Benicia Herald -- Thompson military base bill may aid Vallejo
November 3, 2013
By Donna Beth Weilenman
U.S. Rep. Mike Thompson, Benicia's representative in the House, has introduced legislation that would authorize spending up to $100 million annually for distressed communities that have experienced closure or realignment of military installations.
He said among the California cities that could be helped by the provision's tax credits is Vallejo, where the Mare Island Naval Shipyard was closed in 1996.
Thompson, D-Napa, is a senior member of the House Ways and Means Committee. He said his bill, H.R. 3439, the New Markets Tax Credit Military Installation Act of 2013, is bipartisan legislation co-authored by Republican Rep. Ralph Hall of Texas.
The legislation would expand the New Markets Tax Credit (NMTC) program, which targets low-income communities experiencing chronic unemployment and high poverty rates, Thompson said. The program provides investors in those areas with a seven-year, 39-percent federal tax credit.
“By expanding these high-value tax credits, the bill incentivizes private sector investments in communities that have been hit hard by the closure or realignment of local military installations,” he said.
“These tax credits are job and revenue creators that can help resurrect communities that have been devastated by military base realignments and closures,” Thompson said. The tax credits have proven successful in encouraging the intended investments, “but the supply of these tax credits simply doesn't meet the demand or the need,” he said.
“Expanding the New Markets Tax Credit program can promote private sector investment, put people back to work, and help communities grow their economy.”
Hall said he was “honored to join Rep. Thompson in sponsoring this important legislation that will help people in communities affected by base realignment and closures.
“Over the past several decades, hundreds of military installations around the country have been realigned or closed altogether through the Base Realignment and Closure (BRAC) process, as well as through other base closure laws, leaving communities scrambling to make up for the lost jobs and revenue,” he said, adding that he has been outspoken about his disagreement with the Department of Defense about those closures at a time when American troops are overseas, often in unfriendly nations.
However, solutions to BRAC still must be sought, he said.
“We should do all we can to responsibly help these defense communities rebuild. Their hard work and efforts continue to help keep our troops safe, and we owe these people the same hard work and dedication.”
Thompson said that when a military base is closed, the Department of Defense is required to complete any necessary environmental cleanup at the former base, then hand the property to a Local Redevelopment Authority (LRA).
The DOD's Office of Economic Adjustment and the LRA create a redevelopment plan for the property, he said.
“The goal of this process is to lead to a timely, beneficial, revenue-generating reuse of these former military bases,” he said. “However, numerous military installation cleanups take much longer and cost much more than expected, significantly delaying their reuse and causing many of these communities to become or remain economically distressed.”
The new legislation helps address this by authorizing up to $100 million per year in additional tax credits to let communities impacted by BRAC take advantage of the NMTC program. That program has helped grow local economies and creating jobs, the two members of the House said.
According to the U.S. Department of the Treasury and Robert M. Murdock, president of the Association of Defense Communities â€" which has officially endorsed the legislation â€" every $1 invested through the NMTC program generates $12 of private investment.
In Brunswick, Maine, a former Naval Air Station has become a $15-million, 80,000-square-foot medical manufacturing plant, and NMTC money has paid for $20 million in renovations to buildings now operated by a private aircraft manufacturer.
Combined, these two projects will bring more than 200 high-tech, high-wage jobs and other economic benefits to the former military community, the men said.
However, both projects could have been larger, had more NMTC money been available, they said.
Mark Sawicki, Vallejo's community and economic development director, said he hopes the legislation eventually will be signed into law.
“On behalf of the city of Vallejo, we strongly support adoption of the proposed bill to focus a portion of the New Markets Tax Credits Program to communities like ours that have continued to suffer from the closure of a military base,” Sawicki said.
“While much progress has been made since the Mare Island Naval Shipyard was closed in 1996, the environmental cleanup is only 50 percent complete, infrastructure is only 40 percent complete, and building rehabilitation is only 30 percent complete.
“The city continues to struggle to find funding sources to match and leverage local public and private investment, and thereby generate even a fraction of the jobs erased with the loss of the primary employer in the region, the Navy,” he said.
“The NMTC Program would be an instrumental tool to facilitate new development and we urge Congress to pass this bill.”
H.R. 3439 has been referred to the House Ways and Means Committee.
He said among the California cities that could be helped by the provision's tax credits is Vallejo, where the Mare Island Naval Shipyard was closed in 1996.
Thompson, D-Napa, is a senior member of the House Ways and Means Committee. He said his bill, H.R. 3439, the New Markets Tax Credit Military Installation Act of 2013, is bipartisan legislation co-authored by Republican Rep. Ralph Hall of Texas.
The legislation would expand the New Markets Tax Credit (NMTC) program, which targets low-income communities experiencing chronic unemployment and high poverty rates, Thompson said. The program provides investors in those areas with a seven-year, 39-percent federal tax credit.
“By expanding these high-value tax credits, the bill incentivizes private sector investments in communities that have been hit hard by the closure or realignment of local military installations,” he said.
“These tax credits are job and revenue creators that can help resurrect communities that have been devastated by military base realignments and closures,” Thompson said. The tax credits have proven successful in encouraging the intended investments, “but the supply of these tax credits simply doesn't meet the demand or the need,” he said.
“Expanding the New Markets Tax Credit program can promote private sector investment, put people back to work, and help communities grow their economy.”
Hall said he was “honored to join Rep. Thompson in sponsoring this important legislation that will help people in communities affected by base realignment and closures.
“Over the past several decades, hundreds of military installations around the country have been realigned or closed altogether through the Base Realignment and Closure (BRAC) process, as well as through other base closure laws, leaving communities scrambling to make up for the lost jobs and revenue,” he said, adding that he has been outspoken about his disagreement with the Department of Defense about those closures at a time when American troops are overseas, often in unfriendly nations.
However, solutions to BRAC still must be sought, he said.
“We should do all we can to responsibly help these defense communities rebuild. Their hard work and efforts continue to help keep our troops safe, and we owe these people the same hard work and dedication.”
Thompson said that when a military base is closed, the Department of Defense is required to complete any necessary environmental cleanup at the former base, then hand the property to a Local Redevelopment Authority (LRA).
The DOD's Office of Economic Adjustment and the LRA create a redevelopment plan for the property, he said.
“The goal of this process is to lead to a timely, beneficial, revenue-generating reuse of these former military bases,” he said. “However, numerous military installation cleanups take much longer and cost much more than expected, significantly delaying their reuse and causing many of these communities to become or remain economically distressed.”
The new legislation helps address this by authorizing up to $100 million per year in additional tax credits to let communities impacted by BRAC take advantage of the NMTC program. That program has helped grow local economies and creating jobs, the two members of the House said.
According to the U.S. Department of the Treasury and Robert M. Murdock, president of the Association of Defense Communities â€" which has officially endorsed the legislation â€" every $1 invested through the NMTC program generates $12 of private investment.
In Brunswick, Maine, a former Naval Air Station has become a $15-million, 80,000-square-foot medical manufacturing plant, and NMTC money has paid for $20 million in renovations to buildings now operated by a private aircraft manufacturer.
Combined, these two projects will bring more than 200 high-tech, high-wage jobs and other economic benefits to the former military community, the men said.
However, both projects could have been larger, had more NMTC money been available, they said.
Mark Sawicki, Vallejo's community and economic development director, said he hopes the legislation eventually will be signed into law.
“On behalf of the city of Vallejo, we strongly support adoption of the proposed bill to focus a portion of the New Markets Tax Credits Program to communities like ours that have continued to suffer from the closure of a military base,” Sawicki said.
“While much progress has been made since the Mare Island Naval Shipyard was closed in 1996, the environmental cleanup is only 50 percent complete, infrastructure is only 40 percent complete, and building rehabilitation is only 30 percent complete.
“The city continues to struggle to find funding sources to match and leverage local public and private investment, and thereby generate even a fraction of the jobs erased with the loss of the primary employer in the region, the Navy,” he said.
“The NMTC Program would be an instrumental tool to facilitate new development and we urge Congress to pass this bill.”
H.R. 3439 has been referred to the House Ways and Means Committee.
Issues:Jobs & Economy