Multitude of Organizations Urge Congress to Save Soon-to-Expire NMTC

Nearly 1,000 businesses, investors and organizations call on Congress to expand and make the community and economic development tax credit permanent

WASHINGTON, November 20, 2019 – Today, the New Markets Tax Credit (NMTC) Coalition sent a letter addressed to Congressional leadership, the House Ways and Means Committee and its Chairman, Richard Neal (D-MA), as well as to the Senate Finance Committee and its Chairman, Chuck Grassley (R-IA). The letter urges the permanent extension and expansion of the New Markets Tax Credit (NMTC), along the lines of the bipartisan New Markets Tax Credit Extension Act (H.R. 1680 S. 750).

Nearly 1,000 signatures came from banks and credit unions; nonprofits such as Habitat for Humanity chapters, YMCAs, Boys & Girls Clubs,  food banks and heath care clinics; businesses, ranging from very large businesses to small, family-owned operations; city governments; state and local elected officials and agencies; and associations that represent thousands of members.

“As the New Markets Tax Credit nears its expiration at the end of 2019, we hope Members will take note of its broad support,” said Kermit Billups, President of the NMTC Coalition and EVP, Co-Founder at Greenline Ventures. “The letter was signed by nearly a thousand organizations, representing all 50 states, Washington, D.C. and Puerto Rico, and located in every type of community, from rural areas to urban neighborhoods, and everywhere in between. Why? Because they have seen firsthand the success of NMTC in revitalizing communities, creating jobs, increasing economic opportunity and improving lives.”

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 was most recently provided a five-year authorization in The PATH Act. (P.L. 114-113) in December 2015. There is great bipartisan support for NMTC in Congress:  32 Senators signed on in support of S. 750, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD); in the House, H.R. 1680 has 109 cosponsors, led by Reps. Terri Sewell (D-AL), Tom Reed (R-NY), and 24 members on the Ways and Means Committee.

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. Last year, more than 80 percent of all NMTC investments were in communities exhibiting severe economic distress with extremely low-incomes, high unemployment, or high poverty. Over the past 15 years, communities have come to count on the NMTC as a source of low-cost capital for challenging projects that would not have been possible but-for the NMTC. Since 2003, the Credit has delivered well over $100 billion in flexible capital to farming towns and urban neighborhoods left outside the economic mainstream.

“Despite an exemplary track record in revitalizing some of the poorest communities in our country, financing over 6,000 businesses, hospitals, daycare facilities, and manufacturing expansions and creating some one million plus jobs, the future of the NMTC is in jeopardy ,”  said Bob Rapoza, spokesperson for the NMTC Coalition.  “Without an NMTC extension, many of America’s urban neighborhoods and rural communities, struggling with high rates of poverty and unemployment, will lose access to billions of dollars for high-impact, community revitalization projects. No other the federal tax incentive is generally available to economically distressed rural and urban communities to promote economic revitalization making a permanent extension and expansion of the New Markets Tax Credit vital.” 

For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s 2019 NMTC Progress Report, State Impact Map or check out its Project Database.

Contact: Ayrianne Parks
[email protected] 
(202) 393-5225

The Letter

November 20, 2019,

Speaker Pelosi, Leader McConnell, Leader McCarthy, Leader Schumer, Chairman Neal, Chairman Grassley, Ranking Member Brady, and Ranking Member Wyden:

The New Markets Tax Credit (NMTC) expires at the end of 2019. We write to urge you to provide a permanent extension and expansion of the NMTC along the lines of the bipartisan New Markets Tax Credit Extension Act (H.R. 1680 and S. 750).

The NMTC is an important source of financing for businesses and community facilities in America’s most economically distressed rural and urban communities. Over the past 15 years, communities have come to count on the NMTC as a source of low-cost capital for challenging projects that would not have been possible but-for the NMTC. Since 2003, the Credit has delivered well over $100 billion in flexible capital to farming towns and urban neighborhoods left outside the economic mainstream. Those investments have generated over one million jobs at a cost to the federal government of less than $20,000 per job.

Without an NMTC extension, many of America’s urban neighborhoods and rural communities, struggling with high rates of poverty and unemployment, will lose access to billions of dollars for high-impact, community revitalization projects. For these reasons, we urge Congress to provide a permanent extension and expansion of the New Markets Tax Credit.

Signed,

Testimonials about the NMTC from signatories

Anthony Jones, President/Chief Executive, Bright Community Trust, Clearwater, FL

The NMTC is one of the few tools we have available that incentivize the private market to strengthen our cities and lift neighborhoods to their full potential.

Joseph Flynn, SVP Community Development, WesBanco CDC, Wheeling, WV

In addition to other areas in our service area, NMTC enables us to bring much-needed capital at favorable interest rate to small businesses in highly distressed, underserved, and rural areas.

Barbara Callaghan, SVP, First Security Bank of Missoula, Missoula, MT

We just used a $12 million NMTC allocation to finance the building of a Domestic and Sexual Violence Shelter and homeless shelter for families. This would not have happened – at least at the capacity that it did – without NMTCs. Numerous women, men, and children will be safe and off the streets in Missoula because of this project.

William Sutherland, President, TransPecos Development Corp, San Antonio, TX

It means that 7 mental health centers in rural Texas towns will get substantial funding to expand their currently underfunded mission.

Echo Bergquist, The Unity Council, Oakland, CA

It is a crucial source of funding to help stop commercial displacement in the vibrant neighborhood of Oakland whose population we serve.

Kathy Kottaridis, Executive Director, Historic Boston Inc., Boston, MA

The New Markets Tax Credit has helped our organization rehabilitate historic buildings for new uses, properties that have been vacant and distressed yet meaningful historically and useable for contemporary needs of Bostonians.

Jaene Miranda, President & CEO, Boys & Girls Clubs of Palm Beach County, West Palm Beach, FL

Thanks to the NMTC we will be able to provide a career readiness center for thousands of youth in the Belle Glade, Florida community – giving hope for a brighter future.

Ted Wysocki, CEO, Institute of Cultural Affairs, Chicago, IL

Our Chicago Land-marked building provides affordable space to 20+ non-profit tenants who serve over 1,000 low-income individuals weekly. NMTC will enable us to restore our vintage building and increase its energy efficiency for years to come in assuring our community’s diversity.

Walter Graff, Senior Vice President, Appalachian Mountain Club, Boston, MA

The NMTC has been instrumental in helping us build a sustainable nature-based tourism operation in Northern Maine as well as providing jobs for a natural resource based economy. Without NMTC we would not have been able to promote a sustainable economy in a region facing economic decline and young people flight. Creating a nature based tourism operation, providing new opportunities for outdoor recreation, environmental education and sustainable forestry is developing a new model for rural economic recovery. It would not have happened without the NMTC program.

Ed Lee, President & CEO, Habitat for Humanity of Greater Cincinnati, Cincinnati, OH

We are facing an affordable housing crisis across the USA. 1 in 6 families are paying more than 50% of their monthly income on housing costs. This is unacceptable. NMTC’s enable developers and community development organizations to make investments in affordable housing in markets where it is needed most to provide affordable workforce housing in proximity to employment opportunities.

Randy Shaffer, CEO/Superintendent, Trinity Basin Preparatory, Grand Prairie, TX

The NMTC program saves us valuable dollars so that we can put more money in the classroom for our predominantly minority, high poverty students. The program is vital and I respectfully request that you extend this wonderful program.

Richard Miles, Co-founder, Cade Museum for Creativity and Invention, Gainesville, FL

Without the NMTC program, we would not have been able to complete the last mile of funding for building the Cade Museum for Creativity and Invention. The investment not only resulted in an award winning architectural masterpiece, it also resulted in a complete transformation of a blighted, dangerous and heavily contaminated parcel of land into Gainesville’s crown jewel. A forgotten crossroads is now one of the most popular and beautiful destinations in Gainesville.

Brendan Leonard, CFO, Greater Burlington YMCA, Burlington, VT

The NMTC program was critical to our success in building a new YMCA building to serve our community. Our new building, which will open Jan 1, 2020, will enable us to serve our community much better, supporting a variety of programs and serving many more members than we could before. The NMTC program allowed us to build our new facility. Our new facility will enable us to survive as an organization.

Jeffrey Monge, Managing Partner, Monge Capital, Newark, NJ

The NMTC programs help create sustainable social and economic impact for communities representative of the community I was born and raised in the Bronx. Also, it is a unique opportunity for MBE firms like mine to “do good and well” based on our knowledge of the industry and our knowledge of the markets we serve.

Cindy Ruminer, Director, Oklahoma Small Business Development Center, Durant, OK

The NMTC program provides the much-needed capital for companies to grow and expand while creating employment opportunities in rural areas across the US. The NMTC program has provided the critical financing needed to increase operations and provide start-up opportunities to over 70% of our OSBDC clients.

Saurabh Narain, President and CEO, National Community Investment Fund, Chicago, IL

This is one of the most important programs for NCIF as a CDFI and an Impact Investor. From our perspective, there are three key levels of impact: 1. Transactional Impact – the program helps creates and retains jobs, increases the availability of goods and services, healthy foods and financial and social services to underserved markets nationally. NCIF has invested about $275 million in these communities creating about 11,000 jobs. Many of our transactions are catalytic in nature i.e. they help spur other developments in housing, healthcare, education and small business development, all of which add jobs and create economic opportunities. 2. Institutional Impact – as part of NCIF’s strategy, we work with our large network of CDFI and Minority Banks (NCIF is the largest investor in the sector) that act as anchors in these communities. Thus the transactional impact is amplified and creates long term sustainable communities. 3. Knowledge Impact: We have tried to simplify the deployment of the NMTC to help organizations maximize the subsidy given to the borrowers. This helps in accelerating development in some of the most distressed markets nationally.

Laurel Robinson, President/CEO, Housing Center of the Palm Beaches, West Palm Beach, FL

An opportunity to bridge the funding gap that is universally present in projects that utilize some manner of public funding.

Charlotte Tollefson, Administrator, Woodlawn Community Academy, Clearwater, FL

As a private school that offers individualized education to many special needs students, these dollars allowed us to grow our school so that we could meet the needs of many more handicapped students.

Brian Sonderman, Executive Director, Milwaukee Habitat for Humanity, Milwaukee, WI

Milwaukee Habitat for Humanity participated in two NMTC transactions (2012 and 2018). The funds we received helped leverage millions of dollars of additional private investment to that we could build safe, affordable homes for low to moderate income families in some of Milwaukee’s most distressed neighborhoods. Without the NMTC we would be unable to serve as many hard working Milwaukee families who want to achieve the American dream of homeownership. Please support the extension of the NMTC for Robin, a single mom who became a Habitat homeowner because of the NMTC. For Robin, homeownership is going to mean finally having a safe, stable place where her three girls can call home.Their family is currently sharing a cramped two-bedroom apartment with Robin’s 80 year old grandmother in Milwaukee’sNorthlawn housing development. Every time it rains, Robin says, the ceiling leaks right down into their home. Both Robin and her oldest daughter have asthma, which she said got worse when they moved into her grandma’s rental. “My grandma has been living there since we were little,” says Robin, “And over the years, the landlords won’t fix a thing, even though the ren t keeps going up.” This and other experiences with neglectful landlords made Robin want a home of her own. She wanted to give her children a home with enough space for the whole family without having to worry about water streaming in every time it rained. Robin moved into her new Habitat home on October 31, 2019.

Adrienne White, VP Strategy, Citizens Trust Bank, Atlanta, GA

In volunteer capacities, I’ve been the position to help manage the financial aspects of projects that provided educational benefit & jobs to the community. These projects would not have been possible in the same time frame without NMTC funding.
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