February 16, 2017
WASHINGTON – Yesterday, U.S. Senators Roy Blunt (Mo.) and Ben Cardin (Md.) introduced the bipartisan New Markets Tax Credit Extension Act of 2017, S. 384. The measure would promote investments in underserved communities by permanently authorizing a 39 percent federal tax credit for businesses or economic development projects in areas with poverty rates of at least 20 percent, or median incomes at or below 80 percent of the area median.
“The New Markets Tax Credit Program has a proven track record of spurring investment, expanding opportunity, and improving the quality of life in communities that need it most,” Blunt said. “In Missouri, the NMTC has benefited a total of 177 businesses and economic revitalization projects, creating thousands of jobs and resulting in a total of $3 billion in new investments. The NMTC provides a critical incentive for drawing much-needed capital to low-income rural and urban areas, and I look forward to working with my colleagues to ensure it continues.”
In addition to making the NMTC permanent, the legislation increases annual NMTC allocations, indexes future allocations to inflation, and exempts NMTC investments from the Alternative Minimum Tax.
Cardin added, “In Maryland, the New Markets Tax Credit has been deployed across our state on a diverse range of infrastructure and community development efforts, from a supermarket project to provide greater access to healthy food in my home city of Baltimore, to a conservation center on the Eastern Shore. I am pleased once again to be a supporter of this bipartisan legislation, which will create jobs and stimulate our economy in communities across Maryland and across America.”
Blunt has introduced legislation in the previous two congresses to make the NMTC permanent. Blunt also led efforts to secure a five-year extension of the NMTC in the PATH Act, which was signed into law in 2015. The NMTC was originally authorized in 2000 as part of the Community Renewal Tax Relief Act.
U.S. Representative Pat Tiberi (Ohio) introduced companion legislation to S. 384 in the House.
Between 2003 and 2012, over $31 billion in direct NMTC investments created an estimated 750,000 jobs. These NMTC investments leveraged an additional $31 billion in capital from other sources, all of which was invested in communities with high poverty and unemployment rates.
Following Are Some of the Missouri Projects That Have Benefited from the NMTC:
Habitat for Humanity, St. Louis, Mo. – NMTC financing filled in the funding gap for the construction of 65 home ownership units in the Jeff VanderLou neighborhood of St. Louis.
Urban Sprouts Child Development Center, University City, Mo. – $2 million in NMTC financing will be used to convert the former McCarthy Spice factory into the Urban Sprouts Child Development Center, a 15,000-square-foot, state-of-the-art early education facility that will serve 128 children.
Pagedale Towncenter, Pagedale, Mo. – Enterprise Financial provided $8.5 million in NMTC financing to construct the Pagedale Towncenter, part of the 24:1 community development initiative. The project includes a community health center, a facility providing mental health services for low-income children, and a theater offering discounted ticket prices residents of a neighborhood with a poverty rate of 36 percent. NMTC funding also helped finance the first new grocery store in the Pagedale community in 40 years.
INDEECO, Cuba, Mo. – In 2014, the NMTC helped INDEECO, a manufacturer of heating equipment and controls, grow from 200 to 350 employees in Cuba, Mo.
Jahabow Industries, Inc, Owensville, Mo. – Advantage Capital, in partnership with Southwest Bank, provided $10 million in financing to Jahabow Industries, Inc., enabling the company to continue its growth and innovation as a top manufacturer in the retail fixture industry. With a staff of 200, Jahabow is the second largest employer in the rural Owensville area.