Two Arkansas entities have received more than $80 million in federal New Markets Tax Credits (NMTC) allocations for 2019.
Arkansas Capital Corporation has been awarded $35 million for the 2019 calendar year through the Heartland Renaissance Fund, while Southern Bancorp Bank received a $50 million allocation.
The U.S. Department of Treasury’s Community Development Financial Institutions (CDFI) Fund awarded the funds this week. For this round of funding, the CDFI Fund allocated approximately $3.55 billion in NMTC funding, or 24.2 percent of the $14.7 billion that was requested by 206 organizations.
Based on the figures provided by the CDFI, the Arkansas organizations received approximately 2.43 percent of the total allocations for the United States.
In total, the CDFI Fund has distributed $61 billion in tax credit authority over 1,254 awards since its founding. According to the CDFI Fund website, each dollar invested by the federal government through the NMTC program generates more than $8 in private investment.
The new allocations bringing the ACC’s total NMTC allocations to $335 million since 2003.
“Through the $335 million in NMTC allocations we’ve received, Arkansas Capital and our local and state partners have helped projects produce 2,318 direct jobs and 1,384 construction jobs in the most distressed census tracts in our state,” Sam Walls, president of Arkansas Capital, said in a statement. “These jobs are part of 36 projects deployed to date. With our partners, these tax credits have helped Arkansas Capital to finance rural manufacturing operations, nonprofit and education facilities, and rehabilitated historic buildings in abandoned or distressed Main Street corridors,” he said.
Walls expects the new NMTC allocations to be utilized by the fall with the organization looking for “impactful projects, especially in low-income areas…,” he said.
The NTMC program allows individual and corporate taxpayers to receive non-refundable tax credits in exchange for making equity investments in Community Development Entities (CDEs), such as Arkansas Capital Corporation or Southern Bank Corp. These CDEs provide loans, investments and other financial services in low-income areas. According to the CDFI Fund website, the tax credits are 39 percent of the cost of the investment, which is claimed over a seven-year period. The CDEs use the capital to make their investments in the low-income areas.