Congressman Faleomavaega announced today that in a joint letter with Congressman Luis Fortuno of Puerto Rico, Congresswoman Madeleine Bordallo of Guam, and Congresswoman Donna Christensen of Virgin Islands, they requested support from Chairman Charles Rangel of Committee Ways and Means and Ranking Member Jim McCrery for a bill that would extend the benefits under the New Markets Tax Credit (NMTC) Program to include the U.S. territories.  Cosponsored by Faleomavaega, Bordallo, Christensen, and Fortuno, H.R. 5742 seeks to amend the Internal Revenue Code to extend eligibility under the NMTC for community development entities created or organized in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the Virgin Islands.  The full text of the letter is included below.

 Dear Chairman Rangel and Ranking Member McCrery:

We write to respectfully request your support for a bill we recently introduced to extend the full benefits of the New Markets Tax Credit (NMTC) Program to the U.S. territories. H.R. 5742, a copy which is enclosed for your review, would amend the Internal Revenue Code of 1986 to allow the Secretary of the Treasury to certify otherwise qualified Community Development Entities (CDEs) created or organized in any one of the five U.S. territories as eligible to participate in the NMTC Program. Although CDEs created or organized elsewhere in the United States currently operate in the territories under the NMTC Program, a CDE created or organized in a territory is effectively precluded from doing so and is in fact ineligible for CDE certification due to its location under the authorizing statute (26 U.S.C. 45D).
 
The Secretary of the Treasury recently denied CDE certification to a reputable not-for-profit organization incorporated in Guam that aimed to invest in low income housing and that otherwise satisfied the strict parameters of a CDE. The denial was due solely to its location of incorporation in a territory.
 
H.R. 5742 would correct an oversight of the Congress in the enactment of the Community Renewal Tax Relief Act of 2000, which authorized the NMTC Program. We do not believe Congress meant to exclude the territories from full participation under this important program. The goal of the NMTC Program is to stimulate investment in low income communities, yet entities organized for such investment purposes in the jurisdictions we represent are unable to take advantage of this program for the benefit of their own communities. We believe our bill is entirely consistent with the legislative intent of the Community Renewal Tax Relief Act of 2000 and would allow for otherwise qualified organizations in the territories to fulfill the purposes of the NMTC Program in the communities within which they are incorporated.

 Faleomavaega and his colleagues concluded their letter saying, “We urge your support for H.R. 5742 and request your leadership in advancing it through the legislative process either as a standalone bill or as part of any appropriate larger tax bill. Thank you for your attention to our request.”