Kelly, Tenney introduce the New Markets Tax Credit Extension Act to boost underserved communities

WASHINGTON, D.C. -- Today, U.S. Reps. Mike Kelly (R-PA), Chair of the Ways & Means Subcommittee on Tax, and Claudia Tenney (R-NY), member of the House Ways and Means Committee, introduced the New Markets Tax Credit Extension (NMTC) Act of 2023. This bipartisan legislation would make the NMTC permanent, index the allocation to inflation in future years, and exempt NMTC investments from the Alternative Minimum Tax.

“Over the years, the New Markets Tax Credit has well-proven its worth by revitalizing neighborhoods and cities and that need the help the most,” Rep. Kelly said. “The New Markets Tax Credit Extension (NMTC) Act would allow more communities across the country to receive the benefits that I have seen firsthand in my district, including 518 new jobs from three projects in Northwestern Pennsylvania. Since the program’s inception, the NMTC has created over 24,000 permanent jobs and 27,000 construction across Pennsylvania. Along with revitalizing American’s Main Streets, the NMTC program is a job creator and I’m proud to support this legislation again in the 118th Congress!”

“Now more than ever, it is essential that we work to create investments in our rural and low-income communities,” said Congresswoman Tenney. “Rural America is often forgotten by the Washington elites, which means that rural communities sometimes lack the necessary resources to invest, grow, and expand. Congress must make the New Markets Tax Credit permanent to allow our rural communities to continue accessing this important resource which helps to create jobs and stimulate economic growth. As a small business owner from rural America, I will always be a tenacious advocate for investments in our rural communities and businesses in Congress.”

“In Alabama’s 7th Congressional District, we have seen firsthand the power of the New Markets Tax Credit to spur investment and incentivize economic growth in some of our must vulnerable and underserved communities,” said Congresswoman Terri Sewell (D-AL). “The New Markets Tax Credit remains a critical tool to promote job creation and provide opportunities to those who need them most. We must ensure that this tool is made a permanent part of our tax code, and that’s exactly what this legislation would do.”

“The New Markets Tax Credit has been and remains absolutely vital for many of America’s urban neighborhoods and rural communities and will provide billions of dollars for high-impact, community revitalization projects,” said Bob Rapoza, spokesperson for the NMTC Coalition. “Over the years, the credit has been instrumental in financing plant and equipment for small manufacturing businesses and patient, flexible capital to other small businesses, hospitals, healthcare centers, homeless shelters and other transformative projects that improve communities, create jobs and economic opportunity. We appreciate the leadership of Representatives Tenney and Sewell in promoting more investment in distressed communities.”

BACKGROUND

Set to expire on December 31, 2025, the New Markets Tax Credit was established in the Community Renewal Tax Relief Act of 2000 (PL 106-554) and is an essential source of financing for businesses and community facilities in low-income, along with both urban and rural areas across the country. Private investors will receive a 39 percent tax credit distributed over seven years for qualified investments into Community Development Entities (CDEs). These CDEs use the proceeds of those investments to finance business expansions, health centers, daycare facilities, business incubators, and other essential revitalization projects.

Across Pennsylvania, the NMTC has created over 24,000 permanent jobs and 27,000 construction jobs since the program’s inception. Pennsylvania NMTC projects have helped 69 manufacturing and industrial businesses expand, provided new or improved healthcare options for 906,000 patients, and supported nearly 70,000 Pennsylvania children through new and improved schools, youth programs, and daycare facilities.

Over the past decade, there have been 4 projects totaling $40.3 million in total project costs in the 16th district. NMTC projects created a total of 518 jobs in Erie, New Castle, and Sharon, including 276 new permanent full-time jobs and 242 construction jobs. Over 54,000 additional patients are now served by annually by three new healthcare facilities and organizations.

The NMTC program was designed as a flexible incentive for economic development that meets evolving community needs. Instead of Washington picking winners and losers, the New Markets Tax Credit empowers local decision-making on important economic development projects.

Kelly and Tenney led this piece of legislation alongside Rep. Sewell (D-AL), and Rep. Davis (D-IL). Additional cosponsors include Rep. Miller (R-WV), Rep. Ferguson (R-GA), Rep. Fitzpatrick (R-PA), Rep. Schweikert (R-AZ), Rep. Smucker (R-PA), Rep. Wenstrup (R-OH), Rep. LaHood (R-IL), Rep. Yakym III (R-IN), Rep. Steube (R-FL), Rep. Carey (R-OH), Rep. Buchanan (R-FL), Rep. Van Duyne (R-TX), Rep. Blumenauer (D-OR), Rep. Sánchez (D-CA), Rep. Higgins (D-NY), Rep. DelBene (D-WA), Rep. Chu (D-CA), Rep. Moore (D-WI), Rep. Kildee (D-MI), Rep. Beyer (D-VA), Rep. Evans (D-PA), Rep. Panetta (D-CA).