Bipartisan Call to Make Federal Tax Credit Permanent that Leverages Private Investment in Economically Distressed Communities, Expands Businesses and Creates Jobs

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Washington, D.C. – Three members of the House Ways and Means Committee, including Congressmen Pat Tiberi (R-OH), Tom Reed (R-NY) and Richard Neal (D-MA), introduced a bill to secure the future of the New Markets Tax Credit (NMTC) today.  New Markets Tax Credit Extension Act of 2015 (H.R. 855) would ensure that rural communities and urban neighborhoods left outside the economic mainstream have access to financing to grow their economies and create jobs.

“The New Markets Tax Credit is a unique federal tax credit that both fosters public-private partnerships and gives local decision-makers flexibility to choose what investments will best address their economic challenges, in terms of job creation or added social services,” said José Villalobos, President of the NMTC Coalition and Senior Vice President of TELACU.

The NMTC was provided a one-year retroactive extension during the last weeks of the 113th Congress, but expired just a few weeks later on December 31, 2014. The introduction of the NMTC bill comes amid growing demand for a more definite answer on tax reform and denotes the possibility for both political parties to find common ground that benefits the communities and people they represent.

“The fact is, not all aspects of the federal tax code are equally valuable or cost-effective,” said Bob Rapoza, spokesperson for the NMTC Coalition. “Lawmakers need to assess which tax expenditures are generating returns, in terms of both economic value and social good. The NMTC is making a tangible difference, bringing new vitality and putting nearly three-quarters of a million people to work.”

The facts:

A bipartisan effort since its inception, the NMTC began as collaboration between Democratic President Bill Clinton and Republican Speaker of the House Dennis Hastert to attract private capital investment in low income communities and continues to garner support from lawmakers on both sides of the aisle. The tradition of strong bipartisan support for the NMTC continues, with the President calling for permanency in his 2016 budget proposal as well as this bill being introduced in the House.

“Over the last 30 years, federal community development spending, measured as a share of the Gross Domestic Product, has fallen by 75 percent. This legislation would ensure communities needing revitalization have the resources to get back up and running,” Rapoza adds. “We applaud Congressmen Tiberi, Reed and Neal for their commitment to our nation’s communities and cities, and hope their colleagues in Congress will follow their lead.”