NEW MARKETS TAX CREDIT -- (Senate - September 09, 2008)
Mr. KERRY. Mr. President, today I would like to speak about the new markets tax credit, NMTC--a vital development financing tool for low-income communities that is set to expire at end of this year unless Congress takes action.
The NMTC was signed into law 8 years ago in order to attract private investment to economically distressed communities by offering a modest Federal tax credit as an incentive for investors. Since its inception, this program has proven remarkably effective.
According to the Treasury Department, as of the first of July, the NMTC has been responsible for $11 billion of new investment in economically distressed communities across the country, including $600 million for community development entities based in Massachusetts. A January 2007 General Accountability Office report indicates that 88 percent of NMTC investors would not have made a particular investment in a low income community without the credit, and 69 percent had never made such an investment prior to working with the NMTC.
The NMTC program has successfully generated private investment in low-income communities. Community development entities, CDEs, that administer the program funds are frequently involved with communities with poverty rates higher than 30 percent and unemployment rates significantly greater than the national average. This program, by merging public and private investments, is infusing these communities with the resources to begin new businesses, create new jobs, build new homes, and jumpstart their economies.
In Massachusetts, six community development entities have been awarded credit allocations. One such entity in Massachusetts, the Rockland Trust Company, is a commercial bank that has been serving Cape Cod, southeastern Massachusetts, and Rhode Island for over 100 years. In an effort to serve areas with high employment and low income, Rockland Trust applied for an NMTC allocation to expand its capacity to offer financing products that could effectively serve these communities. Since 2004, the Rockland Trust has received $75 million in credits, which have been used to finance 70 different non-real estate and real estate business loans ranging in size from $50,000 to $8 million. The NMTC loans made by Rockland Trust have been instrumental in financing the acquisition and redevelopment of over 2.1 million square feet of real estate and thus far have contributed to the creation of over 1,200 jobs.
The Massachusetts Housing Investments Corporation, MHIC, based in Boston, is another entity putting the tax credit to work in Massachusetts. MHIC has used the credit to finance a range of commercial and industrial real estate projects, large and small, that would not have been possible without the financing brought in by the credit. One such project, the Holyoke Health Center, HHC, is a federally qualified health center located in a community of 40,000 with a poverty rate of 27 percent and the highest per capita mortality rate and rate of teen births in the United States. After many unsuccessful attempts to obtain financing for its expansion, the Holyoke Health Center approached MHIC and within months the project was approved, achieved closing, and began construction. MHIC helped finance the largest investment ever made in Holyoke, and created a financing structure that has become a national model for other community health care expansion projects nationwide. The new state-of-the-art Holyoke facility houses primary care and laboratory services, an on-site pharmacy, a dental clinic, counseling services, a day care facility accommodating 100 preschool children. The project created 210 construction related jobs as well as 239 permanent jobs principally for Holyoke residents.
I am a strong supporter of NMTC because I have seen it work in Massachusetts and I believe in its potential to revitalize communities and businesses that are too often left out of the mainstream market. I encourage my colleagues to join me in strong support of the extension of the NMTC.