April 17, 2008
Washington, D.C. -
U.S. Senator Olympia J. Snowe (R-Maine) today praised the New Markets Tax Credit Program for being designated a Top 50 Program of Innovation in American Government by the Ash Institute for Democratic Governance and Innovation at Harvard Kennedy School. Senator Snowe called upon Congress to immediately extend the program, which expires at the end of 2008, as part of forthcoming tax extenders legislation.
"The Harvard Kennedy School’s recognition of the New Markets Tax Credit program is indicative of how this worthy initiative has helped revitalize low-income communities across the country," said Senator Snowe. "This program is a perfect example of what can happen when a program truly works as intended. Congress should act to renew this incentive before it expires at the end of this year. Failure to do so will significantly impact the low-income urban and rural areas that this program benefits."
Established by Congress in 2000, the New Markets Tax Credit Program is a competitive program that permits taxpayers to receive a federal income tax credit for making qualified equity investments in vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Substantially all of the taxpayer’s investment must, in turn, be used by the CDE to make qualified investments in low-income communities. Through its first five rounds, the New Markets Tax Credit Program has provided $16 billion in tax credit allocation authority. The program is expected to award another $3.5 billion in tax credit this fall.
Established in 1985 at Harvard Kennedy School by the Ford Foundation, the Innovations in American Government Awards Program is designed to improve government practice by honoring effective government initiatives and encouraging the dissemination of best practices nationwide. The New Markets Tax Credit Program was selected as one of 50 Top Programs from a pool of nearly 1,000 applicants from the federal, state, local, and tribal levels.
