Warner & Kaine Applaud $110 Million in Federal Funding To Support Economic Development in Distressed Communities in Virginia
WASHINGTON — Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) applauded $110,000,000 in New Markets Tax Credits to incentivize economic development in distressed communities in Virginia. Sens. Warner and Kaine have been strong supporters of the New Markets Tax Credit (NMTC) program, securing a five-year, $25 billion extension in December as part of the COVID-19 relief package.
“In December, the Senate came together to pass an emergency COVID-19 relief bill that delivered a needed lifeline to communities across Virginia,” said the Senators. “That assistance included a critical, five-year extension of the New Markets Tax Credit program, which has been proven to give a leg up to local economies. We look forward to seeing these dollars at work, spurring new investments and strengthening communities across Virginia.”
Allocated through the Community Development Financial Institutions (CDFI) Fund’s NMTC program, these dollars were distributed among two community development entities as detailed below:
- $60,000,000 for Capital Impact Partners in Arlington, Va.
- $50,000,000 for Hampton Roads Ventures, LLC in Norfolk, Va.
According to the NMTC Coalition, NMTCs have helped finance 77 projects in Virginia – including manufacturing expansions, business incubators, hospitals, vocational training centers, and daycare centers – contributing to 14,300 jobs in Virginia. Sen. Warner has also championed legislation, the Rural Jobs Act, to increase NMTC allocations for rural communities. Sen. Warner is a strong supporter of making the NMTC permanent, and is a cosponsor of Sen. Cardin’s New Markets Tax Credit Extension Act of 2021.
The NMTC Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. The CDEs in turn use the capital raised to make investments in low-income communities. CDEs must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority.
Since the inception of the NMTC Program, the CDFI Fund has completed 17 allocation rounds and has made 1,354 awards totaling $66 billion in tax allocation authority. This includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority used for the recovery and redevelopment of the Gulf Opportunity Zone.