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Press Release of Senator Cantwell
In Visit to Seattle Children’s Research Institute, Cantwell Calls for Tax Credit Extension to be Included in National Jobs Strategy
New Markets Tax Credit Helped Seattle Children’s Research Institute Create 50 Jobs in 2011, But Job-Creating Program is Due to Expire in December
Friday, September 16,2011
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) called for the inclusion of the tax credit program that helped Seattle Children’s Research Institute create 50 jobs this year in a Congressional jobs strategy. The New Markets Tax Credit is set to expire at the end of 2011. Cantwell sent a letter today to Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) urging them to extend the program.
Cantwell toured research labs at Seattle Children’s Research Institute that were built with the help of the New Markets Tax Credit. The credit has supported thousands of jobs across Washington state and up to 500,000 jobs across the country.
Seattle Children’s Research Institute used the credit to help expand its facilities and further its groundbreaking research. The program also helped Seattle Children’s Research Institute hire 150 workers; including 50 this year.
“Our top priority for a national jobs agenda should be continuing to invest in the proven programs that put people back to work,” said Cantwell. “The New Markets Tax Credit is attracting the kind of middle-class jobs that will get Washington moving again.This is my second visit in less than a month to a site that is using the New Markets Tax Credit to provide quality jobs for Washingtonians. That is why I’m calling on Congress to include it in a national jobs strategy.”
The New Markets Tax Credit was established in 2000. To secure a credit, an investment group forms a Community Development Entity (CDE) and then applies to the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI). The group seeks out qualifying equity investments for the CDE. Once it has the capital in place the CDE turns it into qualified equity investments in low-income communities and small businesses. When the CDE is awarded the New Markets Tax Credit, it can offer credits to the private equity investors in the CDE.
Cantwell has been a strong advocate for the New Markets Tax Credit. On August 24, she toured a construction site near the Port of Vancouver that was creating 200 jobs through the program.
Cantwell is a cosponsor of the New Markets Tax Credit Extension Act of 2011 being introduced by Senator Jay Rockefeller (D-WV) and Senator Olympia Snowe (R-ME). The legislation would extend the credit for another five years and provide $5 billion in annual allocation authority. It would additionally provide an Alternative Minimum Tax (AMT) Exemption so investors would get the same consideration under the AMT that they would by investing in many other federal tax credits.
Cantwell, a member of the Senate Small Business and Finance Committee, has long championed measures that get businesses hiring and investing again. She played a leading role in authoring championing the Small Business Jobs Act, a measure helping small businesses create and preserve hundreds of thousands of jobs through tax incentives and expanded private-sector lending. Cantwell was instrumental in winning passage of the Small Business Lending Fund to encourage small business growth through increased access to lending capital. The Fund enables community banks to increase lending to small businesses looking to expand. Cantwell fought to create the Fund in response to the seizure of credit markets caused by the Wall Street meltdown that prevented even thriving businesses from accessing capital.
The complete text of the letter sent today to Leaders Reid and McConnell follows:
September 16, 2011
Senator Harry Reid
Senate Majority Leader
Washington, DC 20510
Senator Mitch McConnell
Senate Minority Leader
Washington, DC 20510
Dear Leaders Reid and McConnell:
Since its creation, the New Markets Tax Credit (NMTC) has been helping build American communities and creating jobs. As Congress develops a national jobs strategy, we must continue this proven program which has done so much to improve the well-being, communities, and prospects for millions of Americans.
The NMTC was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The NMTC attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). Since the program began, Washington State has received $319 million in awards to CDEs.
The NMTC is set to expire at the end of 2011. Since my election to the Senate, I have consistently supported its continuation. Recently, our colleagues Senator Jay Rockefeller (D-VW) and Senator Olympia Snowe (R-ME) have introduced the New Markets Tax Credit Extension Act of 2011 of which I am a cosponsor. I hope the Senate will soon consider and pass this important legislation.
The New Markets Tax Credit Extension Act of 2011 would extend the NMTC for 5 years and provide $5 billion in annual allocation authority. In addition, this bill would also provide an Alternative Minimum Tax (AMT) exemption for NMTC investments, thereby ensuring NMTC investors the same consideration under the AMT as is currently provided to investors in many other federal tax credits.
I believe it is imperative that the New Markets Tax Credit be extended. With our economy stalled and unemployment terribly high, we can’t afford to allow this important job creation program to lapse.