August 03,2007

Baucus, Grassley Call For More Investment in Low-Income, Rural Communities

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Republican Chuck Grassley (R-Iowa) today urged the Treasury Department to ensure that rural communities receive their due share of investment under the New Markets Tax Credit (NMTC) program. Passed into law as a part of the Community Renewal Tax Relief Act of 2000, the NMTC was enacted to encourage financial institutions to provide capital, credit, and financial services in underserved markets. One of the Senators’ long-standing priorities has been to use financing instruments to foster the economic revitalization of low-income communities in rural areas. However, data through fiscal year 2005 shows disproportionately less investment in rural areas. In a letter to the Treasury Department’s Community Development Financial Institutions (CDFI) Fund, the Senators urged that CDFI’s new regulations ensure that a proportional share of NMTC dollars is delivered to rural communities.
“The New Market Tax Credit program plays a crucial role in spurring economic growth and helping businesses and individuals in rural areas, but it has strayed from its original purpose,” said Baucus. “In 2005, just 10 percent of program funds went to rural, low- income communities. As the CDFI Fund develops new regulations, it should work to ensure that rural areas receive their fair share of investment funds. ”
Grassley said, “People might forget that ‘rural’ doesn’t mean unpopulated or without development. A lot of Americans live in rural areas. Like city dwellers, rural residents also need access to businesses and affordable housing. It’s also important to remember that one economic development project can lead to others and revitalize an entire community. Rural areas deserve a fair shot at revitalization.”