Bring Members of Congress to NMTC Projects during August Recess; Advocacy is Key to NMTC Extension

Published by Bob Ibanez, Peter Lawrence on Wednesday, July 31, 2019 - 12:00am

The new markets tax credit (NMTC) has been subject to reauthorization since 2006-most recently through the Protecting Americans from Tax Hikes Act (PATH Act, 2015) that extended the credit through calendar year 2019.

Throughout its almost 20-year history, the NMTC has proven to be a flexible and highly impactful tool to spur revitalization in economically distressed areas as detailed in the Community Development Financial Institutions (CDFI) Fund’s summary report and public data on NMTC investments through fiscal year (FY) 2016 released in December 2018. The recently released “2019 New Markets Tax Credit Progress Report” by the NMTC Coalition found that surveyed community development entities (CDEs) used $3.2 billion in NMTC allocation to deliver $6.1 billion in total project investment to low-income communities and that “NMTC financing helped 286 projects move forward in 48 states, Puerto Rico, and the District of Columbia. Investments ranged in size from a $50,000 investment in an urban farming program to a $47.7 million low-cost loan to a multipurpose social service campus for children.”

The NMTC has also consistently received bipartisan support from Congress. Legislation to permanently extend NMTC enjoyed strong bipartisan support in the last Congress, with 125 members of Congress from both parties signing on. Most recently, Sens. Roy Blunt, R-Mo., and Ben Cardin, D-Md., and Reps. Tom Reed, R-N.Y., and Terri Sewell, D-Ala., introduced the New Markets Tax Credit Extension Act of 2019 (S. 750 and H.R. 1680). This bipartisan legislation would make the NMTC a permanent part of the tax code; increase annual NMTC allocation from $3.5 billion to just more than $5 billion; index the credit for inflation; and provide alternative minimum tax relief to NMTC investors. At the time of this post, there were 124 cosponsors, including 65 Republicans and 59 Democrats, as well as 34 members of the tax-writing House Ways and Means and Senate Finance committees.

While enjoying an enviable record of longstanding bipartisan congressional support, advocacy efforts are underway to attract members of Congress to NMTC projects during the August recess when members return home to, among other things, work out of their local office or travel around the state conducting small town hall meetings with constituents. The congressional recess is an ideal time for CDEs to invite members on site visits to tour completed NMTC projects or future NMTC projects and make the case for an indefinite extension of the NMTC.

To facilitate these advocacy efforts, both the Partnership for Job Creation (PJC), a broad based national coalition of NMTC practitioners, and the NMTC Coalition, a national membership organization founded in 1998 to advocate on behalf of the NMTC, are working with CDEs on in-district advocacy. PJC has been scheduling a number of NMTC project site tours, grand openings and groundbreakings with congressional offices. The Coalition recently held an in-district advocacy webinar that provided a legislative update to NMTC Coalition members and walked through an in-district advocacy toolkit created to assist with outreach to members of Congress during the August recess. As members of Congress are currently developing their August recess schedules, now is the time to contact congressional offices and inquire into scheduling NMTC project site visits for when they are back home.

The toolkit highlighted how to showcase a site visit event with as many of the member of Congress’ constituents in attendance as possible and to be sure to match the program to the interest areas of the member of Congress. For example, if a senator or representative is on a committee that addresses a particular issue, such as healthcare, be sure that it is featured prominently on the agenda and invite a constituent who has benefited from the project to share a personal story of how the NMTC investment impacted their life.

The toolkit also provided useful tips on things to do in advance of the site visit (e.g., prepare flyers, handouts, invite the media, and make a sign that says the business is financed by the NMTC); during the site visit (e.g. ask the Member of Congress for his/her support of the NMTC bill if he/she is not already a cosponsor); and after the site visit (e.g. send thank you letters, including any press releases, news articles, and photos from the event and provide the name, email address, and direct phone number of a person to serve as a constituent services liaison for the Congressional office).

In addition to in-district advocacy, Novogradac’s public policy group is in the process of scheduling Capitol Hill meetings in early September with congressional representatives. Outreach to CDEs that have NMTC projects in key states and districts to accompany us has already begun and the response has been overwhelmingly positive.

Whether meetings are in-district or in DC, a key talking point should be connecting the dots between NMTC projects and the New Markets Tax Credit Extension Act of 2019, especially for those members that oversee the NMTC on the Senate Finance Committee or the House Ways and Means Committee. Regardless, any member not already a cosponsor of the bill should be asked to support it. With the NMTC set to expire at the close of 2019, every vote matters and the time for action is now.

There will be only a few pieces of must-pass legislation likely to be considered before the end of the calendar year, and the best way to advance a NMTC extension is to get as many members of Congress to cosponsor S. 750 and H.R. 1680 as possible.  These bills will not move on their own; they will likely be attached to a moving piece of tax legislation.  Having as many cosponsors as possible, especially those members on the tax-writing Senate Finance and House Ways and Means committees will increase the chances the NMTC extension or permanence will be included on the must-pass legislation, such as a measure to fund the government into the new fiscal year beginning on Oct. 1, or with fiscal year 2020 omnibus appropriations legislation.