WASHINGTON, D.C. – U.S. Senator Ben Cardin (D-Md.) recently introduced the bipartisan New Market Tax Credit Extension Act of 2015, along with U.S. Senators Roy Blunt (R-Mo.), Chuck Schumer (D-N.Y.) and Steve Daines (R-Mont.).The legislation would make the New Markets Tax Credit (NMTC) program permanent, provide an annual allocation of credits indexed to inflation, and exempt NMTC investments from the Alternative Minimum Tax. U.S. Representatives Pat Tiberi (Ohio) and Richard Neal (Mass.) also recently introduced a version of the bill in the House.
NMTC attracts capital to low-income communities by providing private investors with a 39 percent federal tax credit for investments made in businesses or economic development projects. Click here to read the bill.
“In Maryland, the New Markets Tax Credit has been deployed across the state on a diverse range of community development efforts, from a supermarket project to provide greater access to healthy food in my home city of Baltimore, to a conservation center on the Eastern Shore,” Cardin said. “I am pleased to once again be a supporter of this bipartisan legislation, which will ensure that benefits of the credit will continue to be available to communities across the U.S.”
“The New Markets Tax Credit Program has a history of success in Missouri, leading to billions of dollars in investments and thousands of jobs in rural and urban communities around the state,” Blunt said. “I’m pleased to join my colleagues to introduce this bipartisan bill and make this tax credit permanent so that we can continue to encourage investment, job creation, and economic growth in low-income communities in Missouri and nationwide.”
“I am proud to again sponsor this proposal to make permanent the New Markets Tax Credit program, a proven job creator,” Schumer said. “In New York, the New Markets Tax Credit has been incredibly effective in delivering capital to underserved communities. The program has provided over $6 billion in total project financing to our state, creating nearly 50,000 construction jobs and 20,000 full-time jobs over the last ten years. Development projects, like Roswell’s new Clinical Sciences Center in Buffalo – a $42 million project that will add additional chemotherapy treatment chairs, additional breast cancer screening and treatment space, and new cancer research and clinical space—as well as other projects all across the state in places like Rochester, Schenectady and the Hudson Valley have contributed greatly to economic growth in these communities. Without a doubt, extension of these credits will help continue this momentum and ensure it reaches all pockets of the state.”
“The New Markets Tax Credit has stimulated over $85 million of investment in Montana since 2013 alone,” Daines said. “It is a proven vehicle that spurs private development, creates good paying jobs and increases economic opportunity. This legislation is a much-needed step towards a permanent extension that will help secure the economic stability of our communities and sustain heathy local economies across the nation.”
Background on the New Market Tax Credit Extension Act:
The NMTC program expired on December 31, 2014. Congress first authorized the NMTC program as part of the Community Renewal Tax Relief Act of 2000.
Between 2003 and 2012, over $31 billion in direct NMTC investments created some 750,000 jobs. These NMTC investments leveraged an additional $31 billion in capital from other sources, all of which was invested in communities with high poverty and unemployment rates. While all NMTC investments benefit businesses and projects in low-income communities, NMTC does not target a specific type of business or sector. Decision-making on NMTC investments is at the local level, not in Washington.
In 2012 alone, NMTC investments generated almost $1 billion in federal tax revenue, easily offsetting the estimated $720 million cost of the program for the federal government.