Treasury Department tags $120 million for NC development organizations

From the U.S. Department of the Treasury:

Washington, DC—Building on the Obama Administration’s commitment to increase economic opportunity in distressed areas of the United States, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) today announced New Markets Tax Credit (NMTC) authority for investments totaling $120 million to three North Carolina-based community development entities (CDEs). Treasury will provide this tax credit allocation authority under the tenth award round of the NMTC Program.

“The New Markets Tax Credit addresses one of the most significant obstacles to economic development that low-income communities face: a lack of access to patient, private investment capital,” said Treasury Assistant Secretary for Financial Institutions Cyrus Amir-Mokri. “The $31 billion worth of tax credit investments nationwide in past years have gone toward preserving jobs and bringing community facilities and new businesses into neighborhoods that desperately needed them. I expect today’s awardees will continue that trend.”

“In fact, over 70 percent of New Markets Tax Credit investments have been made in communities that meet the highest distress criteria, above even the program’s requirements, CDFI Fund Director Donna J. Gambrell. “That result effectively demonstrates how essential the New Markets Tax Credit Program is to spurring economic development in underserved areas.”

The NMTC, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in vehicles known as Community Development Entities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. For every dollar invested by the Federal government, the NMTC Program generates over eight dollars in private investment. This strong record of spurring economic growth is one of the reasons why President Obama’s FY14 budget included an expansion and permanent extension of the New Markets Tax Credit.

The 85 organizations receiving awards under the 2012 round were selected from a pool of 282 applicants that requested NMTCs for investments approximating $21.9 billion. They are headquartered in 28 states and the District of Columbia, but will be providing services in a wide range of local and state areas as well as on the national level. For more detailed information about the states where awardees anticipate investing their allocations, please see the CDFI Fund’s website at www.cdfifund.gov/statesserved.