WASHINGTON, D.C. –
U.S. Senator Roy Blunt (Mo.) recently introduced the bipartisan New Market Tax Credit Extension Act of 2015, along with U.S. Senators Chuck Schumer (N.Y.), Steve Daines (Mont.) and Ben Cardin (Md.). The legislation would make the New Markets Tax Credit (NMTC) program permanent, provide an annual allocation of credits indexed to inflation, and exempt NMTC investments from the Alternative Minimum Tax. U.S. Representatives Pat Tiberi (Ohio) and Richard Neal (Mass.) also recently introduced a version of the bill in the House.
NMTC attracts capital to low-income communities by providing private investors with a 39 percent federal tax credit for investments made in businesses or economic development projects.
to read the bill.
“The New Markets Tax Credit Program has a history of success in Missouri, leading to billions of dollars in investments and thousands of jobs in rural and urban communities around the state,”
“I’m pleased to join my colleagues to introduce this bipartisan bill and make this tax credit permanent so that we can continue to encourage investment, job creation, and economic growth in low-income communities in Missouri and nationwide.”
“I am proud to again sponsor this proposal to make permanent the New Markets Tax Credit program, a proven job creator,”
. “In New York, the New Markets Tax Credit has been incredibly effective in delivering capital to underserved communities. The program has provided over $6 billion in total project financing to our state, creating nearly 50,000 construction jobs and 20,000 full-time jobs over the last ten years. Development projects, like Roswell’s new Clinical Sciences Center in Buffalo – a $42 million project that will add additional chemotherapy treatment chairs, additional breast cancer screening and treatment space, and new cancer research and clinical space—as well as other projects all across the state in places like Rochester, Schenectady and the Hudson Valley have contributed greatly to economic growth in these communities. Without a doubt, extension of these credits will help continue this momentum and ensure it reaches all pockets of the state.”
“The New Markets Tax Credit has stimulated over $85 million of investment in Montana since 2013 alone,”
. “It is a proven vehicle that spurs private development, creates good paying jobs and increases economic opportunity. This legislation is a much-needed step towards a permanent extension that will help secure the economic stability of our communities and sustain heathy local economies across the nation.”
“In Maryland, the New Markets Tax Credit has been deployed across the state on a diverse range of 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 to once again be a supporter of this bipartisan legislation, which will ensure that benefits of the credit will continue to be available to communities across the U.S.”
Background on the New Market Tax Credit Extension Act:
Blunt also joined U.S. Senator Jay Rockefeller (W.Va.) to introduce the bill in
. The NMTC program expired on December 31, 2014. Congress first authorized the NMTC program as part of the Community Renewal Tax Relief Act of 2000.
Between 2003 and 2012, over $31 billion in direct NMTC investments created some 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. While all NMTC investments benefit businesses and projects in low-income communities, NMTC does not target a specific type of business or sector. Decision-making on NMTC investments is at the local level, not in Washington.
In 2012 alone, NMTC investments generated almost $1 billion in federal tax revenue, easily offsetting the estimated $720 million cost of the program for the federal government.
We have already seen the NMTC program at work in Missouri. The NMTC program can be traced either directly or indirectly to the creation of nearly 18,000 Missouri jobs between 2003-2012. More than 140 Missouri businesses have utilized the tax credit since it was created, for projects totaling $2.4 billion in investments between 2003-2012. Missouri currently ranks 7th in the U.S. in terms of the dollar amount of these tax credits in the state.
- ASPEQ Holdings, Cuba, Monroe City, and St. Louis, Mo. – “My management team and I were only able to buy out the previous owner of our business with the help of the New Markets Tax Credit program. Traditional lenders could not provide the necessary funds without the additional funding from NMTC sources of capital. It’s quite likely the company would have been sold to a person or company without any ties to Missouri if we did not have the NMTC funds to bridge the owner’s valuation gap. Subsequently, we have used this very flexible and patient capital to expand our business with two additional acquisitions. We have grown from 200 to 350 people, all of which are in Missouri. These are the kinds of steady, well paying manufacturing jobs that employees love to have and we love to provide. It seems to me that New Market Tax Credits are one of the best uses of tax credits that the State of Missouri can utilize to grow jobs!,” said John Eulich, Chairman and CEO of ASPEQ Holdings, Inc.
- Central Bank of Kansas City, Mo. – “The New Markets Tax Credit Program has a history of success providing significant employment and revitalizing distressed neighborhoods. NMTC funds are currently being used to develop projects such as the LAMP project which will house the ReDiscover community mental health agency in Kansas City and the new manufacturing headquarter for Bissinger’s Chocolates in St. Louis. These projects will stimulate economic growth and create jobs by attracting private-sector capital investment into low-income areas,” said William Dana Jr. President and CEO of Central Bank of Kansas City.
- KCMO CDE, Kansas City, Mo. – “Since our first New Market Tax Credit investment in 2009, we have supported projects and businesses that have anchored communities throughout Kansas City, Missouri, spurring additional investment and opportunities. The KCMO CDE has facilitated the financing of qualified job-creating businesses and catalytic real estate development projects that have created significant community impacts in Kansas City’s most economically distressed areas. With the help of the NMTC program, companies such as Custom Truck and Equipment, Posty Cards, APT/Motovox and A.B. May have been able to expand their facilities, create jobs and serve as a catalyst for economic development,” said Ruben Alonso III, Executive Director of KCMO CDE.
- Local Initiatives Support Corporation (LISC), Greater Kansas City, Mo. – “With their bi-partisan legislation to solidify the New Markets Tax Credit, Senators Blunt and Schumer demonstrate a keen understanding of what works to improve local economies and communities. NMTCs are an essential way to attract private capital for new businesses and community facilities to places that have long struggled. The program works just as well in rural Benton County, Mo., where thousands of residents now have access to a new state-of-the art health center, as it does in the South Bronx, where a new community center offers a wide range of programs for youth and adults. NMTCs improve the tax base, increase local revenue, raise property values, create jobs and bring new goods and services to low-income communities so that people can live better,” said Stephen Samuels, Executive Director of the Local Initiatives Support Corporation's (LISC) Greater Kansas City program.
- Smokin Guns, North Kansas City, Mo. – “We desperately needed to build a new building and expand our business to meet demand, but were turned down by seven different banks before getting funding through the New Markets Tax Credit program. This private capital has allowed us to create 34 new jobs and our business has more than doubled. Thanks to the New Market Tax Credit program, this building and this restaurant will last past my lifetime and will provide opportunities and financial security to our sons and their families, as well as our employees in the Northland,” said Linda Hopkins, Owner of Smokin’ Guns BBQ & Catering.