The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) today released data collected on New Markets Tax Credit (NMTC) investments across the nation through fiscal year (FY) 2013. The CDFI Fund requires all Community Development Entities (CDEs) that have been awarded NMTC allocations to submit an annual report detailing how they invested Qualified Equity Investment (QEI) proceeds in low-income communities. These reports must be submitted to the CDFI Fund by the CDEs, along with their audited financial statements, within six months after the end of their fiscal year.
The NMTC Program enables economically distressed communities to leverage private investment capital by providing investors with a federal tax credit. All NMTC investments must meet statutory qualifications for their investors to be able to claim the tax credit. The vast majority of NMTC investments are made within statutorily defined “Low-Income Communities.” Low-Income Communities are census tracts with a poverty rate of 20 percent or greater, or a median family income at or below 80 percent of the applicable area median family income. In addition to investments located in Low-Income Communities, investments can qualify for NMTCs by using other statutory provisions designed to target certain areas or populations, including provisions for High-Migration Rural Counties, Low-Income Targeted Populations, and Gulf Opportunity Zone Targeted Populations.
Through the first 11 application rounds of the NMTC Program, the CDFI Fund has made 836 awards, allocating a total of $40 billion in tax credit authority to CDEs through a competitive application process. This $40 billion includes $3 billion in Recovery Act allocations and $1 billion of special allocation authority to be used for the recovery and redevelopment of the Gulf Opportunity Zone.
CDEs are required to report their NMTC investments in the CDFI Fund’s Community Investment Impact System (CIIS) for a period of seven years. Due to a time lag in reporting, NMTC investments reported in CIIS are less than the total amount allocated for the NMTC Program.
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