President Clinton’s New Markets Initiative: Revitalizing America’s Underserved Communities

President Clinton’s New Markets Initiative: Revitalizing America’s Underserved Communities
President Clinton’s New Markets Initiative: Revitalizing America’s Underserved Communities

December 14, 2000

Today, President Clinton is pleased to announce the passage of the historic new bipartisan New Markets and Community Renewal initiative. This announcement is the outcome of the commitment President Clinton and Speaker Hastert made in Chicago last Nov. to develop a bipartisan legislative initiative on New Markets and revitalizing impoverished communities this year. This initiative will help encourage private sector equity investment in underserved communities throughout the country to ensure that all Americans share in our nation’s economic prosperity. The President’s New Markets Initiative was originally proposed in President Clinton and Vice-President Gore’s FY 2000 budget. President Clinton has highlighted the potential of the nation’s New Markets in three separate trips across America to underserved inner city and rural communities like Newark, NJ, Hartford, CT, the Mississippi Delta, Appalachia, and rural Arkansas, and the Pine Ridge Indian Reservation in S. Dakota.

THE KEY ELEMENTS OF THE LEGISLATION ARE:

NEW MARKETS INITIATIVES:

The New Markets Tax Credit. The credit will spur $15 billion in equity investment for business growth in low- and moderate-income rural and urban communities throughout the United States and Puerto Rico. The credit, worth over 30 percent of the amount invested (in present value terms), will be available to taxpayers who invest in a wide range of privately managed community development investment funds, such as community development banks and other CDFIs, venture funds, and new investment companies, that finance businesses in low- and moderate-income communities.

New Markets Venture Capital (NMVC) Firms. NMVC firms will provide incentives to increase the availability of venture capital in low and moderate-income communities for small businesses. Expert guidance will also be made available to small business entrepreneurs in inner city and rural areas. Ten to twenty NMVC firms are planned. The agreement authorizes the SBA to guarantee up to $150 million in loans that will match $100 million in private equity for a total of $250 million and provides $30 million in technical assistance for small businesses.

BusinessLINC (Learning, Investment, Networking and Collaboration). The bill provides $7 million in funding for BusinessLINC -- an innovative public-private partnership launched by Vice Pres. Gore -- and designed to encourage large businesses to work with and mentor small business owners and entrepreneurs in economically-distressed communities.

EMPOWERMENT ZONES:

-* Strengthened & Expanded EZs.* President Clinton and Vice President Gore proposed and signed Empowerment Zone legislation in 1993 establishing 9 EZs across the country – today there are 31 across America. This agreement: