New Markets Tax Credit Needs an Extension (Rep. Ron Lewis)

I am pleased to join Congressman Neal (D-Mass.) in introducing legislation to extend New Markets Tax Credit program for an additional five years through 2013. The New Markets Tax Credit (NMTC) has been successful in meeting its principal goal — namely, mobilizing capital to economically distressed urban and rural communities.

I am a strong believer in the potential of the New Markets Tax Credit to bring capital to communities that have traditionally been left behind. Reports from the U.S. Department of the Treasury, reveals that interest in the NMTC from the investor market continues to increase at a rapid pace. More than $7.7 billion in new private capital has already been raised from 560 distinct investors. A recent report released by the U.S. Government Accountability Office indicates that 88% of investors in New Markets Tax Credit projects would not have made the same investment without the Credit.

The NMTC is a successful program because it brings diverse groups together — public and private sectors, investment banks and community development corporations — to attract private capital and jobs into some of the nation’s most impoverished areas.

The NMTC continues to be a catalyst for small business development, fostering start-ups, technology firms, manufacturers, neighborhood retail stores, and shopping centers in low income communities. These investments in turn have created many jobs. The NMTC has also been used to finance vital community facilities that are often lacking in poor communities – charter schools, community health centers, biotechnology campuses, employment training centers, day care facilities, as well as mixed-use commercial and housing developments. These facilities are essential to help qualified communities grow and thrive.

Congress should extend the New Markets Tax Credit or provide a permanent authorization. Investors, community development entities and businesses need greater certainty in planning and implementing revitalization strategies in economically distressed urban and rural communities. I believe this legislation takes the correct course by reauthorizing this program for five years.