Both Parties Embrace the NMTC for Rural Areas
Democratic Platform Supports the NMTC
On Monday, July 25th, delegates at the Democratic National Convention approved a party platform that included several proposals to protect and expand the New Markets Tax Credit:
- Ending Poverty and Investing in Communities Left Behind: “We will expand and make permanent the New Markets Tax Credit.”
- Building Strong Cities and Metro Areas: “We will support entrepreneurship and small business growth in cities by providing mentoring and training to entrepreneurs and small business owners in underserved communities as well as expanding federal funding for the New Markets Tax Credit, community development financial institutions, and the State Small Business Credit Initiative.”
- Investing in Rural America: “We will expand access to equity capital for businesses and expand the New Markets Tax Credit to better serve rural small businesses.”
Republican Senator Proposes Doubling NMTC Allocation in 2017, 2018, and 2019
Both parties are increasingly looking at the NMTC to help jumpstart business development in rural areas. Earlier this month, Senator Cory Gardner (R-CO) introduced the Rebuilding and Renewing Rural America Act (S. 3243), a broad legislative package that – among other things – extends tax credits to rural communities and lessens the regulatory burden in rural areas.
The legislation calls for an increase in NMTC allocation in 2017, 2018, and 2019, from $3.6 billion to $7 billion. Earlier this year, CDFI Fund announced that they would combine the 2015 and 2016 rounds and award $7 billion in the fall of 2016, so Gardner’s legislation would provide a stable level of allocation over the next four years.
However, the bill would set-aside the additional $3.5 billion in NMTC allocation to organizations with a significant mission of serving, or providing investment capital for, rural renewal communities. Rural renewal community are defined in the bill as any low income community which has a population of at least 200 people but not more than 25,000 people and is not located in a metropolitan area of 200,000 or more, or which is entirely within an Indian reservation.
The NMTC statute – as amended in 2004 – requires that the CDFI Fund ensure non-metro counties get their fair share of NMTC investment. In 2014, the Coalition produced a report on the impact of the program in rural areas.
More information on rural investments: