Sens. Klobuchar, Franken: $90 Million in Federal Funds to MN Businesses

Two Organizations In Minnesota To Be Awarded New Markets Tax Credits

Washington, D.C. - Oct 30, 2009 – Today, Senators Amy Klobuchar (D-Minn.) and Al Franken (D-Minn.) announced the distribution of $75 million to the National New Markets Tax Credit Fund Inc. and $15 million to the Great Neighborhoods! Development Corporation as part of the Treasury Department's New Market Tax Credit Awards program.

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“Minnesota small businesses play a vital role in the development of our economy,” said Klobuchar. “These programs will provide the resources needed for Minnesota businesses and neighborhoods to build and sustain vibrant communities and ensure a successful future.”

“These programs are making a real difference in Minnesota,” said Sen. Franken. “Communities and small businesses are the foundation of our economy, and community investment is going to be the foundation of our recovery.”

The Treasury Department’s New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. In each of the first three years, the investor receives a credit equal to five percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is six percent annually. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period. For more information on the program visit http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5.

National New Markets Tax Credit Fund ( www.ntcicfunds.com) uses its NMTC allocation to fund small business and community facility loans and diversify rural economies by utilizing partnerships with more than 48 lending organizations serving all 50 states. The Great Neighborhoods! Development Corporation (www.greatneighborhoodsdc.com) creates vibrant commercial destinations in resurgent Minneapolis neighborhoods.

Source: Senators Amy Klobuchar