physical redevelopment at closed or 

12 realigned installations. 

13 (3) Despite local active efforts to promote rede14 velopment, nearly 100 of these closed or realigned 

15 military installations are located in economically dis16 tressed communities now suffering from high unem17 ployment and disproportionately high poverty rates 

18 as determined by the Department of the Treasury. 

19 (4) More than 20 of these former installations 

20 are located in even harder hit ‘‘severely distressed’’ 

21 communities as defined by the Department of the 

22 Treasury. 

23 (5) One example is the City of Vallejo, Cali24 fornia, which in 2008 filed for bankruptcy protection 

25 due in part to closure of the Mare Island Naval 


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1 Shipyard and the accompanying loss of almost 

2 10,000 jobs. 

3 (6) When a military base is closed, the Depart4 ment of Defense is required to complete any nec5 essary environmental cleanup at the former base and 

6 then transition the property to a Local Redevelop7 ment Authority, usually a local government. To8 gether, the Department of Defense Office of Eco9 nomic Adjustment and the Local Redevelopment Au10 thority create a redevelopment plan for the property. 

11 The goal of this process is to lead to a timely, bene12 ficial, revenue generating reuse of these former mili13 tary bases. 

14 (7) However, numerous former military installa15 tions have taken much longer and cost much more 

16 than expected to clean up, thereby significantly de17 laying reuse and causing many of these communities 

18 to become or remain economically distressed. 

19 (8) In 2000, the New Markets Tax Credit 

20 (NMTC) program was created to spur private sector 

21 investment in low-income communities suffering 

22 from chronic unemployment and high poverty rates 

23 by providing investors with a 7-year, 39-percent 

24 Federal income tax credit for investments made 

25 through investment vehicles known as Community 


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1 Development Entities. According to the Department 

2 of the Treasury, every $1 of foregone tax revenues 

3 under the NMTC program leverages about $12 of 

4 private investment in distressed communities on a 

5 cost basis. 

6 (9) Recently, the community in Brunswick, 

7 Maine, has been successfully redeveloping the former 

8 Naval Air Station located there, by using among 

9 other tools the NMTC. In particular, the NMTC was 

10 used to build a new, $15 million, 80,000 square foot 

11 manufacturing facility operated by Swedish medical 

12 supply maker Molnlycke Health Care. A second 

13 NMTC was used to make $20 million in renovations 

14 of facilities now operated by aircraft manufacturer 

15 Kestrel Aeroworks. This latter project could have 

16 been 3 times as large had additional NMTC funds 

17 been available. These two projects alone will bring 

18 over 200 high-tech, high-wage jobs among other sig19 nificant economic benefits to this economically dis20 tressed former military community. 

21 (10) Communities surrounding these former 

22 military installations still face the difficult challenges 

23 of economic redevelopment resulting from the loss of 

24 the Federal workforce and the supporting infrastruc25 ture associated with the former military missions loVerDate Mar 15 2010 23:47 Nov 08, 2013 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3439.IH H3439

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1 cated there. Focusing part of the successful NMTC 

2 to help these communities that are still struggling 

3 after the military exodus will help facilitate the eco4 nomic redevelopment that these distressed commu5 nities need. 

6 SEC. 3. PERMANENT APPLICATION OF NEW MARKETS TAX 

7 CREDIT LIMITATION WITH RESPECT TO COM8 MUNITIES IMPACTED BY REALIGNMENT OR 

9 CLOSURE OF MILITARY INSTALLATIONS. 

10 (a) IN GENERAL.—Subsection (f) of section 45D of 

11 the Internal Revenue Code of 1986 is amended by adding 

12 at the end the following new paragraph: 

13 ‘‘(4) SPECIAL RULE FOR ALLOCATION OF LIMI14 TATION FOR REDEVELOPMENT OF COMMUNITIES IM15 PACTED BY REALIGNMENT OR CLOSURE OF MILI16 TARY INSTALLATIONS.— 

17 ‘‘(A) IN GENERAL.—Notwithstanding para18 graph (1), for calendar year 2014 (and each 

19 calendar year thereafter) the Secretary shall al20 locate $100,000,000 in new markets tax credit 

21 limitation among qualified development entities 

22 selected by the Secretary to make qualified low23 income community investments within the 

24 former boundaries of military installations re25 aligned or closed pursuant to a base closure law 


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1 (as defined in section 101(a)(17) of title 10, 

2 United States Code). 

3 ‘‘(B) QUALIFIED DEVELOPMENT ENTITY

4 MISSION REQUIREMENT.—A qualified commu5 nity development entity shall be eligible for an 

6 allocation under subparagraph (A) only if a sig7 nificant mission of such entity is the redevelop8 ment of such a military installation. 

9 ‘‘(C) CARRYOVER OF UNUSED LIMITA10 TION.—If the new markets tax credit limitation 

11 for any calendar year exceeds the aggregate 

12 amount allocated under subparagraph (A) for 

13 such year, such limitation for the succeeding 

14 calendar year shall be increased by the amount 

15 of such excess.’’. 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to allocations after December 31, 

18 2013. 

Æ 


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