Congress Considers the Bipartisan ‘New Markets Tax Credit’ Worthy of Permanent Status.
There’s very little to create controversy over in the New Markets Tax Credit. What it aims to do is to shore up the economy and housing markets in financially depressed and outlying rural communities.
Positive reports are coming out of Alabama, New Mexico, Florida, California… all over the map. It’s worked well so far for folks in almost every state, including creation of new jobs. It has helped with redevelopment in 13 communities in Ohio for instance, including Dayton, Akron, and Cincinnati. Historic buildings, architectural and cultural landmarks in some of the cities downtrodden neighborhoods are being restored, insuring more stable property values for homeowners in and around the city.
In a recent release, New Markets Tax Credit Coalition Spokesperson Bob Rapoza stated “The findings clearly demonstrate that the NMTC continues to deliver capital to the communities left behind by the changing economy, with 76 percent of projects in severely distressed communities in the last year—far exceeding statutory requirements. Moreover, the program is delivering a significant ‘bang for the buck’ for taxpayers in terms of the jobs, amenities, community facilities, and tax revenue it generates.” Survey findings show that competition for credits continues to drive gains in efficiency. The data collected shows that CDEs used $1.8 billion in NMTC allocation in 2016 to financed 171 NMTC projects, amounting to $3 billion in total project costs, which created over 36,000 jobs in areas with high rates of poverty and unemployment.
These funds are remarkably flexible and can be used by businesses of any kind. Real Estate developers and investors have taken advantage of funds available through the New Markets Tax Credit. Information on how investors might benefit can be found here.
I can find little to debate here. What bolsters our lower-income communities elevates us all.
Congress Considers ‘New Markets Tax Credit’ Worthy of Permanent Status.
Legislation was recently introduced in the House and Senate to secure the future of the New Markets Tax Credit (NMTC). The bills, both titled The New Markets Tax Credit Extension Act of 2017, respectively H.R. 1098 and S. 384, would ensure that rural communities and urban neighborhoods left outside the economic mainstream have access to financing to grow their economies and create jobs.
Congressman Pat Tiberi (R-OH) and two colleagues on the House Ways and Means Committee, Congressmen Tom Reed (R-NY) and Richard Neal (D-MA), the Ranking Member on the committee, introduced the House bill. They were joined by 19 of their colleagues. In the Senate, the bill was introduced by Senators Blunt (R-MO) and Cardin (D-MD).
Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. Congress extended the NMTC for five years as part of The PATH Act. (P.L. 114-113) in December 2015. Congressional leaders are working on a major tax overhaul, organizations, businesses and communities that have seen the impact of the NMTC have recently urged Congress to make the credit a permanent part of the tax code.
“Last week, some 2,000 groups sent a letter to Congress, calling for legislation that provides a permanent authorization and expansion of the NMTC. The strong support of the New Markets Tax Credit is a direct result of the tangible impact it is making in distressed rural and urban communities that have been left outside the economic mainstream,” says Bob Rapoza, spokesperson for the NMTC Coalition. “The NMTC has generated over 750,000 jobs and delivered $75 billion in total capital investment through public-private partnerships.”
The letter to Congress is signed by public and private organizations from every state, including community development organizations; nonprofit service providers; banks and credit unions; state and national trade associations and chambers of commerce, including the American Bankers Association and other groups representing thousands of members; affordable housing organizations; schools, universities and education nonprofits; city governments, state and local elected officials and agencies; and many other businesses, ranging from very large businesses to small, family owned businesses.
U.S. Department of the Treasury data indicates more than 72 percent of NMTC activity is in severely distressed communities with unemployment rates at least 1.5 times the national average or with poverty rates of at least 30 percent. In FY 2016 alone, the CDFI Fund, which operates the program at Treasury, reported that the NMTC delivered $3.16 billion in financing to 530 businesses, community facilities, and economic revitalization projects. Communities put the capital to work, creating nearly 11,000 permanent jobs and almost 27,000 construction jobs in areas with high unemployment and poverty.
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Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management
Source: New Markets Tax Credit Coalition Reprinted with permission from RISMedia. ©2017. All rights reserved.
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