[Congressional Record Volume 154, Number 116 (Tuesday, July 15, 2008)]
[Extensions of Remarks]
[Page E1462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         NEW MARKETS TAX CREDIT

                                 ______
                                 

                           HON. PHIL ENGLISH

                            of pennsylvania

                    in the house of representatives

                         Tuesday, July 15, 2008

  Mr. ENGLISH of Pennsylvania. Madam Speaker, I rise today to speak 
about the New Markets Tax Credit, a vital community development 
financing tool which is set to expire at the end of this year unless 
Congress takes action to extend it.
  The New Markets Tax Credit was signed into law in 2000 with the goal 
of using a modest Federal tax credit as an incentive to attract private 
investment capital to viable urban and rural markets that private 
investors often overlook--and I am happy to report that the credit has 
done just that.
  As of July 1, 2008, the Treasury Department reported that the credit 
was responsible for $11 billion in new investment in economically 
distressed communities across the country.
  As a senior member of the House Ways and Means Committee, and Ranking 
Member of the Select Revenue Measures Subcommittee, I am interested in 
seeing how Federal tax credits influence investor behavior. I was 
particularly interested in GAO's findings on the NMTC in 2007 that 
found 88 percent of NMTC investors surveyed would not have made the 
investment in the low income community if not for the credit. The 
report further found that 69 percent of the investors surveyed 
indicated they had not invested in low income community projects prior 
to working with NMTC.
  These GAO findings are very powerful in my view because they indicate 
that the $11 billion in low income community investments reported by 
the Treasury Department would not have occurred were it not for the New 
Markets Tax Credit.
  As I mentioned, the credit was created with a clearly articulated 
goal: To generate private investment in low income communities by 
financing business and economic development activity. I am pleased to 
see that in a relatively short period of time a vibrant New Markets Tax 
Credit industry including community development organizations and 
investors has emerged to embrace this goal. In my home State of 
Pennsylvania, community development organizations have been awarded 
more than $413 million in NMTC allocations that have been used to 
finance a range of businesses and economic development projects in some 
of the State's most economically distressed areas in both urban and 
rural parts of the State.
  For example, in the East Liberty section of Pittsburgh, Pennsylvania, 
the New Markets Tax Credit was instrumental in preserving the historic 
Nabisco Bakery building. The Commonwealth Cornerstone Group, a 
nonprofit created by the Pennsylvania Housing Finance Agency that 
received a $60 million allocation of credits in 2006 to use throughout 
the State, used a portion of its allocation to revitalize the Nabisco 
Bakery building into a mixed use development to house neighborhood 
retail businesses as well as a 110-room hotel. The project, once 
complete, will create approximately 1,200 jobs for neighborhood 
residents.
  While I am pleased to point to the Nabisco Bakery project as a prime 
example of how the credit is being used to revitalize our distressed 
urban centers, more than 40 percent of my constituents live in rural 
areas. For this reason, I am pleased to see that the Treasury 
Department established rules to ensure that rural communities secure a 
proportional share of the investments generated with the credit. As we 
know, it is often the isolated rural communities and businesses that 
face the most significant barriers in terms of attracting outside 
private capital and the credit would be a powerful tool in bringing 
private equity capital to rural markets.
  I urge my colleagues to join me in supporting an extension of the New 
Markets Tax Credit which is currently set to expire at the end of this 
year. Our cities and rural towns stand to benefit greatly from this 
program and it should be extended.

                          ____________________