Kathy McKinney Urges South Carolina's Economic Developers to Take Advantage of Stimulus Financing
February 24, 2010
Bond Lawyer Touts New Market Tax Credits
CHARLESTON, COLUMBIA, FLORENCE, GREENVILLE, & MYRTLE BEACH, SC, AND WASHINGTON, DC – February 24, 2010 – Kathleen C. (Kathy) McKinney, Shareholder of Haynsworth Sinkler Boyd, P.A, and president of the National Association of Bond Lawyers (NABL), addressed the mid-year Legislative Meeting of the South Carolina Economic Developers’ Association (SCEDA) in Columbia.
Speaking on the Stimulus Act and its application to South Carolina projects, McKinney said, “Economic developers must explore all types of financing, including New Market Tax Credits (NMTC), which have been underutilized in the Palmetto State.”
Enacted in 2000, the NMTC program is administered by the Community Development Financial Institutions Fund, an arm of the U.S. Treasury. While relatively little known, the program can be used by most any business that is either located in a low income community or that serves or employs a qualifying number of low income persons.
Also, unlike many tax-exempt bond and similar programs, both profit and nonprofit businesses may benefit from the program, with credits in the amount of 39%, of investment or loan funds, being used directly or sold to third parties for cash. McKinney said, “Businesses are often surprised at the extent of the benefits, as well as the fact that their business meets one or more of the low income tests. In light of the considerable economic benefits available, businesses with a capital need should determine the extent to which NMTCs may be implemented before proceeding with any project, financing or investment.
“In fact, these benefits may often exceed those derived from tax-exempt bonds, she emphasized.
McKinney added, “In these tough economic times, businesses across the Nation have been effectively using this financing tool; it’s time for those in South Carolina to take advantage of this program as well. In fact, due to its resounding success, bills pending in both chambers of Congress should be supported to continue the size and extent of the NMTC program for as long as possible.”
McKinney also urged the developers to view the nonprofit sector as a critical component of economic development in South Carolina. “Hospitals, cultural centers and museums, YMCAs, colleges, and hospices are benefitting from the low cost and much simplified financing that is available to nonprofits in the Stimulus Act. This provision, located in Section 265 of the Internal Revenue Code, is due to expire December 31, 2010. I hope the extension of this sunset date will be supported by our Congressional delegation so that South Carolina can grow more jobs in the nonprofit sector,” she said.
“This 265 provision has taken off like wildfire,” said the president of the national organization comprised of 3,000 municipal lawyers.
“Many of the bond provisions in the Stimulus Act will not benefit SC, unless specific provisions of House Bill 4478 – known as the Economic Development Competitiveness Act – passes the State General Assembly,” added McKinney. “These provisions will allow unused bond allocations to be redeployed to shovel-ready projects that create jobs and expand our economy.”
McKinney, in the past five years, has been bond counsel for more than 100 revenue bond issues, resulting in $3 billion of capital investment in South Carolina. She serves as bond counsel for many of South Carolina’s leading hospitals, including the Greenville Hospital System and other regional hospital systems. She also been bond counsel for colleges and universities, foundations, continuing care retirement centers, and cultural centers.
Listed in The Best Lawyers in America®–Public Finance and Chambers USA, McKinney is a member of the Society of International Business Fellows. Active in state economic development, McKinney serves as chair of the Furman University board of trustees and is a board member of SC Independent Colleges and Universities.
SCEDA, a statewide association of 650+ members, promotes the effectiveness of individuals involved in the practice of economic development in South Carolina by encouraging cooperation, exchange of information and promotion of professional skills.
About the Firm
Haynsworth Sinkler Boyd, P.A. provides business, litigation and financial legal services, and governmental relations to national and international clients. With a history dating back to 1887, it is one of the largest law firms in the Carolinas with more than 135 attorneys. The Firm has offices in Charleston, Columbia, Florence, Greenville, and Myrtle Beach SC, and Washington, DC. For more information, visit www.hsblawfirm.com.
