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

David McGirr, CEO, Greater Huron Development Corporation, Huron, SD

As the former Mayor of Huron, and current Economic Development Director, I can speak directly to the impact that the NMTC program has had in Huron. NMTC funding was a critical component of the funding package for Central Park, a brownfield redevelopment project in the heart of Huron. This project had been languishing for years due to a lack of funding, along with significant challenges that had been identified within the project, including asbestos in buildings, petroleum contaminated soils, mold abatement, and other environmental challenges. I can unequivocally state that the availability of NMTC funding was the only reason that the health hazards, environmental issues, and community blight located in the center of our city was able to be resolved. The project truly was a turning point for Huron; the resulting outcome not only created jobs and eliminated a blighted environmental hazard in Huron, but also provided enhancement for the arts, recreation, and education in our community.

Audrey Roling, CFO, YMCA of Greater Louisville, Louisville, KY

The NMTC program has increased the impact that the YMCA is having on the west Louisville community, bringing health equity outcomes to citizens who need it most.

Diana M Shaw, Executive Director, Lanai Community Health Center, Lanai City, HI

This program is critically important! As a result of our ability to tap into NMTC we build a new, state of the art health care facility and now are able to provider high-quality health care services (including telehealth) to this rural, remote, low-income underserved island!!!

Carole Gordon, Senior VP for Housing Development, The Bridge, New York, NY

We are developing a new housing model that includes 174 units of low-income housing (affordable and supportive) and ground floor light manufacturing. The model will only work if both the residential and manufacturing components receive tax credit allocations under LIHTC and NMTC. This will provide housing and economic development opportunities in a very poor neighborhood in NYC.

Alex Stillpass, Manager, RSA NMTC Fund LLC, Cincinnati, OH

The NMTC means opportunity to impact local and regional communities for positive change in jobs, wages, education and health care.

Kimberly Cutcher, Executive Director, LISC Toledo, Toledo, OH

The new market programs has helped to revitalize vacant structures and brownfields in our community and return

Peter Mello, Managing Director and coCEO, WaterFire Providence, Providence, RI

New Market Tax Credits were critically important to WaterFire Providence in creating the WaterFire Arts Center which is transforming the underserved Valley/Olneyville neighborhood of Providence into a vibrant arts corridor.

Allison Coleman, Capital Link, Inc., Boston, MA

The NMTC program is a critical resource for financing federally qualified health center facility projects nationally. Without the extension of this important program, many fewer low-income patients will be able to access primary and preventive care, as well as life-saving behavioral health and substance use disorder treatment.

Dirk Meminger, Board Member, Bridge Investments, Rock Island, IL

NMTC’s provide capital to assist in funding the development and expansion of businesses that then expand employment and the financial well being of communities.

Steve Cruse, President, Iowa Business Growth Co., Johnston, IA

The NMTC finances projects in the lowest income census tracts across our state, projects that would not happen but for this program!

Gerald Chester, President & CEO, Central Florida Community Development Corporation, DAYTONA BEACH, FL

The NMTC is a significant tool for community developers, as it allows the stakeholders and developers to make change in low income communities on a greater scale. It stimulates additional investment in distressed communities that otherwise would not be made. Finally, it creates Jobs, increases community ownership, and hope for lower income residents.

David Reiling, CEO, Sunrise Banks, St. Paul, MN

The NMTC is a life blood for transformative projects in highly distressed urban core of Minneapolis and St. Paul. We have leveraged the State’s largest public investment into light rail public transit to redevelop the commercial corridor bridging the two cities. NMTC has huge community and job creation impact!!!

Jim McCormick, Executive Director, Great Falls Rescue Mission, Great Falls, MT

The NMTC mean the world to us as an organization as we couldn’t have built a new Family Center without NMTC funding.

Staci Olsen, Program Manager, Community Development Finance Alliance, Salt Lake City, UT

The ability to fund high-impact community facilities and mixed-use projects that develop or redevelop real estate, providing access to critical community goods and services to LIPs, create affordable housing in areas with high need, both in metro and non-metro areas. Catalyze private economic development in Disadvantaged Businesses and Communities (DBCs). CDFA has a strong track record and ongoing mission of helping DBCs by providing access to nontraditional, flexible capital. CDFAs financial products enable smaller less experienced developers, investors, nonprofit’s and community banks to participate in NMTC transactions. Our projects move capital into LICs and provide services and opportunities for LIPs. From 2014 to Oct. 2019 CDFA created 3 Equity Innovative (EI) Funds with 2012, 2015 and 2017 Allocation with 8 QALICBs. Each EI Fund is set up as a blind fund to process multiple transactions with multiple QALICB, but only 1 Leverage Lender and 1 Investment Fund, so each QALICB receives costs savings through shared expenses. CDFA created standard legal documents for QALICBs, paid for by CDFA from our NMTC fees, to further reduce costs. EI Fund has less flexibility in its financing structure than CDFAs Flex Debt product, but if a QALICB meets EI Fund criteria, this product has a track record of reducing QALICBs costs on average by $236,513 or 60% when compared with Flex Debt product, increasing the Net Benefit to the projects. It also reduces the time it takes to close on financing by an average of 4 months or 50%. CDFA has a general pipeline of 12 projects totaling $105mm with 100% in DBCs. CDFAs pipeline is made up of 81% community facilities for education, healthcare, short term lodging and multi service community organizations and 19% mixed-use with education, office and affordable housing.

Arlo Washington, People Trust Loan Fund, Little Rock, AR

New Markets Tax Credits play a vital role in attracting investments to low-income communities in Arkansas and would not receive investments without them.

Alan Lesher, Chief Financial Officer, YMCA of the Inland Northwest, Spokane, WA

Thanks to the New Markets Tax Program our YMCA was able to build a community facility in Spokane, WA. The facility is located in one of the poorest zip codes in the state of Washington. This facility has greatly improved the local area by providing valuable services including but not limited to child care, domestic violence survivor support, health and wellness programs, and youth sports programs. Since it’s opening local businesses surrounding the facility have invested in their own facilities to greatly enhance the entire area.

Lawrence McComie, Vice President, PIDC Community Capital, Philadelphia, PA

The NMTC is an important tool used to fight poverty and support disadvantaged businesses in highly distressed communities.

Ginger Young, CEO, The Childhood League Center, Columbus, OH

But for the NMTC’s, we would have not been able to build a larger facility to serve MORE very young children with developmental delays in our community

Javier Lopez, Director of Community Relations, Coachella Valley Housing Coalition (CVHC), Indio, CA

The NMTC means a great deal to our organization and the communities we serve. We have over 35 years developing affordable housing for our working families, farm workers, migrant farm workers, seniors, and veterans. This credit has allowed organizations like CVHC to continue providing the American Dream of homeownership to thousand of individuals and families who could not otherwise have a roof over their heads. Therefore, the Coachella Valley Housing Coalition is proud to join others in urging Congress to provide a permanent extension and expansion of the New Markets Tax Credit.

Susan Hay Patrick, Chief Executive Officer, United Way of Missoula County, Missoula, MT

New Market Tax Credits have supported some of the most urgently needed community-strengthening projects in some of the most economically distressed areas of our region, including our 13 Native American reservations. Financially feasible NMTC-supported projects are creating jobs, fostering community economic self-sufficiency, and improving the health and quality of life for countless residents throughout our region. It is absolutely critical that this high-impact, community-revitalizing program be continued.
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