An amendment to extend the New Markets Tax Credit (NMTC) program for one year through 2012 has been offered by Sens. John D. Rockefeller (D-W.Va), Olympia Snowe (R-Maine), and Robert Menendez (D-N.J.).
The proposed amendment is to Senate Finance Committee Chairman Max Baucus’ (D-Mont.) mark on the Highway Investment, Job Creation and Economic Growth Act of 2012.
According to the proposal, “The amendment is paid for by lowering the threshold in the Chairman's mark at which the government can deny the application for a new passport or renewal of an existing passport from $50,000 to $25,000 or more (indexed for inflation) of unpaid federal taxes, which the Internal Revenue Service is collecting through enforcement action.”
First authorized in 2000, the NMTC has effectively generated more than $18 billion in private investment to finance businesses and economic development projects in economically distressed urban and rural communities across America. In 2010 alone, $5 billion in private capital was raised using the NMTC, according to the amendment.
The program offers a seven-year, 39 percent federal tax credit made through Community Development Entities (CDEs) focused on helping small businesses and nonprofits grow in their communities.
The popularity of the program can be seen in last year’s demand for credits.
In 2011, the Treasury Department's Community Development Financial Institutions (CDFI), which oversees the NMTC program, received 314 applications for the credits. This was the largest number of applications the CDFI Fund has received from CDEs since 2002, the first year the program was available, and reflects an increase of 26 percent over the number of applications received for the 2010 round.
In addition, the aggregate total of $26.7 billion in NMTC allocation authority requested by the applicants for calendar year 2011 is an increase of 14 percent over the amount requested the previous year, and over seven times more than the $3.5 billion of NMTC allocation authority available under the 2011 allocation round.
Officials are expected to announce the results of the 2011 round early this year. This would be the final round of the program unless it is extended.