U.S. Rep. Mike Kelly (R-PA) on Feb. 6 cosponsored a bipartisan bill to make permanent the New Markets Tax Credit (NMTC) Program, which incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities.
The congressman signed on as the lead original cosponsor of the NMTC Extension Act, H.R. 1103, which is also cosponsored by 22 other members, including U.S. Reps. Lloyd Smucker (R-PA), Brian Fitzpatrick (R-PA), and Terri Sewell (D-AL).
If enacted, H.R. 1103 would make the NMTC permanent, index the allocation to inflation in future years, and exempt NMTC investments from the alternative minimum tax, according to a bill summary provided by Kelly’s office.
“Over the years, the New Markets Tax Credit has well-proven its worth by revitalizing neighborhoods and cities that need the help the most,” Kelly said Monday. “The NMTC Extension 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. Along with revitalizing America’s Main Streets, the NMTC Program is a job creator and I’m proud to support this legislation.”
Established under the Community Renewal Tax Relief Act of 2000, the NMTC serves as a nationwide funding source for businesses and community facilities in low-income and economically distressed communities, especially rural areas.
Private investors are incentivized with a 39-percent tax credit, distributed over seven years, for qualifying investments in Community Development Entities (CDEs), which utilize the investment proceeds to fund business expansions, health centers, daycare facilities, business incubators, and other vital revitalization initiatives, according to the summary.
H.R. 1103, which is supported by Enterprise Community Partners, has been referred to the U.S. House Ways and Means Committee for consideration.