To our friends, clients and colleagues in local and regional government, higher education and the nonprofit sector, welcome to our latest Monday Message from the Public Law Group at McDonald Hopkins. In today’s email, assembled by attorneys Kaitlin Corkran, Kirstyn Wildey, Amy Wojnarwsky and Kevin Butler, you’ll find insights into areas of law we’re watching on your behalf.
In today’s edition:
- Federal tax credit programs fuel solar energy development
- Benefit corporations go live in Ohio starting March 24
- Wojnarwsky, Contini judge student ‘impact investment’ contest
- Pandemic income tax reform back on General Assembly’s agenda
- Cleveland land planning symposium features Wildey as session moderator
Federal tax credit programs fuel solar energy development
In today’s edition of the Monday Message, our colleague Kaitlin Corkran continues our series, begun last year, on economic development tools found right in our backyard – this time highlighting special financing vehicles that benefit solar energy development.
Kaitlin reports that the solar energy industry experienced significant growth in late 2020 and is expected to continue to thrive in 2021. In this growth environment, solar energy developers will seek innovative and cost-effective financing solutions. Fortunately, specialized financing tools are available to the solar energy industry, including the federal investment tax credit and the federal new markets tax credit.
- Investment Tax Credit: The ITC program encourages investment in renewable energy properties, and benefits renewable energy projects by providing equity capital. The ITC offsets taxes dollar-for-dollar and is claimed in the year the solar technology is placed in service. Solar energy projects utilizing ITCs typically structure the transaction so private investors make equity investments in the entity undertaking the project and capture the tax incentive provided by the ITC.
- New Markets Tax Credit: The NMTC program attracts investment in disadvantaged census tracts and drives down the price of solar toward parity with grid pricing. Solar projects benefit from NMTCs via “soft” loans and/or equity investments from private investors receiving the tax credits. The NMTC can be a critical part of the capital stack for a solar project located in a disadvantaged neighborhood and can be bundled with the ITC.
McDonald Hopkins is uniquely positioned to assist clients from inception to completion of their solar development projects by combining the expertise of attorneys and practice groups who focus their work on tax equity, energy development, commercial finance, real estate, and government relations. MH has the distinctive ability to help clients to identify future opportunities for growth and to secure the financing needed for successful solar energy projects. Contact Kaitlin or Chad Arfons for more information and guidance.
Benefit corporations go live in Ohio starting March 24
Amy Wojnarwsky reminds us today that S.B. 21, passed by the Ohio General Assembly and signed by Gov. Mike DeWine last year, is effective on March 24 and will allow entities to form as benefit corporations or to convert to become benefit corporations. A traditional for-profit corporation’s duty is to maximize profits for its shareholders, and taking actions to promote social or environmental causes that do not directly serve profits could be considered a violation of this duty. A benefit corporation, on the other hand, is an entity which operates for profit and also has a social or environmental purpose.
Prior to S.B. 21’s effective date, entities may not form or convert to promote “purposeful profits” and instead are limited by the duty requiring profit maximization without other goals. Later this month, however, business owners will have greater flexibility in determining the goals of their organization when the legislation goes into effect.
For information about benefit corporations in Ohio, please contact Amy, Teresa Metcalf Beasley or Mike Wise, the three co-chairs of the Social Corporate Governance & Impact Investing practice, and read more by clicking here.
Wojnarwsky, Contini judge student ‘impact investment’ contest
We’re pleased to learn Amy’s work helming McDonald Hopkins’ social corporate governance practice is leading to other worthwhile endeavors. On February 28, she and Christal Contini of the firm’s Business Department participated as judges in the MH-sponsored, second-annual Fowler Center Impact Investing Competition for Case Western Reserve University students. The competition engaged students with the Fowler Center's mission and provided a real-world scenario to help students learn about impact investment through a unique exercise and networking opportunity.
The 2021 competition allowed students to think like investment analysts in order to evaluate the price and strategic fit of various investment opportunities designed to create purposeful profits. Additional details about the competition can be found here.
Pandemic income tax reform back on General Assembly’s agenda
Last year we wrote several times about twin measures pending in Columbus that, if passed, would have eliminated the income-tax-withholding provision in the state’s omnibus coronavirus pandemic response bill. That provision preserves the city in which an employer is located as the usual place of employment for those telecommuting during the governor’s declared state of emergency, which is ongoing. Each measure failed to clear its respective committee last year, but new legislation – S.B. 97 and H.B. 157 – has been introduced that would have the very same effect if passed.
The outcome of this legislative effort, as well as pending litigation on the same subject, is of great concern to the state’s larger municipal centers of employment. We’ll continue to follow the companion bills and the litigation and report on them here.
Cleveland land planning symposium features Wildey as session moderator
Cheers to our colleague Kirstyn Wildey, who on March 3 facilitated a breakout session for the “Building the 21st Century City: The Future is Now!” virtual symposium. The two-day symposium, hosted by the City of Cleveland and the Urban Land Institute’s Cleveland District Council with support from the Cleveland Foundation, brought more than 200 attendees together virtually to focus on three critical components impacting the development and success of cities in the 21st Century: economic development, mobility, and technology.
Kirstyn, who is an active member of ULI and focuses her legal practice in the areas of tax credit finance and commercial real estate, led an engaging discussion focused on the topics of inclusive economic development and innovation districts.
The symposium served as an important first step in helping develop a framework to drive economic development and position Cleveland to meet the challenges of the 21st century. For more information on the Urban Land Institute in Cleveland, click here.
Feel free to contact any member of the McDonald Hopkins Public Law team if you have questions or need assistance on any of the matters we’ve covered above or with your legal needs in general.
Teresa Metcalf Beasley
Chair, Public Law