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2000 - New Market Tax Credit
One reason for the proliferation of charter schools was the result of the New Markets Tax Credit (NMTC), established by President Bill Clinton in 2000. The intent of the law was to serve as an incentive to have Banks and equity funds invest in charter schools in underserved areas. However, these investors can also take advantage of a very generous 39% tax credit which can be combined with other tax breaks without limits and doubles their investments over a seven-year period. Another incentive to invest in charter schools was the federally funded EB-5 program. Foreign nationals were able to obtain a green card for themselves and family members through government-approved investments that create jobs. The only requirement for this “fifth employment-based preference” (EB-5) immigrant visa was to invest at least $5000,000 in a qualified development project which included charter schools.