I 

116TH CONGRESS 

2D SESSION H. R. 8965 

To amend the Internal Revenue Code of 1986 to make certain improvements 

to the new markets tax credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 14, 2020 

Ms. SEWELL of Alabama (for herself and Mr. REED) 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 make 

certain improvements to the new markets tax credit, 

and for other purposes. 

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 Sta5 bilization Act’’. 

6 SEC. 2. IMPROVEMENTS TO NEW MARKETS TAX CREDIT. 

7 (a) ADDITIONAL ALLOCATIONS.— 

8 (1) IN GENERAL.—Section 45D(f)(1) of the In9 ternal Revenue Code of 1986 is amended by striking 


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1 subparagraphs (G) and (H) and inserting the fol2 lowing new subparagraphs: 

3 ‘‘(G) $3,500,000,000 for each of calendar 

4 years 2010 through 2018, 

5 ‘‘(H) $4,000,000,000 for calendar year 

6 2019, 

7 ‘‘(I) $7,000,000,000 for calendar year 

8 2020, 

9 ‘‘(J) $6,500,000,000 for calendar year 

10 2021, and 

11 ‘‘(K) $5,500,000,000 for calendar year 

12 2022.’’. 

13 (2) CONFORMING AMENDMENT.—Section 

14 45D(f)(3) of such Code is amended by striking 

15 ‘‘2025’’ and inserting ‘‘2027’’. 

16 (3) SPECIAL RULE FOR ALLOCATIONS OF IN17 CREASED 2019 AND 2020 LIMITATION.—The amount 

18 of the increase by reason of the amendments made 

19 by paragraph (1) in the new markets tax credit limi20 tation for calendar year 2019 and the amount of 

21 such increase for calendar year 2020 shall each be 

22 allocated in accordance with section 45D(f)(2) of the 

23 Internal Revenue Code of 1986 to qualified commu24 nity development entities (as defined in section 

25 45D(c) of such Code) which— 


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1 (A) submitted an allocation application 

2 with respect to the calendar year to which such 

3 increase relates, and 

4 (B)(i) did not receive an allocation with re5 spect to such calendar year, or 

6 (ii) received an allocation for such calendar 

7 year in an amount less than the amount re8 quested in the allocation application. 

9 (b) PERMANENT ALLOWANCE OF CREDIT AGAINST

10 ALTERNATIVE MINIMUM TAX.— 

11 (1) IN GENERAL.—Section 38(c)(4)(B) of the 

12 Internal Revenue Code of 1986 is amended clauses 

13 (vii) through (xii) as clauses (viii) through (xiii), re14 spectively, and by inserting after clause (vi) the fol15 lowing new clause: 

16 ‘‘(vii) the credit determined under sec17 tion 45D to the extent attributable to 

18 qualified equity investments originally 

19 issued after the date of the enactment of 

20 this clause,’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall apply to taxable years end23 ing after the date of the enactment of this Act. 

24 (c) CREDIT ALLOWED TO BE CARRIED BACK 5 

25 YEARS AND TO OFFSET ENTIRE TAX LIABILITY AS TEMVerDate Sep 11 2014 00:08 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8965.IH H8965

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1 PORARY INCENTIVE FOR MAKING INVESTMENTS IN

2 QUALIFIED COMMUNITY DEVELOPMENT ENTITIES.— 

3 (1) IN GENERAL.—In the case of the portion of 

4 the new markets tax credit determined under section 

5 45D of the Internal Revenue Code of 1986 which is 

6 attributable to qualified equity investments originally 

7 issued after the date of the enactment of this Act 

8 and before January 1, 2023— 

9 (A) sections 38 and 39 of such Code shall 

10 be applied separately with respect to such por11 tion, 

12 (B) notwithstanding section 39(d) of such 

13 Code, section 39(a) of such Code shall be ap14 plied— 

15 (i) by substituting ‘‘each of the 5 tax16 able years’’ for ‘‘the taxable year’’ in para17 graph (1)(A) thereof, 

18 (ii) by substituting ‘‘25 taxable years’’ 

19 for ‘‘21 taxable years’’ in paragraph (2)(A) 

20 thereof, and 

21 (iii) by substituting ‘‘24 taxable 

22 years’’ for ‘‘20 taxable years’’ in subpara23 graph (2)(B) thereof, 


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1 (C) the amounts described in subpara2 graphs (A) and (B) of section 38(c)(1) of such 

3 Code shall each be treated as being zero, and 

4 (D) the limitation under section 38(c)(1) 

5 of such Code (as modified by subparagraph 

6 (C)) shall be reduced by the credit allowed 

7 under section 38(a) for the taxable year (other 

8 than the portion of qualified new markets tax 

9 credit to which this paragraph applies). 

10 (2) COORDINATION WITH OTHER LIMITA11 TIONS.—The portion of the new markets tax credit 

12 to which paragraph (1) applies— 

13 (A) shall not be taken into account as a 

14 credit allowed under section 38(a) of such Code 

15 for purposes of paragraphs (2)(A)(ii)(II) and 

16 (4)(A)(ii)(II) of section 38(c) of such Code, and 

17 (B) shall not be treated as described in 

18 section 38(c)(4)(B)(vii) of such Code, as 

19 amended by this Act. 

20 (d) TEMPORARY OVERRIDE OF CERTAIN REGULA21 TIONS TREATING DEBT MODIFICATIONS AS EX22 CHANGES.— 

23 (1) IN GENERAL.—For purposes of the Internal 

24 Revenue Code of 1986, any modification of a QCDE 

25 loan which occurs during the period beginning on 


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1 March 12, 2020, and ending on December 31, 2022, 

2 shall not be treated an exchange of an existing debt 

3 instrument for a new debt instrument. 

4 (2) QCDE LOAN.—For purposes of this sub5 section, the term ‘‘QCDE loan’’ means any debt in6 strument held by a qualified community development 

7 entity (as defined in section 45D(c) of the Internal 

8 Revenue Code of 1986) to the extent that the bor9 rower is a qualified active low-income community 

10 business (as defined in section 45D(d)(2) of such 

11 Code). 

Æ 


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