Let’s Seize New Markets Tax Credit Opportunities

Indian country money is drying up

Between about 2006 and 2013, Indian country roared with housing, community facility and infrastructure construction. Thanks in part to the American Recovery and Reinvestment Act, the New Markets Tax Credit (NMTC), which brings private investors to low-income communities, funded much of that development. Over that span, the companies that bring NMTCs to Indian country—community development entities (CDE)—were on a roll. Four separate CDEs focused on Indian country allocated $298 million in NMTCs for tribal projects.

Then the money dried up. In 2013 and 2014, the Community Development Financial Institutions Fund (CDFI Fund), which as part of the U.S. Treasury Department oversees the NMTC program, did not allocate NMTCs to any Indian country-focused CDE. Native American leaders made their frustrations about this clear.

In August of 2014, the Native American Finance Officers Association (NAFOA) proclaimed: “Despite the considerable amount of tax credits deployed throughout the country and the potential of the program to significantly increase economic growth in Indian Country, tribal communities and tribally focused CDEs have been left behind. In fact, over the last two funding cycles in 2013 and 2014, no tax credit allocations were given to Native CDEs.” NAFOA joined the likes of Professor Gavin Clarkson and Travois New Markets Advisory Board members Lance Morgan and Gabe Galanda in urging political action.

Heeding the call to political action, Native leaders loudly explained to Congress “that there is great need and high demand in Indian country for NMTCs.”

Officials in DC heard the message. Last year, the Chickasaw Nation Community Development Endeavor landed $20 million in NMTCs, and quickly financed a community health center on the Lac Vieux Desert reservation in Michigan and a model mixed-use community on the Winnebago reservation known as Ho-Chunk Village. Better yet, last month, Travois New Markets secured a $50 million award. Both the Chickasaw and Travois CDEs exclusively deploy NMTCs to American Indian, Alaska Native and Native Hawaiian communities.

The increased allocation of NMTCs to Indian Country is great news for any group that is developing business, tourism, health care, educational, infrastructure or other tribal community projects. But in order to keep this momentum going, Indian Country must demonstrate demand for these crucial tax credits. In other words, having talked the talk during the two off years, we must now walk the walk.

Our continued advocacy is important, especially as the Trump Administration and Congress pledge to re-write the U.S. tax code. President-elect Donald Trump campaigned on the idea that tax credits could be deployed to pay for infrastructure projects throughout the country. He pledged tax relief to rural America. Permanent codification of the NMTC (and Low Income Housing Tax Credit) programs dovetails with those promises, and is supported by the dollars invested and jobs already created in Indian country through tax credit-backed projects.

More generally, Indian country needs greater access to capital, with too many tribal people still lacking access to basic infrastructure. So in addition to specifically asking the Trump Administration and Congress to make NMTCs permanent, Native leaders must remind federal officials, including those leading the CDFI Fund, about the ongoing need for increased capital access in Indian country.

And while federal advocacy in all forms—phone calls, emails, Hill visits, site visits—is important, the best way to demonstrate the ongoing need for NMTCs is to utilize them. If you are on the path to developing a new community or business facility on trust land that creates new, quality jobs, get in touch with Travois, which is presently the lone CDE with a NMTC allocation dedicated exclusively to Indian country. The better the project, the better the jobs, the louder and clearer the tribal demand for NMTCs will be to officials in Washington.

The time is now to seize NMTC opportunities.

Gabriel “Gabe” Galanda is the managing partner of Galanda Broadman, PLLC. He belongs to the Round Valley Indian Tribes. Little Fawn Boland is a partner at Ceiba Legal, LLP. She is a tribal member of the Piro-Manso-Tiwa Indian Tribe of the Pueblo of San Juan de Guadalupe. Gabe and Little Fawn are advisory board members for Travois New Markets, LLC—a national community development entity providing New Market Tax Credits to Indian Country.

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