New Markets Tax Credit
Our Work on the NMTC
Rapoza Associates has worked on the New Markets Tax Credit (NMTC) since its inception. Our work on NMTC extends back to 1998, when we worked with our Community Development Corporation clients and the Clinton Administration to design a tax credit for community development, which the Administration named the New Markets Tax Credit. We organized an informal coalition – the Community Development Tax Credit Coalition – that lobbied successfully in support of the original legislation.
In 2004, we incorporated the NMTC Coalition. Rapoza Associates has managed the Coalition ever since. We built a membership base, diversified the board to reflect the growing NMTC industry, and established the Coalition as the principal lobbyist and policy expert on NMTC.
From the beginning, we knew it was essential to explain to diverse and changing Congresses and federal administrations the purpose and importance of this new community development incentive and highlight its success in revitalizing rural, urban, and tribal communities.
Since the initial awards in 2003, we have documented NMTC’s success in communities across the country. Our work includes 21 annual Progress Reports, hundreds of Bulletins updating Coalition members every year, four quadrennial NMTC at Work in Communities case study reports, fact sheets, an NMTC promotional video with interviews from around the country, and extensive, up-to-date information available on the Coalition’s website. Over the years, Coalition members used these fact sheets, data, and success stories to lobby at hundreds of meetings on Capitol Hill, as well as at more than 20 annual meetings and policy conferences, Capitol Hill briefings, and lobby days.
The Bush Administration took office shortly after the NMTC statute was enacted. We briefed the new Treasury Department and CDFI officials on the Credit; our work contributed to the successful launch of the NMTC. We coordinated with the Treasury Department and other administration officials on the initial agency guidance and allocation application. Ultimately, the Bush Administration became a strong supporter of the Credit, proposing extensions in its annual budget. Along with the Low-Income Housing Tax Credit, NMTC was one of the two pillars of the Bush community development policy.
We persuaded the Obama administration to extend and expand NMTC during the Great Recession. During the first Trump administration, the Coalition was successful in extending the NMTC in 2019 at $5 billion in annual allocation authority, a 44 percent increase, and, in 2020, securing a five-year, $25 billion extension. At that time, it was the largest extension in the NMTC’s history and led to last week’s historic news.
With the support of both Republican and Democratic administrations, we also established longstanding, durable bipartisan majorities supporting the Credit in the House and the Senate. Since the initial authorization expired in 2007, this broad base of support has led to 8 separate extensions totaling $71 billion in allocation authority. Along the way, we established a set-aside for rural NMTC investments, persuaded Treasury to launch the first double round in 2016, blunted negative press, thwarted the proposed repeal of the Credit in the House-passed 2017 tax reform legislation, and wrote the Rural Jobs Act. In this especially uncertain moment, we ensured the 2024-2025 double round became a reality. The congressional coalition that we forged was an essential ingredient in the recent successful campaign for a permanent authorization of NMTC in the One Big Beautiful Bill Act.
The real impact of our work is in the NMTC-financed businesses and projects in communities across the country. NMTC allocations totaling $76 billion have delivered over $143 billion in financing to more than 8,900 projects and created over 1.25 million jobs at a federal cost of less than $20,000 per job. The credit has rejuvenated over 2,000 manufacturing and industrial businesses and funded over 3,800 health centers, charter schools, daycare centers, apprenticeship programs, and other service providers. Thanks to the rural set-aside, in 2024, over 30 percent of NMTC projects were in rural communities.