FOREST
CITY, Iowa, July 11,
2024 /PRNewswire/ -- The NMTC Program has been vital
to the nation's economy and low-income communities since
established by Congress in December of 2000. NMTCs have spurred
$8 of private investment for every
$1 of Federal funding, revitalizing
underserved rural and urban communities nationwide.
Through 2023, $76 billion in tax
credit authority has been awarded by the CDFI Fund; more than
$72 billion helped stimulate 8,000+
projects, creating over 1.2 million jobs in communities having a
history of disinvestment.
Bipartisan Support for Over 20 Years
As congressional
members come and go, RDP joins the many communities and businesses
working to educate legislators on the progress and vitality of this
valued program. The Program has had great bipartisan support since
inception, recognized as a pivotal force in helping communities not
only recover but grow stronger through job creation and
business/community development. As communities grow, they become
more attractive to investors catalyzing a ripple effect that spurs
further investments and revitalization.
The NMTC program was initially authorized by Congress for seven
years as part of the Community Renewal Tax Relief Act of 2000.
Since then, Congress has extended the NMTC eight times, most
recently through the Omnibus and COVID Relief and Response Act of
2020 at $5 billion, the largest
extension in the history of the Credit; scheduled to expire
December 31, 2025. Proposed
bipartisan legislation (S.234 & H.R.2539) would extend the
program indefinitely and expand both allocation level and investor
base.
How Does the NMTC Program Work?
The NMTC Program
permits individual and corporate taxpayers to receive a
non-refundable tax credit against their federal income tax in
exchange for making equity investments in financial intermediaries
known as Community Development Entities (CDEs). A CDE is a domestic
corporation or partnership that provides loans, investments, or
financial counseling in low-income urban and rural communities.
CDEs apply to compete annually for NMTC allocation authority from
the CDFI Fund. If received, NMTCs are carefully invested toward
select, qualified projects expected to have maximum economic and
catalytic impact in low-income communities. Projects must meet the
specific criteria of Severely Distressed, Targeted Populations, or
Qualified Non-Metro Counties. Since inception of the NMTC Program,
the CDFI has completed 19 allocation rounds and issued 1,563 awards
totaling $76 billion in tax
allocation authority.
NMTCs often fill the financing gap when traditional financing
falls short or is unavailable, such as in smaller rural communities
located outside the preferred region of a traditional lender, or to
spur jobs and economic development in communities desperately in
need of economic stability. NMTC investments offer more favorable
financing terms and conditions than are available through
conventional financing to encourage investments within low-income
qualified regions. The tax credit provided to the investor
typically totals 39% of the total investment cost and is claimed
over a period of seven years.
Projects Financed with NMTCs
The flexibility of NMTCs
support a wide range of development, both for-profit and non-profit
businesses in manufacturing, food, retail, housing, health,
technology, energy, education, and childcare… nearly
everything that spurs economic development can be financed
(examples), with the exception of specified businesses relative to
massage/tanning, gambling, collectibles, liquor, and
such.
Rural Development Partners
Rural Development
Partners is a CDE with a national service area. From 2004
through 2023, RDP has won twelve NMTC awards from the U.S. Treasury
totaling $751.7 million, helping 50
businesses and nonprofits expand to provide quality jobs, economic
impacts, and healthy food access in underserved communities. To
learn more about RDP visit their Website, Facebook, LinkedIn.
Contact: info@rdpimpact.com
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SOURCE Rural Development Partners