[Congressional Record Volume 151, Number 124 (Thursday, September 29, 2005)]
[Senate]
[Pages S10748-S10749]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mr. Rockefeller, and Mr. Bunning):
  S. 1800. A bill to amend the Internal Revenue Code of 1986 to extend 
the new markets tax credit; to the Committee on Finance.
  Ms. SNOWE. Mr. President, today I rise to introduce legislation that 
would re-authorize the New Markets Tax Credit for five additional 
years. I'd like to thank the Senator from West Virginia, Jay 
Rockefeller, for cosponsoring this legislation, as well as Senator Jim 
Bunning. Their strong support is appreciated, and this program will 
help revitalize many communities all across America.
  The New Markets Tax Credit was enacted in December 2000 as part of 
the Community Renewal Tax Relief Act and offers a seven-year, 39 
percent Federal credit made through investment vehicles known as 
Community Development Entities (CDEs). CDEs combine private investment 
dollars with capital

[[Page S10749]]

raised through the incentive to make loans to or investments in 
businesses in low-income communities.
  In its brief period of existence, the New Markets Tax Credit has had 
a tremendous success in strengthening and revitalizing communities. In 
Maine, Coastal Enterprises, Inc. issued a $31.5 million long-term NMTC 
loan to Katahdin Forest Management, which provided additional working 
capital for two large pulp and paper mills. These investments resulted 
in the direct employment of 650 people and potential jobs for another 
200. The Katahdin Project has helped to diversify the area economy 
through the development of new, high-value wood processing enterprises 
and recreational tourism.
  CDEs have also invested in a new child care facility on Chicago's 
west side, the first new supermarket and shopping center in inner-city 
Cleveland in 30 years and a new aerospace facility in rural Oklahoma.
  All of these projects demonstrate the revitalization and 
strengthening of communities that the Credit is helping to make 
possible. In only 3 years, CDEs have raised $2 billion of capital for 
direct investment in economically distressed communities across the 
Nation. This impressive activity over a short period of time points to 
the need and opportunity for such investment in low-income communities.
  Unfortunately, as effective as the New Markets Tax Credit has been, 
demand for the incentive has far exceeded supply. In fact, the average 
demand in the first three rounds was a staggering 10 times the amount 
of available credits. The Treasury Department awarded the first round 
of $2.5 billion in tax credits in March 2003, a second round of $3.5 
billion in May 2004, and a third round worth $2 billion in May 2005.
  Despite the track record of the New Markets Tax Credit and continued 
demand for the incentive, it will expire at the end of 2007. Congress 
must reauthorize this Credit to ensure investment capital continues to 
flow to our most disadvantaged communities. Our bill renews this 
valuable incentive for 5 additional years, through 2012, with an annual 
credit volume of $3.5 billion per year, adjusted for inflation.
  It is critical that Congress act to renew the New Markets Tax Credit. 
It is a modest incentive that clearly works for our most vulnerable 
communities. I look forward to working with Finance Committee Chairman 
Grassley to re-authorize the Credit and to ensure that it includes all 
areas of the country, including rural areas underserved by traditional 
investments.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1800

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``New Markets Tax Credit 
     Reauthorization Act of 2005''.

     SEC. 2. EXTENSION OF NEW MARKETS TAX CREDIT.

       (a) Extension.--
       (1) In general.--Paragraph (1) of section 45D(f) of the 
     Internal Revenue Code of 1986 (relating to new markets tax 
     credit) is amended to read as follows:
       ``(1) In general.--There is a new markets tax credit 
     limitation of $3,500,000,000 for each of calendar years 2008 
     through 2012.''.
       (2) Conforming amendment.--Paragraph (3) of section 45D(f) 
     of such Code is amended by striking ``2014'' and inserting 
     ``2019''.
       (b) Inflation Adjustment.--Subsection (f) of section 45D of 
     such Code is amended by inserting at the end the following 
     new paragraph:
       ``(4) Inflation adjustment.--
       ``(A) In general.--In the case of any calendar year 
     beginning after 2008, the dollar amount in paragraph (1) 
     shall be increased by an amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2007' for `calendar year 1992' in 
     subparagraph (B) thereof.
       ``(B) Rounding rule.--If a dollar amount in paragraph (1), 
     as increased under subparagraph (A), is not a multiple of 
     $1,000,000, such amount shall be rounded to the nearest 
     multiple of $1,000,000.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.
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