Bipartisan legislation recently introduced by U.S. Rep. Pat Tiberi (R-OH) would protect the ability of state and local governments to leverage private investments to support local economic development projects.
The Preserving Investment in Neighborhoods (PIN) Act would amend Section 118 of the federal tax code to make public capital contributions to economic development projects tax-exempt for partnerships and LLCs structured as partnerships.
Because partnerships were not widely used when Section 118 was drafted, they are not specifically listed as tax-exempt under the law in terms of public capital contributions. As a result, real estate partnerships are somewhat discouraged from investing in areas with the greatest need.
“We want to ensure that we provide the right incentives for state and local governments to work with partnerships to help our communities grow and thrive,” Tiberi said. “The PIN Act is a commonsense fix to boost private sector investment and encourage job creation in places that need it the most.”
The PIN Act would expand applications of Section 118 to partnerships in an effort to bolster private investments in economic development projects.
U.S. Rep. Danny Davis (R-IL), who introduced the bill with Tiberi, said it would address the need for targeted investment in a practical way.
“Small business, local businesses, generate a significantly greater share of jobs and economic activity than their share of the economy would suggest,” Davis said. “Investment in our neighborhoods will stimulate additional investment and leverage each dollar for maximum impact.”