Details of the New Markets / Renewal Communities Agreement May 23, 2000


THE WHITE HOUSE
Office of the Press Secretary


For Immediate Release May 23, 2000



Details of the New Markets / Renewal Communities Agreement
May 23, 2000

NEW MARKETS INITIATIVES: This proposals have been constructed with the assistance of the many Members of Congress that are listed as cosponsors below and with substantial input from the Congressional Black Caucus led by Rep. Clyburn and the Congressional Hispanic Caucus led by Rep. Roybal-Allard.

New Markets Tax Credit. The deal includes the President’s New Markets Tax Credit to spur $15 billion in new private equity investment for business growth in our nation’s inner cities and isolated rural communities.

America’s Private Investment Companies (APICs): This HUD/SBA legislative proposal will create investment funds with minimum private capital of $25 million (which is eligible for the New Markets Tax Credit), that could then borrow twice that amount at government-guaranteed rates and spur $1.5 billion in private investment.

New Markets Venture Capital Firms (NMVC): This SBA legislative proposal would create a new class of venture capital funds that target a lower rate of return (e.g., 10%) and provide more hands-on management assistance to their small business portfolio investments.

EMPOWERMENT ZONES:

Empowerment Zones. The agreement authorizes the designation of 9 new Empowerment Zones, bringing the total number to 40 EZs, and extends the duration of the EZ designation in all 40 EZs to 2009.

RENEWAL COMMUNITIES:

Creation of Renewal Communities: These newly created Renewal Communities will be available in 40 competitively-selected communities that meet certain criteria showing economic distress in the community.

EXPANSION OF THE LOW INCOME HOUSING TAX CREDIT:

Low Income Housing Tax Credit. The deal includes the President’s proposal to expand the low income housing tax credit by 40 percent, from $1.25 per capita to $1.75 per capita, and to index the credit for inflation thereafter.

ALLOWING FAITH-BASED ORGANIZATIONS TO QUALIFY FOR SUBSTANCE ABUSE FUNDS:

The provisions included in this agreement will allow faith-based organizations to qualify for substance abuse prevention and treatments funds on the same basis as other non-profit organizations.




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