Today, U.S. Senator Maria Cantwell (D-WA) cosponsored bipartisan legislation introduced by Senator Jay Rockefeller (D-WV) and Senator Roy Blunt (R-MO) to make the New Markets Tax Credit (NMTC) permanent. The tax credit has supported thousands of jobs in Washington state and more than 350,000 jobs across the nation. The NMTC is currently authorized through 2013.
The NMTC has been used to invest in key projects that support job growth. In Washington state, between 2003 and 2010, $650 million in NMTC investments leveraged more than $1.2 billion in total project investments and helped create nearly 6,000 full-time jobs and 8,000 construction jobs. Washington state projects built with NMTC support include Island Hospital's Medical Arts Pavilion in Anacortes, the Spokane YMCA/YWCA and Navos' mental health and wellness center in Burien. Nationwide from 2003 to 2010, NMTC leveraged $8 of private investment for every dollar of public funding.
"The New Markets Tax Credit is a proven winner for job creation in Washington state," said Cantwell. "Making the New Markets Tax Credit permanent will encourage businesses to invest and create jobs -- exactly what we need to do to grow our economy. I'm proud to be a cosponsor of this bipartisan job-creation legislation, along with my colleagues Senators Rockefeller and Blunt."
Cantwell is a long-time supporter of the New Markets Tax Credit. In 2011, she visited Seattle Children's Research Institute and saw how the NMTC helped it expand and hire 150 workers. Earlier that year, Cantwell also saw how Farwest Steel in Vancouver was using $48 million of NMTC to help build a fabrication and processing facility at the Port of Vancouver. This helped generate 300 construction jobs and supported 128 new permanent jobs.
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 NMTC, it can offer credits to the private equity investors in the CDE.