The Community Development Financial Institutions Fund of the U.S. Treasury Department announced a $405 million tax-credit authority for California community development entities (CDEs) in April. The fund, intended to channel investments into low-income communities, will provide the tax credit allocation authority under the 10th award round of the New Markets Tax Credit (NMTC) program.
"(The NMTC) addresses one of the most significant obstacles to economic development that low-income communities face: a lack of access to patient, private investment capital," Cyrus Amir-Mokri, Treasury assistant secretary for financial institutions, said in a statement.
Nationally, $31 billion of tax credit investments have gone toward jobs preservation, community facilities and new businesses, Amir-Mokri added.
More than 70 percent of NMTC investments were in "communities that meet the highest distress criteria, above even the program's requirements," said Donna J. Gambrell, CDFI Fund director.
Established by Congress in December 2000, the NMTC program permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in CDEs. The credit is provided to the investor over a seven-year period and adds up to 39 percent of investment cost.
Awardees can be based in any state, Washington, D.C., Puerto Rico and certain U.S. territories, and can invest anywhere in the country.
The largest award went to Chase New Markets Corp., which picked up $70 million to invest in schools, health-care facilities and grocery stores in the Golden State as well as Florida, Georgia, Illinois, Michigan, New York and Texas.
Other awardees included USBCDE LLC of St. Louis, which picked up $65 million; DV Community Investment LLC of Phoenix, $60 million; and the Low Income Investment Fund of San Francisco, $55 million. Like Chase New Markets, they and most of the other awardees operate nationally.
California's only statewide entities in the 2012 round were Opportunity Fund Northern California of San Jose, which was awarded $30 million for investing in jobs, education, healthy food, and health care services, and New Markets Community Capital LLC of Los Angeles, awarded $25 million to invest in jobs and services in heavily Hispanic East Los Angeles.
The NMTC program generates more than eight dollars in private investment for every dollar the federal government invests, according to a news release. President Obama's budget for fiscal year 2014 includes an expansion and permanent extension of the program.
The 85 organizations that got awards in the 2012 round are headquartered in 28 states and Washington, and were selected from 282 applicants that requested NMTCs for investments of some $21.9 billion. For a breakout by state and year since 2010, click here.
The CDFI Fund has awarded over $1.7 billion to community development financial institutions since its creation in 1994, according to its website, and an additional $36.5 billion in tax credit investment authority to CDEs through the New Markets Tax Credit Program.
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