NMTC Coalition Releases 2019 NMTC Progress Report

The 15th edition of the NMTC Progress Report shows the NMTC continues to grow businesses and create jobs in rural and urban communities left outside the economic mainstream. 

FOR IMMEDIATE RELEASE — WASHINGTON, D.C. (July 18, 2019) —The New Markets Tax Credit Coalition today released its 2019 New Markets Tax Credit (NMTC) Progress Report, the fifteenth edition of the report—providing analysis of NMTC activities in 2018. The report documents the importance of the NMTC in providing patient, flexible capital to businesses and projects located in distressed rural and urban communities, thereby  creating  jobs and growing business opportunities. The NMTC financing ranges from more traditional industry and community sectors to new and cutting-edge technology. Projects and businesses that benefited from the Credit in the past year include manufacturing, healthcare, schools and many supporting childcare, youth, and families.  

“The Coalition’s annual survey asks CDEs to report on the deployment of their allocation, investor trends, and a variety of community impact metrics,” said Coalition spokesperson Bob Rapoza. “The findings clearly demonstrate that the NMTC continues to deliver capital to the communities left behind by the changing economy, with nearly 80 percent of the activity in severely distressed U.S. census tracts in the last year—far exceeding statutory requirements. Moreover, the Credit is delivering a significant ‘bang for the buck’ for taxpayers in terms of the jobs, amenities, community facilities, and tax revenue.”   

The report was prepared for the NMTC Coalition, a national membership organization of Community Development Entities (CDEs) and investors organized to advocate on behalf of the NMTC. Every year since 2005, the NMTC Coalition surveys CDEs on their work delivering billions of dollars to businesses, creating jobs, and rejuvenating the parts of the country that have been left behind. The annual NMTC Progress Report presents the findings of the CDE survey and provides policymakers and practitioners with the latest trends and successes of the NMTC.

The 2019 Progress Report

Seventy-four CDEs participated in the 2019 survey and provided data on their progress raising capital, lending, and investing in 2018 with the NMTC. The survey findings show that competition for credits continues to drive gains in efficiency.  The data collected shows that CDEs used $3.2 billion in NMTC allocation in 2018 to financed 286 NMTC projects, amounting to $6.1 billion in total project investment to low-income communities. This financing resulted in the creation of 58,360 total jobs including 32,917 permanent full-time-equivalent jobs and 25,443 construction jobs.

“Year after year, the data shows the NMTC not only delivers an unprecedented level of capital to low-income rural and urban communities, but it creates much-needed jobs—helping individuals and families thrive and, in turn, grows those local economies where they live and work. In fact, since 2003 the NMTC has created over one million jobs,” Rapoza adds.

Across 48 states and territories, CDEs rehabilitated or constructed 18.9 million square feet of space in 2018, thanks to NMTC financing. NMTC financing supported 193 manufacturing and industrial businesses with loans for working capital, new equipment, and 6.7 million sq. ft. of new space, often through incubators and multi-business facilities, creating over 12,000 manufacturing jobs.

Furthermore, there were four million people served by NMTC-financed community facilities including 445,000 patients in healthcare facilities and 460,000 children. Sixty-six percent of mixed use (?) projects included at least one community facility, nonprofit, or social service component. Those new community resources add up to 249 nonprofits facilities, health centers, childcare centers, libraries, community centers, and other community facilities.  The report profiles NMTC financed businesses, including a rural apparel manufacturer in Pagosa Springs, CO, a new Educare facility in Springfield, MA, and a Boys and Girls Club in Manatee County, FL, and it describes the impact of the NMTC in native communities in 2018.

Rapoza notes, “The authorization for the NMTC expires this year. This report is further proof that the Credit is working and Congress should expand and make the NMTC permanent.”

There is currently legislation in Congress aimed at making the NMTC permanent, The NMTC Extension Act of 2019, H.R. 1680 in the House and S. 750 in the Senate. There are presently 30 Senators signed on in support of S. 750, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). H.R. 1680 has 91 cosponsors, and is led by Reps. Terri Sewell (D-AL) and Tom Reed (R-NY).


About New Markets Tax Credit Program The New Markets Tax Credit was enacted in 2000 in the Community Renewal Tax Relief Act (P.L.106-554) in an effort to stimulate private investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. The NMTC is a 39 percent federal tax credit, taken over seven years, on investments made in economically distressed communities. More than $95 billion in capital has been put to work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico.

Treasury’s CDFI Fund Announces 2018 NMTC Awards

WASHINGTON, D.C. (May 23, 2019)– The U.S. Department of the Treasury’s CDFI Fund announced the Calendar Year 2018 New Markets Tax Credit (NMTC) allocation awards today. The CDFI Fund awarded $3.5 billion to 73 Community Development Entities (CDEs) from 35 states, Puerto Rico, and the District of Columbia.

“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 over $90 billion in total capital investment through public-private partnerships that created more than one million jobs.”

The CDFI Fund indicated 214 CDEs applied for allocations for a total demand of nearly $14.8 billion in credits. With 73 successful applications (34 percent) receiving $3.5 billion, meaning  the availability of credits 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 provides a shallow federal tax credit of 39 percent, taken over seven years, for investments 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. However, 75 percent of NMTC activity is in the poorest rural and urban communities in America, characterized by poverty of at least 30 percent and unemployment rates 1.5 times that the national average . 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.

To date, the NMTC financed about 6,000 projects, including more than 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 have been treated in NMTC-financed healthcare projects, and nearly 250,000 students and children attend NMTC-financed schools or receive 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 NMTC Extension Act of 2019, H.R. 1680 in the House and S. 750 in the Senate. There are presently 20 Senators signed on in support of S. 750, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). H.R. 1680 has 75 cosponsors, led by Reps. Terri Sewell (D-AL) and Tom Reed (R-NY).

“The NMTC is a great deal for the federal government, leveraging  eight dollars in other investments in communities  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. One-fifth of the 2018 awards will be made in rural communities, with $682 million in NMTC investments going to revitalize non-metropolitan counties,” 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.

New Markets Tax Credit Coalition Hosts April 2019 Fly-in, Congressional Briefing

Yesterday, on April 9th, the nation’s leading community development entities met with nearly one hundred Members of Congress and their staffs to discuss the advancement of bills introduced in the House and Senate in February  that  make permanent and expand the New Markets Tax Credit. The fly-in, hosted by the New Markets Tax Credit Coalition, included a briefing with keynotes from the House bill’s lead sponsors, Reps. Terri Sewell (D-AL) and Tom Reed (R-NY), and remarks by Reps. Jason Smith (R-MO) and TJ Cox (D-CA). The special gathering of legislators, congressional staff and NMTC practitioners from across the country was held in the House Ways and Means Committee Room. “There are issues in Washington that are truly bipartisan, especially around efforts to spur revitalization in economically distress areas, so I’m a proponent of the New Markets Tax Credit,” said Rep. Sewell. “In my district, the NMTC has really made a big impact. I’m confident that when my colleagues realize all the benefits of the program, we will pass this legislation overwhelmingly.” ”We’ve seen the New Markets Tax Credit deployed across the country,” said Rep. Reed. “The NMTC is a policy that has broad bipartisan support. It is a tool in the toolbox that is changing communities. It’s all happening with the NMTC.”
NMTC practitioners presenting on their work. (L to R: Joe Summers, Urban Action Community Development; Pat Sluder, MassDevelopment; Bill Dana, Central Bank of Kansas City; Aisha Benson, TruFund Financial Services; and Kermit Billups, NMTC Coalition President)
Additional speakers at the briefing included Kermit Billups, Chair of the NMTC Coalition Board and Executive Vice President of Greenline Ventures, emcee and panelists Aisha Benson, Executive Vice President, TruFund Financial Services; Bill Dana, President and CEO, Central Bank Of Kansas City; Pat Sluder, Vice President, MassDevelopment; and Joe Summers, Vice President, Urban Action Community Development. Following the panel of NMTC practitioners, Rep. Jason Smith (R-M) also addressed the briefing attendees.
(L to R) Reps. Sewell (D-Ala.), Smith (R-Mo.) and Reed (R-N.Y.) talk about their support for the New Markets Tax Credit during a recent industry coalition visit to Capitol Hill.
“I’m a huge supporter of the New Markets Tax Credit,” said Rep. Smith. “A lot of rural areas have persistent poverty, and the NMTC is a great program for us in helping them.” Established in 2000, in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to drive 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. As Congress and the Administration continue discussions around tax extender provisions post tax reform, organizations, businesses and communities that have seen the positive impact of the NMTC have increasingly urged Congress to make the credit a permanent part of the tax code. “Last Congress, over 125 members of Congress from both parties cosponsored NMTC extension legislation. The strong support of the New Markets Tax Credit was a direct result of the tangible impact it makes in distressed rural and urban communities that have been left outside the economic mainstream,” said Bob Rapoza, spokesperson for the NMTC Coalition. “The NMTC has generated over 1,000,000 jobs and delivered $90 billion in total capital investment through public-private partnerships. However, without legislative action, this effective tool for community revitalization will expire December 31st.” A majority of the members of the House Ways and Means Committee cosponsored NMTC extension legislation last session, and the new bill starts off with support from 20 members of the powerful tax-writing committee. U.S. Department of the Treasury data indicates that 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 2018 alone, the CDFI Fund, which administers the program at the Treasury, reported that the NMTC delivered nearly $4 billion in financing to 680 businesses, community facilities and economic revitalization projects. Communities put the capital to work, creating nearly 9,500 permanent jobs and almost 30,000 construction jobs in areas with high unemployment and poverty rates. 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.

Lawmakers, Community Development Leaders Gather in Washington, D.C. to Discuss Tax Policy Trends and Plans for 2019

Coalition gathers NMTC stakeholders for a policy conference, releases new state statistics

WASHINGTON, D.C. (December 18, 2018) — The New Markets Tax Credit (NMTC) Coalition held its Annual Conference on December 12 and 13 in Washington, D.C. The event featured members of Congress as keynote speakers, and panels on timely community development matters. Attendees were also provided with insights from the Treasury Department and the release of updated state statistics on NMTC efficacy.

NMTC Coalition President Kermit Billups opened the conference, welcoming speakers and guests. The experienced NMTC practitioner and Greenline Ventures EVP highlighted recent successes and looked to the future of the NMTC Coalition. Keynote speakers at the conference included U.S. Reps. Terri Sewell (D-Ala.) and Tom Reed (R-N.Y.). Both indicated their desire to work with House colleagues to see the NMTC not only extended, but made permanent and expanded.

“We have seen firsthand the impact the New Markets Tax Credit program has had here in New York and want to ensure it has a fair shot at continuing to boost jobs in our community,” Congressman Reed said. “While the economy continues to grow, small businesses – the lifeblood of our economy – still struggle to secure the capital needed to spur revitalization.”

“The New Markets Tax Credit helps create a better environment for businesses and transformative projects to thrive – boosting wages, services and economic development where it’s needed most,” Reed concluded.

A legislative outlook panel was led by moderator Bob Rapoza, NMTC Coalition spokesman, and included key congressional staff. Many attendees headed to congressional visits that afternoon, followed by a reception in the Kennedy Caucus Room where they were addressed by Senators Ben Cardin (D-Md.) and Rob Portman (R-Ohio), Senate NMTC Extension Act cosponsors and Senate Finance Committee members, who discussed NMTC impact and the future of tax policy.

Sen. Cardin said, “In Maryland, the New Markets Tax Credit has been deployed on a diverse range of infrastructure and community development efforts, from affordable housing, to health clinics, to community centers. Since 2003, the credit has resulted in billions of dollars in investment across the state and created over 34,000 jobs. It is time to make this incredibly valuable program permanent.”

Senator Rob Portman added, “Pro-growth federal policies are helping grow our economy and strengthen our communities. More than ever, we need to continue support for programs like the New Markets Tax Credit that spur investment in areas that truly need it and help create new industry, infrastructure, and jobs for cities and towns across the U.S. that have felt left behind. I’ve seen the results that these tax credits can have on our communities. Last year in Ohio, $280 million in New Markets Tax Credit financing generated a total of $462 million in public-private project investment for 29 projects in the state. Our local communities depend on these tax incentives for projects that transform our communities, create jobs, and make a real difference in peoples’ lives, and I’ll continue fighting to make them permanent.”

The final keynote of the conference came from Community Development Financial Institutions (CDFI) Fund Director Annie Donovan. At the close of her remarks, Donovan announced her departure from the CDFI Fund. During her five years as director, Donovan oversaw tremendous growth in the agency’s funding and programming and the largest ever CDFI and NMTC program award rounds. Integrating more data into policy-making was a top priority for Donovan.

Panels during the conference also included NMTC board and leadership, economic development experts and Treasury Department professionals. Those discussions focused on Opportunity Zones, NMTC investor prospects, NMTC financing disaster relief, and the latest insights from the Treasury Department.

“Since its inception, the New Markets Tax Credit has financed more than 5,000 projects and created over one million jobs,” said Bob Rapoza. “The conference provides practitioners with opportunities to discuss ways to build upon its success, helping low-income rural and urban communities access the capital necessary to grow local economies, expand business opportunities, update worn infrastructure, and make needed services like healthcare, education and childcare available to individuals and families living in distressed areas.”

Helping Beyond Thanksgiving: Investing in the Revitalization of Low-Income Communities

Thanksgiving is a time to gather with friends and family, a time to reflect on our privileges and the past year’s accomplishments and—most of us—also look forward to enjoying a big, festive meal.  Whether you host or travel to a loved one’s homes, many Americans will spend this Thursday gathered around a table, enjoying the comfort of a warm home and delicious food, and maybe even watching some football that afternoon. For those people living in poverty, struggling with homelessness, those affected by devastating natural disasters, or those without access to affordable, healthy food, the holiday can be quite a different experience.
L.A. Prep is a New Markets Tax Credit (NMTC) financed project in Los Angeles that will serve as an incubator for 50 small- to medium-sized food producers who have outgrown their startup spaces. The anchor tenant of the project is L.A. Kitchen, which is a commercial kitchen and produce processing hub that prepares meals and nutritious snacks for seniors and low‐income families.
According to the U.S. Department of Agriculture (USDA) Economic Research Service (ERS), “data from the latest census (2000), about 23.5 million people, or 8.4 percent of the U.S. population, live in low-income neighborhoods that are more than a mile from a supermarket. Low-income neighborhoods are areas where more than 40 percent of the population has income less than or equal to 200 percent of the Federal poverty threshold ($44,000 per year for a family of four in 2008).” A 2017 ERS report also found that “11.8 percent of American households were food insecure at least some time during the year in 2017, meaning they lacked access to enough food for an active, healthy life for all household members.” However, that number may be higher, depending on where you live. The January 2017 Point-in-Time count from the HUD Annual Homeless Assessment Report found that there are 553,742 people experiencing homelessness in the United States. Hundreds are without homes after the camp fire in California, and thousands are still dealing with hurricane damage from this year and last year. Many of us volunteer on Thanksgiving, serving food to individuals and families in need. But how can we help those less fortunate beyond a few hours spent volunteering on Thanksgiving? This is an issue central to the field of community and economic development. Since being implemented, the New Markets Tax Credit has been used across the country to help improve many of these challenges through the financing of food banks, grocery stores located in food deserts, homeless shelters and other community facilities that serve communities and people in need. Since 2003, the NMTC has financed 276 of grocery stores, farmers’ markets, food delivery services, food banks, and other projects expanding access to food in underserved areas. NMTC practitioners like Habitat for Humanity, LISC, Greenline Ventures and many others in our community have been key in helping families repair and rebuild homes after hurricanes or providing financing to organizations like the Houston Food Bank and North Dallas Food Bank, which provided direct assistance to the families and communities affected by the unprecedented flooding and destruction of Hurricane Harvey and Irma. If we want to help, we need to get to the root of the problem and invest in programs that are focused on improving the lives of people and communities struggling with economic hardship. Helping organizations and businesses access the capital necessary to grow local businesses, expand community services and create good paying jobs is key and the NMTC has a strong record of accomplishing just that.

Let’s Ensure #InternetDay Keeps Getting People Connected

Post authored by NMTC Coalition Board Member Phil Glynn of Travois. Social media has given rise to many so-called “hashtag holidays” that spring up on Twitter, Facebook and Instagram each morning as we surf on our smartphones for news and updates from our friends. #NationalPizzaDay, #NationalSiblingsDay, #NoDirtyDishesDay. Many are entertaining, some are thought-provoking. Few, however, are critical. October 29th marks #InternetDay, and is among the exceptions. In just a few short decades, the internet has changed the way our communities interact and live, becoming an essential tool for education, healthcare and commerce. Many tech companies will take this opportunity to discuss new and emerging products and services they plan to bring to the market, but it’s also a day to consider those without access to broadband. And while most of our resources are being spent on the next generation of faster, more reliable digital access, many communities who still are waiting for the revolution to come to them. The Federal Communications Commission (FCC) 2018 report on Broadband found that approximately 14 million rural Americans and 1.2 million Americans living on Tribal lands still lack mobile LTE broadband at speeds of 10 Mbps/3 Mbps. One of the reasons for this divide is the expense of delivering such technology to rural and Tribal areas. Broadband supports more than just surfing the net. It is an important component of our healthcare delivery system. In remote areas with shortages in doctors and particularly specialists, broadband allows physicians and patients to consult with specialists through telemedicine. High-speed networks also help health professionals remotely monitor the vital signs of elderly or disabled patients living at home. Travois invests in housing, health care, education and infrastructure projects to create economic opportunity in Indian Country. In the tribal communities of Alaska, Travois worked to fill financing gaps in the development of phases of the Terrestrial for Every Region of Rural Alaska (TERRA) project. TERRA is a hybrid terrestrial fiber-optic and microwave network that removes the limitations of satellite and provides symmetrical broadband service to Alaska’s remote and rural regions. The TERRA network delivers critical bandwidth to numerous public, nonprofit and private entities such as regional health corporations, school districts, native organizations and residents. The build-out of the TERRA network is no small feat. Alaska is home to some of the most challenging geography in North America and regularly experiences unpredictable and unforgiving weather which can hamper construction. A majority of the communities that most need fast, reliable Internet are separated by vast distances and often can’t be reached by road. The TERRA projects have received key financing through the New Markets Tax Credit (NMTC). The NMTC was designed to increase the flow of capital to businesses and low income communities by providing a tax incentive to private investors. Over the last ten years, the NMTC has proven to be an effective, targeted and cost-efficient financing tool valued by businesses, communities and investors across the country. The NMTC program attracts capital to low income communities by providing private investors with a federal tax credit for investments made in businesses or economic development projects located in some of the most distressed communities in the nation – 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. Since its inception, NMTC investments have leveraged more than $80 billion in total capital investment to businesses and revitalization projects in communities with high rates of poverty and unemployment and has generated more than one million jobs. More importantly, the NMTC helps people in areas that are too often overlooked in favor of residents in more populous areas. Congress authorized the program as part of the bipartisan Community Renewal Tax Relief Act of 2000, and is funded through 2019. Without further action, however, the projects like TERRA have little chance ever coming to fruition. As we go online today, on #InternetDay, on our laptops, smartphones and tablets to read about the amazing things we can achieve through connectivity, let’s take a minute to consider those who still need to be brought into the fold, and how that can be achieved. Supporting more projects like TERRA, and preserving financing resources like the New Markets Tax Credit must be part of that thinking. Phil Glynn is president of Travois, headquartered in Kansas City, Mo., which provided funding to the TERRA project.

National Recovery Month: NMTC Financing Addiction Treatment in Under-Served Communities

September is National Recovery Month, which is sponsored by the Substance Abuse and Mental Health Services Administration (SAMHSA) to raise awareness of mental and substance abuse and celebrate recovery. The theme this year is Join the Voices for Recovery: Invest in Health, Home, Purpose, and Community. For the NMTC community, the focus on investment and community seems particularly applicable. The New Markets Tax Credit may not be the first financial tool that comes to mind for most, but it is in fact a resource that communities can use to help address the need for more treatment facilities.
Ribbon Cutting at Garlington Campus. Photo credit: Cascadia Behavioral Healthcare
There are a number of NMTC-financed addiction treatment centers around the country, which we have featured under the stories tab on the NMTC Coalition website. In addition to those facilities, the Cascadia Behavioral Healthcare’s Garlington Campus is the newest NMTC-financed addiction treatment facility. NMTC Coalition Board Member United Fund Advisors provided NMTC allocation for the project, which opened last Friday in Portland, Oregon. Cascadia describes the facility as “one of Oregon’s most innovative community-centered campuses – anchored by the new Garlington Health Center, which provides integrated health care services – mental health, substance use recovery, primary care, and wellness programs – all in one location to support a person’s whole health needs.” The project received $4.5 million in NMTC financing and includes a 24,000 square-foot clinic, providing mental health and addiction recovery services, primary care, neighborhood wellness programs, as well as 52 apartments. The drug addiction and overdose rate has soared historic levels, largely due to the opioid epidemic, which has ravaged communities and families living in small towns, urban cities, and everywhere in between. While there are many federal programs and other legislation aimed at specifically funding research and treatment, it is imperative that communities and leaders work together to use every resource available. The NMTC, with its flexibility and community-driven approach, can be a part of that equation, helping low-income, under-served areas build and deliver addiction and mental health services their communities’ currently lack.

Community Development Leaders Gathered in Washington, DC as Congress Decided Fate of NMTC in Tax Overhaul

NMTC Coalition Annual Conference attendees successfully pushed for the preservation of the largest federal incentive for investment in low-income communities

Last week, the New Markets Tax Credit (NMTC) Coalition  held its New Markets Tax Credit Annual Conference in Washington, D.C. The event featured a newly released report on the NMTC’s economic impact, keynotes from NMTC champions Senator Roy Blunt (R-MO) and Representative Tom Reed (R-NY), as well as remarks from the Treasury Department’s Community Development Financial Institutions (CDFI) Fund Director Annie Donovan and City of Dayton, Ohio Commissioner Christopher Shaw.
Keynote Speakers (from left to right): Rep. Reed, CDFI Fund Director Donovan, Sen. Blunt, Commissioner Shaw
The NMTC Coalition’s Board President Robert Davenport, emceed the event.  A longtime NMTC practitioner and past president of the National Development Council, he highlighted the important timing of this year’s annual conference with Congress working to reconcile their tax bills, including the NMTC. “This year’s conference came at a pivotal time for the NMTC community. The House tax bill was set to terminate the NMTC, while the Senate maintained the Credit’s current authorization for 2018 and 2019 that was provided in the PATH Act, which was passed in December 2015,” said Davenport. “The future of the NMTC—and the economically distressed rural and urban communities where it is invested—was hanging in the balance. Fortunately, the members of the conference committee understood the importance of the NMTC.” Panels included senior Treasury and CDFI Fund staff, experts on NMTC and the law, a session on the use of the NMTC in disaster recovery and rebuilding efforts, and an investor roundtable. There was also a session on new reports on the NMTC, including an independent report by Summit Consulting, LLC that was commissioned by the CDFI Fund and released in August, as well as the third edition of the NMTC Economic Impact Report that was released by the Coalition on December 8th.
Legislative outlook session with Bob Rapoza, Rapoza Associates; Beth Bell, Office of Sen. Cardin; and Will Davis, Office of Rep. Reed.
“Both of these recent reports on the NMTC clearly indicate that the credit is promoting economic revitalization in some of the poorest communities in America, far surpassing the statutory requirements. Further, the NMTC Economic Impact Report, which analyzed U.S. Department of Treasury data and survey data from 5,000 projects financed by the Credit, found that those NMTC investments created more than one million jobs and financed nearly 2,000 community services and facilities, including hospitals, schools, nonprofit service providers, and day care centers from 2003 to 2015,” said Bob Rapoza, spokesman for the Coalition. Attendees at the conference were provided time to head to Capitol Hill and meet with their legislators on the NMTC.  They shared examples of their work using the NMTC to attract private capital to distressed rural towns and blighted urban neighborhoods, generate economic activity, and create jobs and access to services needed by the communities where the credit is invested. On the final day of the conference, reports surfaced that the tax reform conferees had agreed to adopt the Senate’s position and preserve the NMTC. On Friday, December 15th, House Ways and Means Committee Chairman Kevin Brady released the final text of the Tax Cuts and Jobs Act, H.R. 1. The bill leaves the New Markets Tax Credit in place through 2019. The final text also repeals the Corporate Alternative Minimum Tax (AMT). The Senate-passed bill had included a corporate AMT rate of twenty percent, a proposal which would have created significant challenges for tax credits like the NMTC. Today, with a few technical changes incorporated, Congress will send the tax bill on to the President for his signature. “NMTC investments generated more than $156 billion in economic activity in low-income communities from 2003 to 2015, which results in more than enough federal income tax revenue to more than cover the cost of the Credit.  With that kind of track record, and a cost of just $1.7 billion over ten years, it was difficult to understand why the House proposed to terminate the New Markets Tax Credit in the first place. The NMTC is a great deal for the federal government, but most importantly it 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. We applaud the conference committee for their work to maintain the Senate’s position on the NMTC and maintain the credit’s authorization for 2018 and 2019, as was agreed to in the bipartisan PATH Act that Congress passed in December 2015,”said Rapoza.

New Markets Tax Credit Report Details Major Investment to America’s Struggling Rural and Urban Communities

Data shows the NMTC financed 5,000 projects created over one million jobs all while generating enough revenue to more than pay for its cost to the federal government

 Washington, D.C. – Today, the New Markets Tax Credit Coalition published a new report on the economic impact of the New Markets Tax Credit (NMTC) from 2003 to 2015. This is the third edition of the NMTC Economic Impact Report, which is authored by Rapoza Associates on behalf of the NMTC Coalition.  The report analyzed U.S. Department of Treasury data and survey data from 5,000 projects financed by the Credit. “The report documents the success of NMTC investments, which resulted in the creation of more than one million jobs , increased access to health and childcare facilities, created more  business opportunities, and new and improved manufacturing businesses. All are located in low-income communities and are clear evidence of the impact of the Credit in increasing economic opportunity and improving rural and urban communities across America” said Bob Rapoza, spokesman for the Coalition. Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the NMTC is the product of 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 private sector 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. Key findings from the report:
  1. From 2003 to 2015, NMTC investments generated more than $156 billion in economic activity, creating 1,013,837 jobs in low-income rural and urban communities, including 459,294 temporary construction jobs and 554,545 full-time equivalent jobs, in nearly every industry sector of the economy;
  2. The NMTC targets about 40 percent of the nation’s census tracts that meet the statutory requirements for economic distress. However, most NMTC financing goes to severely distressed communities that far exceed program requirements for poverty and income. From 2003 to 2015, 72 percent of NMTC projects were located in severely distressed communities;
  3. The federal tax revenue generated by NMTC investments more than pays for the cost of the program. For example, in 2015, the NMTC generated $15.2 billion in economic activity, and this activity generated $872 million in federal tax revenue, more than enough cover the $759 million annual cost of the program in 2015 and providing an annual return of $113 million, or 15 percent;
  4. By stabilizing and revitalizing local economies, the NMTC helps boost tax revenue for state and local governments. Between 2003 and 2015, NMTC investments generated $6.7 billion in state and local tax revenue, including $502 million in 2015 alone;
  5. The NMTC enhances community revitalization efforts by financing community facilities and other important quality of life amenities. Between 2003 and 2015, the NMTC financed nearly 2,000 community services and facilities, including hospitals, schools, nonprofit service providers, and day care centers;
  6. After more than a decade of investments, the NMTC has touched the lives of millions of individuals, from the 17 million patients served by NMTC-financed healthcare projects to the nearly 250,000 students and children attending NMTC-financed schools or cared-for in early-childhood learning centers; and
  7. Over the years, as the program has matured, NMTC financing has increasingly gone to rural communities, areas experiencing severe economic distress, for healthcare facilities and manufacturing businesses, as well as other locally driven projects.
The NMTC was most recently provided a five-year authorization in The PATH Act. (P.L. 114-113) in December 2015. However, the House of Representatives passed a tax reform bill, H.R. 1, which terminates the 2018 and 2019 authorizations.  In the version of HR 1 that passed the Senate, the NMTC authorization is maintained. House and Senate members are working in conference committee to reconcile difference in their bills. “No other the federal tax incentive is generally available to economically distressed rural and urban communities to promote economic revitalization,” Rapoza said.  “It is clear from this report that the NMTC is a critically important tool that promotes job growth and business opportunity in communities left outside the economic mainstream. And, itis a great deal in terms of federal investments.” A panel will be held at the NMTC Coalition’s Annual Conference on December 13th on this report and a report commissioned by the CDFI Fund that was released in August. Paul Anderson, the author of the NMTC Economic Impact Report will provide context on the report, its findings and its methodology.  For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities.   ###

New Treasury Data Analysis Confirms New Markets Tax Credit Generated Over One Million Jobs in America’s Most Distressed Rural and Urban Communities

Today, the New Markets Tax Credit (NMTC) Coalition provided an updated analysis of U.S. Department of Treasury data on the investment and creation of jobs in low-income communities nationwide. This data indicates that between 2003 and 2015, NMTC financing resulted in over one million jobs in low-income rural towns and urban neighborhoods—areas struggling with lagging economies and high rates of unemployment. The Coalition published new federal NMTC impact data by state on its website, which will be featured in a larger report on the economic impact of the credit that is to be released in December. Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the NMTC is the product 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 private sector 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. Between 2003 and 2015, $42 billion in NMTC investments leveraged over $80 billion in total investments. Further 72 percent of that NMTC activity was in highly distressed communities, which far exceed the programmatic requirements for development in economically distress areas. “This new Treasury data shows the NMTC is a significant catalyst for job creation, creating more than one million jobs in some of the nation’s poorest and most distressed communities. Further, when we release our full study in December, it will also show that economic activity instigated by NMTC projects also generates enough new tax revenue to cover the cost of the program to the federal government,” said Bob Rapoza, spokesperson for the NMTC Coalition. “However, despite the reach and results of the NMTC, the future of the credit is in jeopardy.”The NMTC was most recently provided a five-year authorization in The PATH Act. (P.L. 114-113) in December 2015. However, the House of Representatives today passed a tax reform bill, H.R. 1, which would repeal the 2018 and 2019 authorizations, potentially depriving communities of a key tool to promote job growth and business opportunity in communities left outside the economic mainstream. The Senate Finance Committee has taken an alternative approach, maintaining the NMTC. In addition, two senior members of the Finance Committee filed amendments earlier this week to make the NMTC permanent—Senators Rob Portman (R-OH) and Ben Cardin (D-MD). NMTC practitioners applaud this move but note that low-income communities need additional access to the NMTC to generate business growth and to build and sustain healthier economies. The Portman and Cardin amendments would provide similar expansion and improvements as outlined in 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. Pat Tiberi (R-OH), Tom Reed (R-NY), and Richard E. Neal (D-MA), who is the Ranking Member on the Ways and Means Committee. “No other the federal tax incentive is generally available to economically distressed rural and urban communities to promote economic revitalization. As Congress grapples with the fate of the NMTC in their tax reform bills, we hope the policymakers will examine this evidence of the tax credit’s effectiveness and the need for new investment in our country’s struggling and forgotten towns and inner cities, and preserve and expand this important tool for job creation and economic revitalization,” Rapoza said.  “The NMTC is a very good deal in terms of federal investments.” For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities.   Media Contact: Ayrianne Parks [email protected] (202) 393-5225