WASHINGTON, Feb. 13, 2018 /PRNewswire-USNewswire/ -- The U.S. Department of the Treasury's CDFI Fund announced the Calendar Year 2017 New Markets Tax Credit (NMTC) allocation awards today. The CDFI Fund awarded $3.5 billion to 73 Community Development Entities (CDEs) from around the country.
"The federal New Markets Tax Credit is a unique and flexible community development tool with a successful track record, attracting investment capital and boosting economic activity in low-income areas," said Bob Rapoza, spokesman for the NMTC Coalition. "In fact, the NMTC has leveraged an unprecedented level of investment to low-income communities—generating about $82 billion in total capital investment through public-private partnerships that created more than one million jobs."
The CDFI Fund indicated 230 CDEs applied for allocations for a total demand of nearly $16.2 billion in credits. Only 73 applications were successful (31.7 percent), receiving $3.5 billion—an amount that only meets a fraction of the demand.
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. The NMTC works by providing a shallow federal tax credit of 39 percent, taken over seven years, for investments made in census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. Moreover, a recent independent report commissioned by the CDFI Fund to evaluate the operation and outcomes of the NMTC program found that CDEs are meeting and generally exceeding NMTC Program requirements.
Between 2003 and 2015 the NMTC financed over 5,000 projects, including nearly 2,000 community services and facilities, such as hospitals, schools, daycare centers and non-profit service providers – all in areas that weren't able to provide access to residents before NMTC was invested. As a result, the 17 million patients served by NMTC-financed healthcare projects to the nearly 250,000 students and children attending NMTC-financed schools or receiving care in early childhood learning centers.
The NMTC was most recently provided a five-year authorization in The PATH Act. (P.L. 114-113) in December 2015. There is currently legislation in Congress aimed at making the NMTC permanent, The New Markets Tax Credit Extension Act of 2017, H.R. 1098 in the House and S. 384 in the Senate. There are presently 13 Senators signed on in support of S. 384, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). H.R. 1098 has over 90 cosponsors, led by Reps. Tom Reed (R-NY), and Richard E. Neal (D-MA), who is the Ranking Member on the Ways and Means Committee.
"The NMTC is a great deal for the federal government, generating eight dollars in tax revenue for every dollar in credits. But, most importantly, the NMTC is a critical tool for our country's small, overlooked rural towns and blighted urban neighborhoods that have been left outside of the economic mainstream for far too long," said Rapoza.
For examples of how the NMTC is making an impact in each state, see the NMTC Coalition's NMTC at Work in Communities report or check out its Project Profile Map.
Contact: Bob Rapoza
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SOURCE New Markets Tax Credit Coalition