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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘New Markets Sta-
bilization Act’’. 
SEC. 2. IMPROVEMENTS TO NEW MARKETS TAX CREDIT. 
(a) ADDITIONAL ALLOCATIONS.— 
(1) IN GENERAL.—Section 45D(f)(1) of the In-
ternal Revenue Code of 1986 is amended by striking 
VerDate Sep 11 2014 
00:08 Dec 29, 2020
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H8965.IH
H8965
pamtmann on DSKBC07HB2PROD with BILLS
subparagraphs (G) and (H) and inserting the fol-
lowing new subparagraphs: 
‘‘(G) $3,500,000,000 for each of calendar 
years 2010 through 2018, 
‘‘(H) $4,000,000,000 for calendar year 
2019, 
‘‘(I) $7,000,000,000 for calendar year 
2020, 
‘‘(J) $6,500,000,000 for calendar year 
2021, and 
‘‘(K) $5,500,000,000 for calendar year 
2022.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
45D(f)(3) of such Code is amended by striking 
‘‘2025’’ and inserting ‘‘2027’’. 
(3) SPECIAL RULE FOR ALLOCATIONS OF IN-
CREASED 2019 AND 2020 LIMITATION.—The amount 
of the increase by reason of the amendments made 
by paragraph (1) in the new markets tax credit limi-
tation for calendar year 2019 and the amount of 
such increase for calendar year 2020 shall each be 
allocated in accordance with section 45D(f)(2) of the 
Internal Revenue Code of 1986 to qualified commu-
nity development entities (as defined in section 
45D(c) of such Code) which— 
VerDate Sep 11 2014 
00:08 Dec 29, 2020
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H8965.IH
H8965
pamtmann on DSKBC07HB2PROD with BILLS
(A) submitted an allocation application 
with respect to the calendar year to which such 
increase relates, and 
(B)(i) did not receive an allocation with re-
spect to such calendar year, or 
(ii) received an allocation for such calendar 
year in an amount less than the amount re-
quested in the allocation application. 
(b) PERMANENT ALLOWANCE OF CREDIT AGAINST 
ALTERNATIVE MINIMUM TAX.— 
(1) IN GENERAL.—Section 38(c)(4)(B) of the 
Internal Revenue Code of 1986 is amended clauses 
(vii) through (xii) as clauses (viii) through (xiii), re-
spectively, and by inserting after clause (vi) the fol-
lowing new clause: 
‘‘(vii) the credit determined under sec-
tion 45D to the extent attributable to 
qualified 
equity 
investments 
originally 
issued after the date of the enactment of 
this clause,’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years end-
ing after the date of the enactment of this Act. 
(c) CREDIT ALLOWED TO BE CARRIED BACK 5 
YEARS AND TO OFFSET ENTIRE TAX LIABILITY AS TEM-
VerDate Sep 11 2014 
00:08 Dec 29, 2020
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H8965.IH
H8965
pamtmann on DSKBC07HB2PROD with BILLS
PORARY
INCENTIVE
FOR
MAKING
INVESTMENTS
IN 
QUALIFIED COMMUNITY DEVELOPMENT ENTITIES.— 
(1) IN GENERAL.—In the case of the portion of 
the new markets tax credit determined under section 
45D of the Internal Revenue Code of 1986 which is 
attributable to qualified equity investments originally 
issued after the date of the enactment of this Act 
and before January 1, 2023— 
(A) sections 38 and 39 of such Code shall 
be applied separately with respect to such por-
tion, 
(B) notwithstanding section 39(d) of such 
Code, section 39(a) of such Code shall be ap-
plied— 
(i) by substituting ‘‘each of the 5 tax-
able years’’ for ‘‘the taxable year’’ in para-
graph (1)(A) thereof, 
(ii) by substituting ‘‘25 taxable years’’ 
for ‘‘21 taxable years’’ in paragraph (2)(A) 
thereof, and 
(iii) by substituting ‘‘24 taxable 
years’’ for ‘‘20 taxable years’’ in subpara-
graph (2)(B) thereof, 
VerDate Sep 11 2014 
00:08 Dec 29, 2020
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H8965.IH
H8965
pamtmann on DSKBC07HB2PROD with BILLS
(C) the amounts described in subpara-
graphs (A) and (B) of section 38(c)(1) of such 
Code shall each be treated as being zero, and 
(D) the limitation under section 38(c)(1) 
of such Code (as modified by subparagraph 
(C)) shall be reduced by the credit allowed 
under section 38(a) for the taxable year (other 
than the portion of qualified new markets tax 
credit to which this paragraph applies). 
(2) 
COORDINATION
WITH
OTHER
LIMITA-
TIONS.—The portion of the new markets tax credit 
to which paragraph (1) applies— 
(A) shall not be taken into account as a 
credit allowed under section 38(a) of such Code 
for purposes of paragraphs (2)(A)(ii)(II) and 
(4)(A)(ii)(II) of section 38(c) of such Code, and 
(B) shall not be treated as described in 
section 38(c)(4)(B)(vii) of such Code, as 
amended by this Act. 
(d) TEMPORARY OVERRIDE OF CERTAIN REGULA-
TIONS
TREATING
DEBT
MODIFICATIONS
AS
EX-
CHANGES.— 
(1) IN GENERAL.—For purposes of the Internal 
Revenue Code of 1986, any modification of a QCDE 
loan which occurs during the period beginning on 
VerDate Sep 11 2014 
00:08 Dec 29, 2020
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H8965.IH
H8965
pamtmann on DSKBC07HB2PROD with BILLS
March 12, 2020, and ending on December 31, 2022, 
shall not be treated an exchange of an existing debt 
instrument for a new debt instrument. 
(2) QCDE LOAN.—For purposes of this sub-
section, the term ‘‘QCDE loan’’ means any debt in-
strument held by a qualified community development 
entity (as defined in section 45D(c) of the Internal 
Revenue Code of 1986) to the extent that the bor-
rower is a qualified active low-income community 
business (as defined in section 45D(d)(2) of such 
Code). 
Æ 
VerDate Sep 11 2014 
00:08 Dec 29, 2020
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6301
E:\BILLS\H8965.IH
H8965
pamtmann on DSKBC07HB2PROD with BILLS