Treasury's New Markets Tax Credit Program Named One of Top 50 in Innovations in American Government Awards Competition

Washington, DC -- On April 15th, a day most Americans associate with paying their income taxes, a Federal program that provides tax credits for investments in low-income communities has been recognized for its innovation and effectiveness.

The U.S. Department of the Treasury's New Markets Tax Credit (NMTC) Program has been named today as one of the Top 50 Programs that will advance to the final stages of competition for the prestigious 2008 Innovations in American Government Award. The NMTC Program was chosen from approximately 1,000 programs representing all levels of government across the nation that applied for this award.

The Innovations in American Government Program is a significant force in recognizing and promoting excellence and creativity in the public sector. Through its annual awards competition, the Innovations in American Government Program provides concrete evidence that government can work to improve the quality of life for citizens. By highlighting exemplary models of governments' innovative performance, the Innovations in American Government Program serves as a catalyst for continued progress in addressing the nation's most pressing public concerns. It is administered by the Ash Institute for Democratic Governance and Innovation at Harvard University's John F. Kennedy School of Government.

"Naturally, I am very proud and excited that the New Markets Tax Credit Program has been selected as one of the Top 50 Programs in this year's Innovations in American Government competition," said Donna J. Gambrell, Director of the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund, which administers the NMTC Program. "The NMTC Program is achieving its goal of attracting private capital to our nation's low-income communities. While the program is only a few years old, it has already led to billions of dollars in new investment this program is truly transforming communities."

The NMTC Program provides tax incentives to induce private sector, market-driven investment in businesses and real estate developments located in economically distressed communities across the nation. Applicants receive allocations of NMTCs through annual competitions. From manufacturing plants in Iowa to health care centers on the Gulf Coast, the NMTC Program is attracting critically needed private capital investment to hard-to-finance projects in the nation's low-income communities. Its recognition by the Innovations in American Government Program today is particularly timely, given current challenges in the credit market that could significantly impact the availability of capital in low-income communities.

About the New Markets Tax Credit Program
The NMTC Program, established by Congress in December of 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment 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. Successful applicants are selected only after a competitive application and rigorous review process that is administered by the CDFI Fund.

Through the first five rounds of the NMTC Program, the CDFI Fund made 294 awards totaling $16 billion in tax credit allocation authority. The CDFI Fund anticipates awarding another $3.5 billion of allocation authority to CDEs in the fall of 2008. The NMTC Program is currently set to expire in 2008, but President Bush has asked Congress to extend the Program with a $3.5 billion authorization for 2009.

About the Community Development Financial Institutions Fund
The Community Development Financial Institutions (CDFI) Fund was created for the purpose of promoting economic and community development through investment in and assistance to community development financial institutions (CDFIs). The CDFI Fund's role in promoting community and economic development was expanded in FY 2001 when the Secretary of the Treasury delegated to the CDFI Fund the responsibility of administering the New Markets Tax Credit (NMTC) Program.

Since its creation in 1994, the CDFI Fund has awarded $864 million to CDFIs, community development organizations and financial institutions through the Community Development Financial Institutions (CDFI) Program, the Bank Enterprise Award (BEA) Program, and the Native Initiatives. In addition, the CDFI Fund has allocated $16 billion in tax credit authority to Community Development Entities (CDEs) through the NMTC Program.

About the Ash Institute for Democratic Governance and Innovation
The Roy and Lila Ash Institute for Democratic Governance and Innovation advances excellence in governance and strengthens democratic institutions worldwide. Through its research, publications, leadership training, global network, and awards program developed in collaboration with a diverse, engaged community of scholars and practitioners - the Ash Institute fosters creative and effective government problem-solving and serves as a catalyst for addressing many of the most pressing needs of the world's citizens. The Ford Foundation is a founding donor of the Institute. Additional information about the Ash Institute is available at www.ashinstitute.harvard.edu. Applicants for the 2009 Innovations in American Government Awards are encouraged to apply at www.innovationsaward.harvard.edu.