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Rural communities benefit from the New Markets Tax Credit

Rural Americans have often felt ignored by the policies of the federal government. However, in our most recent election, rural voters came out in strong numbers. They called on their elected officials to support policies that are fair for all Americans, including those hardest hit by the economy — rural families. That is why I was pleased to join my fellow House Ways and Means Colleagues, Reps. Pat Tiberi (R-Ohio) and Richard Neal (D-Mass.), in reintroducing the New Markets Tax Credit Extension Act of 2017 (H.R. 1098), which has made huge strides in rural communities nationwide.

The New Markets Tax Credit (NMTC) was designed to increase the flow of capital to businesses and low-income communities by providing a modest tax incentive to private investors. Over the past 10 years, the NMTC has proven to be an effective, targeted and cost-efficient financing tool valued by businesses, communities and investors across the country — both rural and urban.

{mosads}In rural communities, the NMTC has created tens of thousands of jobs, financed more than 800 businesses and facilities, and boosted many local economies. Look no further than Hornell, N.Y. With the support of local residents and businesses, the Y conducted a successful fundraising campaign, but they were still nearly $2 million short of the total project cost of $6.2 million. NMTC financing filled the gap, making the new facility a reality.

Additionally, the credit helped launch the National Comedy Center that is currently under construction. The center will be a regional landmark that will put Jamestown, N.Y., on the map as the national hub for comedy. It is evident that there are positive real world impacts this program can have right here in our back yard.

This is notable because rural economies in particular present unique obstacles to revitalization, including a lack of economic diversity and investors, the limited availability of credit, the seasonal nature of employment, and geographic isolation. The NMTC’s success is a result of the credit’s unique flexibility to meet the demands and interests of local leaders and, as a former mayor, I can tell you this is an important and uncommon characteristic in federal programs.

Since Congress amended the NMTC in 2006 to ensure rural communities received equal access to the credit, more investment has been driven to rural communities often left outside the economic mainstream. In fact, investment in nonmetro counties has picked up in recent years. Between 2012 and 2014, the share of NMTC investments going to rural areas grew to 24 percent, after averaging just 13 percent in the years prior.

The impact of NMTC investments in rural communities has been significant. According to a recent report from the NMTC Coalition, the credit delivered a total of $11.6 billion in capital investment to more than 800 rural businesses. These NMTC investments created more than 100,000 jobs.

I’m proud to be a strong supporter of the New Markets Tax Credit. The NMTC extension bill would ensure this important revitalization tool for communities is made permanent. As we in Congress continue our effort to reform the tax code, it will be one of my top priorities to ensure the continued success of NMTC’s for all Americans, but especially our rural communities.

Reed represents New York’s 23rd District and is a member of the Ways and Means Committee.

The views expressed by this author are their own and are not the views of The Hill.


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