WASHINGTON D.C. – U.S. Reps. Terri Sewell (D-AL) and Tom Reed (R-NY) introduced legislation today to spur private investment in low-income rural communities and urban neighborhoods by providing tax credits for private investments made in underserved communities.

“The New Markets Tax Credit is an essential tool for revitalizing rural and urban communities across the country, and is a proven, cost-effective incentive that spurs investment in areas by providing businesses with flexible, affordable access to financing,” Sewell said. “I am confident that extending the tax credit will continue to help attract new investment in Alabama’s 7^th District. New Markets Tax Credits have helped spur a number of important projects in the 7^th District, including financing the Entrepreneurial Center in Birmingham and transforming the Huyck Felt brick plant into a new wood pellet manufacturing facility in Aliceville, creating 275 jobs.”

“We care about boosting jobs here in New York and across the country, but unfortunately some small businesses – the backbone of our economy – still struggle to secure a fair amount of capital to spur revitalization,” Reed said. “By creating a better environment for businesses we will see transformative projects to thrive – boosting wages, services and economic development where it’s needed most.”

The New Markets Tax Credit Extension Act of 2019 (H.R. 1680) would provide private investors with a 39 percent credit against federal income taxes for investments made in some of the most distressed communities in the nation. To be eligible for New Markets Tax Credit (NMTC) financing, businesses being financed must, at a minimum, be located in designated low-income communities, defined by U.S. Census data as census tracts with a poverty rate of at least 20 percent, or with median family incomes that do not exceed 80 percent of area median income.

Currently, the NMTC is set to expire on December 31, 2019. The New Market Tax Credit Expansion Act would reauthorize and make permanent the NMTC.

While all NMTC investments benefit businesses in low-income communities, the NMTC does not target a specific type of business or sector. The NMTC places the project underwriting responsibility with community development organizations with deep ties to the communities in which they work.

Nationwide, NMTC has delivered $90 billion total project financing to over 5,000 projects, creating 1,000,000 jobs. According to the CDFI Fund, every dollar invested by the federal government in NMTC results in $8 of private investment in economically-distressed communities.

In addition to Reps. Sewell and Reed, the bill was introduced by Ways & Means Committee Members, including John Larson, Earl Blumenauer, Ron Kind, Bill Pascrell, Danny Davis, Linda Sanchez, Brian Higgins, Suzan DelBene, Gwen Moore, Dan Kildee, Mike Kelly, Jackie Walorski, Brad Wenstrup, Darin LaHood and Jason Smith. An identical bill was introduced in the Senate by Sens. Ben Cardin and Roy Blunt.

The New Markets Tax Credit Extension Act of 2019 is available here.