On April 26, 2012, the House Select Revenue Subcommittee held a members hearing on the tax extenders. As we reported earlier, several members of Congress expressed their support for the New Markets Tax Credit. [Video]
The New Markets Tax Credit Coalition, along with several members of the Coalition, submitted written testimony to the committee. Below, find copies of testimony from:
Reps. Pat Tiberi (R-OH), Jim Gerlach (R-PA), Erik Paulsen (R-MN), Richard Neal (D-MA), Jim Costa (D-CA), and John Larson (D-CT) urged extension of the New Markets Tax Credit
At the behest of Reps. Pat Tiberi (R-OH) and Richard Neal (D-MA), the House Select Revenue Subcommittee of Ways and Means held a Members hearing on Thursday, April 26, 2012 to review dozens of tax provisinos that either expired last year or expire this year. The hearing provided a formal opportunity for the Subcommittee to hear from House colleagues about the merits of extending – or not extending – many of the tax extenders. The Senate Finance Committee held a similar hearing in February.
Six members of the Ways and Means Committee – including three Republicans and three Democrats – were effusive in their praise of the New Markets Tax Credit in their written and/or oral statements. In fact, New Markets was one of the more popular credits examined during the hearing. For example, Rep. Jim Gerlach (R-PA), said that the New Markets Tax Credit has “a proven track record of creating jobs, spurring investment and enhancing the quality of life.”
This hearing was important step forward for extension of the NMTC.
In Cedar Rapids, Iowa, the New Markets Tax Credit helped finance a new dental clinic at His Hands Free Medical Clinic.
Reps. Tiberi (R-OH) and Camp (R-MI) plan to hold a hearing to review individual tax extenders (including the New Markets Tax Credit) in April. The Hill has a story, and you can read their release below:
Camp, Tiberi: Review of “Extenders” to Start in April
Washington, DC – Today, Ways and Means Committee Chairman Dave Camp (R-MI) and Select Revenue Measures Subcommittee Chairman Pat Tiberi (R-OH) issued the following statement:“Far too many provisions in the tax code are temporary, making it hard for employers to plan, invest and create new jobs for American families. That is one reason why we are committed to comprehensive tax reform. An important part of comprehensive reform is to conduct a thorough review of the various targeted provisions in the Code commonly referred to as ‘tax extenders.’ In 2010, House Republicans led the charge to review these provisions and over 70 (estimated at over $100 billion) were cleaned out of the Code. In 2012, we must again examine these extenders, and the Committee will begin that process after the April recess. We look forward to hearing from interested parties about the merits of these tax policies.”
NOTE: The exact date, time, and format of a tax extender hearing has not yet been set and will be formally announced by the Committee at a future date. However, Chairmen Camp and Tiberi expect the date will be in April.
Yesterday, Senators Reid (D-NV), McConnell (R-KY), and Baucus (D-MT) engaged in a colloquy on the Senate floor where they expressed their support for action on the tax extenders. Senator Hatch (R-UT) also asked for written comments to be appended to the record. The friendly exchange followed a rare moment of bipartisan comity with the passage of the surface transportation bill (S. 1813) by a substantial margin of 74-22. On Tuesday, tax extender provisions were included in several amendments to the bill, but those amendments were ultimately voted down.
SAVE THE DATE: The Annual NMTC Policy Conference is June 6, 2012 in Washington DC.
Not a member of the New Markets Tax Credit Coalition? Join today!
By Bob Rapoza
In Doug Guthrie’s recent Forbes column on the LITHTC, For the 21st Century, a Network of Beneficial Philanthropy and Corporate Citizenship he mentions in passing that the New Markets Tax Credit (NMTC) has “failed to stimulate growth in the areas [it] have targeted.” Those conclusions are at odds with the facts.
Since 2003, New Markets has attracted over $30 billion in private investment in low-income businesses and created over 300,000 jobs nationwide. In 2010 alone, NMTC financing created some 70,000 jobs in some of the most economically distressed communities in the country. We would hardly call that a failure. The credit leverages $12 in private sector funding for every dollar in lost federal tax revenue (a great deal for taxpayers) and it was named one of the top 25 government programs by Harvard’s Kennedy School. If permanently authorized (like the LIHTC), there is no telling what this credit could accomplish.
The Credit was created to address a persistent problem in distressed areas: while there are many attractive business opportunities, the cost and scarcity of capital in these ‘New Markets’ is a substantial impediment to spurring economic growth. The NMTC helps to ease the flow of private sector investments into these communities. These investments often serve as the lynchpin for neighborhood revitalization and they would not be possible without the Credit. In fact, a 2010 GAO report found that 90% of NMTC projects were dependent on NMTC financing and would not have happened otherwise.
Guthrie was right to laud the LIHTC, which creates a cross-sector ecosystem of community stakeholders, but the same can be said of New Markets. The NMTC built upon and strengthened a delivery system of private for-profit and non-profit intermediaries that provide technical and financial assistance to economically distressed urban and rural communities. NMTC deals usually involve a diverse set of stakeholders, including historic preservationists, financial institutions, nonprofits, CDCs, CDFIs, local elected officials, small businesses, and large manufacturers.