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Dakotas America LLC provides new regional opportunities
A Community Development Entity (CDE), Dakotas America LLC, has been awarded a $50 million New Markets Tax Credit (NMTC) allocation-a 39% Federal tax credit designed to stimulate economic investment in low-income communities. This exciting new program is a collaboration between North Dakota and South Dakota development organizations to further support and enhance economic development in both states.
Under the program, a CDE competes annually with other CDEs throughout the nation for a share of fixed allocation amounts made available by the U.S. Treasury's CDFI Fund. Once an allocation is awarded, the CDE can then further assign its allocation to investors in specific projects that are being developed in low-income areas within the CDE's service territory. An investor receives the tax credit over seven years at the rate of 5-6% per year. That credit can be used against the investor's other income sources and it can be applied in conjunction with other incentive programs used for the project. This makes the program highly attractive to many investors, creating sources of capital that might not otherwise be available to a project, or creating superior investment terms for the project. Qualified investors can be corporations, partnerships or individuals.
Dakotas America LLC was created to present a unique value proposition-a community sponsorship and impact scenario that would allow it to competitively stand out among other CDEs. Dakotas America, LLC has solicited one of the broadest bases of public and private endorsement and support that could be obtained out of a region that has not received allocations to date. Its sponsorship comes from virtually all sectors that have a vested interest in regional economic development across the Dakotas-state and local government, the financial sector, community development groups, tribal organizations, the business community, trade organizations and others.
The concept originated through a collaborative partnership effort among Rural Development Associations, the North Dakota Rural Electric Association, East River Electric Power Cooperative, South Dakota Rural Enterprise and several development organizations and financial institutions from both states. After many discussions in 2004, a two-state task force formed last December, recommended the creation of a joint South Dakota/North Dakota Community Development Entity (CDE), and proposed that South Dakota Rural Enterprise serve as the managing entity of the new CDE. Beth Davis was named as Executive Director of the new entity.
"This is an exciting and important achievement for the Dakotas," said Davis. "The New Markets Tax Credit is an emerging tool in community development, and we believe this allocation will enable us to tackle some of the toughest projects across the region, thereby expanding economic opportunity and improving the quality-of-life for people in areas that need it most."
Click here to complete the Proposed Project Summary Form to present New Markets Tax Credits-eligible investment projects for allocation consideration. 
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