Bipartisan Legislation Introduced in the House to Permanently Extend the New Markets Tax Credit
Representatives Pat Tiberi (R-Ohio-12), Richard Neal (D-Mass.-1) and Tom Reed (R-N.Y.-23) have introduced the New Markets Tax Credit Extension Act of 2015 (H.R. 855) to permanently extend the New Markets Tax Credit (NMTC). This legislation gained strong bipartisan support in the previous Congress, with 81 co-sponsors on H.R. 4365.
Since the NMTC was created in 2000, it has been extended numerous times. Most recently, the “tax extenders” legislation passed in December of 2014 extended program authority through 2014, allowing the Community Development Financial Institutions (CDFI) Fund to award one additional round of NMTCs. However, without Congressional action, the NMTC will remain expired.
“I’ve seen first-hand the benefits of the New Markets Tax Credit in the 12th Congressional District,” Representative Tiberi said in a statement. “Whether it is the financing of a new grocery store in a previously under-served area in Columbus, creating 46 full- and part-time jobs during the project’s first phase or the funding of a recreation and aquatic center in Muskingum County that supports nearly 70 jobs, this tax credit is a tool to help revitalize communities by not only putting people to work but by funding projects that are a community benefit.”
Rep. Neal also called the NMTC “a federal program that works—spurring investment that that grows local economies and generates jobs in the most distressed communities across the nation,” and Rep. Reed described it as “a powerful tool to bring rebirth in our communities.”
Since its inception, the NMTC has directed over $20 billion in private capital into communities with high poverty rates, low incomes and high unemployment rates. This $20 billion has leveraged an additional $25 billion in capital from other public and private sources, financing an array of projects like charter schools, groceries in food deserts, community centers, domestic violence shelters, factories and small business loan funds in distressed urban, suburban and rural communities.
NMTC investments have been involved in developing or rehabilitating over 109 million square feet of real estate and have created over 500,000 jobs in low-income communities. According to the Treasury Department, for every $1 in foregone tax revenue from the NMTC program, approximately $8 of private capital is leveraged for investment in distressed communities.
Companion legislation will be introduced in the Senate in the coming weeks.
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