PCDC recently joined more than 700 organizations across the country to sign on to a letter authored by the New Markets Tax Credit (NMTC) Coalition to the United States Congress urging them to take action to extend and provide an emergency expansion of the New Markets Tax Credit (NMTC) that will assist communities struggling with high poverty and unemployment due to the coronavirus pandemic – many of which also faced severe challenges in securing capital that pre-dated the pandemic.
As a Community Development Financial Institution (CDFI), PCDC has invested $222 million in low-income communities to date. Borrowers benefit from flexible terms and below-market interest rates, spurring development and investment in underserved communities. PCDC offers NMTC financing to Federally Qualified Health Centers, behavioral health institutions, AIDS Service Organizations, safety net hospitals, and more. Our investments have built 878,000 square feet of health care space serving 400,000 patients and created 2,850 construction jobs and 3,100 permanent jobs.
Beyond a permanent extension of the NMTC, the letter urges Congress to provide additional emergency NMTC allocations of $3.5 billion phased in over three years. By taking action to extend the NMTC program, Congress can ensure that CDFIs like PCDC are able to reach communities decimated by the pandemic and economic downturn with flexible, affordable capital that can enhance and expand essential primary care services needed now more than ever.
Read the full letter below or download to the PDF to see which organizations signed on.
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June 24, 2020
To the Congressional Leadership and Members of the 116th Congress:
We write to urge the 116th Congress to take action to extend and provide an emergency
expansion of the New Markets Tax Credit (NMTC) that will assist communities struggling with
high poverty and unemployment due to the coronavirus, but that also faced severe challenges
in securing capital that pre-dated the pandemic.
The NMTC is an important source of financing for businesses and community facilities in
America’s most distressed rural and urban communities. Congress authorized the NMTC in
2000 to bring down the cost of capital in communities outside of the economic mainstream.
Taxpayers receive a 39 percent tax credit (taken over seven years) for qualified investments
into Community Development Entities (CDEs), organizations with a track record of loans and
investments in underserved areas. CDEs use the proceeds of those investments to finance
business expansions, community facilities, and other projects prioritized by communities.
The NMTC, which is set to expire at the close of 2020, has a 20-year track record of promoting
revitalization in America’s economically distressed rural and urban communities. Through
September 2019, the NMTC delivered over $100 billion total project financing to over 6,000
businesses and projects in areas of deep distress and creating over 1 million jobs.
In 2018, eighty percent of NMTC activity was in areas of extreme poverty and unemployment
that far exceed the statutory requirements for economic distress. The NMTC – and the
organizations that use it to deploy capital to underserved communities – is well-suited to
provide patient flexible capital to support the disaster relief and economic stabilization needed
as the virus fades.
Specifically, we urge Congress to:
- Permanently extend the NMTC, along the lines of the bipartisan New Markets Tax Credit
Extension Act of 2019 (S.750/H.R. 1680); - Provide an exception from the Alternative Minimum Tax for NMTC investments;
- Provide an emergency NMTC allocation of $1 billion to be added to the pending 2019
round (for a total of $4.5 billion); and - Provide an additional NMTC allocation of $1.5 billion to be added to the 2020 round (for
a total of $6.5 billion for 2020), and $1 billion to the 2021 round (for a total of $6 billion
for 2021).
In addition, Congress should take steps to ensure more capital reaches businesses, nonprofits,
and revitalization projects by expanding the pool of eligible NMTC investors to allow more
individuals to participate, and adopting temporary policies that enhance the liquidity of
investors.
We urge Congress to take action to ensure this important incentive is available for community
revitalization that is needed now more than ever.
Thank you for your consideration of this request.
