Neighborhood Assistance Tax Credit Program NAP Helping Build

Neighborhood Assistance Tax Credit Program (NAP) Helping Build Successful Communities June 2018 1

Session Objectives • Provide an overview of the Neighborhood Assistance Program (NAP) Guidelines • Clarify and review the application and submission process • Share success story and the concepts behind NAP projects 2

About DCED The Department of Community and Economic Development’s mission is to encourage the shared prosperity of all Pennsylvania by supporting good stewardship and sustainable development initiatives across the commonwealth. 3

The Act • Low income individual: The goals of NAP are to provide resources to assist neighborhoods and communities with fiscal difficulties, encourage positive health outcomes, and address the safety and welfare of their residents. • Neighborhood: May be a few houses, a block, or a designated neighborhood—an area like West Philadelphia would not qualify, while a neighborhood like Mantua would. 4

The NAP Program Components “Regular” Neighborhood Assistance Program (NAP) Special Program Priorities (SPP) Neighborhood Partnership Program (NPP) Charitable Food Program (CFP) NAP Enterprise Zone Program (EZP) (Separate Guidelines) 5

NAP • 55 % tax credit • One project • One year commitment • $500, 000 max tax credit (3 or more projects $1. 25 max) • No minimum amount 6 SPP • 75% tax credit • One project that meets the criteria of a special program priority • One year commitment • $500, 000 max tax credit (3 or more projects $1. 25 M max) • No minimum amount

NAP Projects include: • Affordable Housing • Community Economic Development • Community Services • Education • Neighborhood Assistance • Neighborhood Conservation • Crime Prevention • Job Training • Charitable Food Assistance 7

SPP Projects Include: • Disaster or Economic Recovery • Integrating Weatherization & Housing Rehab • Diversity Initiatives • Mortgage Foreclosure Prevention • Blight Elimination • Veteran Initiatives • Rural Transportation Initiatives • Affordable Housing & Supportive Services for At-Risk Population • At-Risk & Vulnerable Populations Initiative 8

NPP • 75% tax credit minimum • Collaboration in the community-CDC/NID/BID+ 501(c)3 • Foster community involvement • At least five year commitment-renew contract every year • Six or more year commitment earns an 80% credit • $50, 000 minimum contribution amount and with a minimum application amount of $100, 000 9

Process • Agency responsibilities: define project, look for businesses to participate, complete application, follow up, reporting, closeout or audit. • Business participation: Agree with project, write letter of commitment for application process, make contribution once credits are approved, submit form to DCED for Department of Revenue approval to use credits 10

To formulate your application, consider and explain “The Four P’s”: • • 11 PLACE PROBLEM PROJECT (The bulk of the narrative) PROJECTED OUTCOMES

PLACE Describe the Project Area: Physical Boundaries (Street Boundaries) Distress Criteria of the Project Area - Provide Data - Include Source of Data Relate NAP Project to Larger Community Efforts Project Planning Process - Project Development Process - Other Funds Being Invested 12

PROBLEM • Clear & Specific Description of the NEED • Greater Detail of the Specific Distress Criteria -Project will address this problem • Include Verifiable Statistics • How is the Problem Impacting the Area 13

PROJECT • • • Description of the Project Must Relate to the Defined “Problem” Present the “Plan” Detail the “Approach” List Goals, Objectives and Outcomes Detailed Project Schedule Key Milestones and Dates • Identify Other Partners and Collaborators • Long-Term Sustainability Plan 14

PROJECTED OUTCOMES • Community Measures Report Inception Projected Actual • Must be completed and included with application • Annual Report 15

How does it work for the business contributor? • Write a letter committing an amount; If applying for NPP complete an MOU • Once application is approved, make contribution • Complete one page form requesting tax credits • Will receive a letter from the Department of Revenue and the credits will be applied to your account 16

Tax Compliance Form • As part of NAP application, applicants must include a completed Tax Compliance Form that will be reviewed by PA Department of Revenue (DOR) • Contributors must be in good standing with DOR • Any individual or entity with 20% or greater interest in the business must be identified and comply with DOR requirements. • Approval of projects is contingent upon the tax compliance requirements for each business contributor. 17

What type of State taxes can NAP credits be applied against? • • 18 Corporate Net Income Tax Personal Income Tax Insurance Premiums Tax Mutual Thrift Institutions Tax Capital Stock-Foreign Franchise Tax Bank Shares Tax Title Insurance and Trust Company Shares Tax

Benefits of NAP Credits 19 • Credits may be used up to five years following the contribution • Credits can be passed through in a partnership • Credits can be sold if your tax liability is satisfied • Business does not apply to NAP through ESA

Application Process • Non-profit community organization submits Electronic Single Application (ESA) to apply for project consideration • Application for Tax Credits “Approved” By DCED This is a competitive process and is NOT guaranteed! • Business Firm Must Still “Apply” To Use the Approved Tax Credit 20

NAP Tax Credit Application “Content” 21

NAP Tax Credit Application “Content” 22

General Info • $18 M available • Commonwealth fiscal year: July 1 to June 30 • DCED will review all NPPs first, then move onto the others • Contributions may be cash, equipment or supplies, real estate, technical assistance or on-the-job training • May have multiple contributors • Applications reviewed and evaluated by DCED 23

Case Study: Impact Services Corporation Casey O'Donnell President/CEO 24

Impact Services

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Impact Services 28

Thank you! Aliyah Furman Stanger Jesse Kowalick, M. Ed. Regional Director Chief, Division of Policy and Programs Southeast Regional Office Center for Community Services Phone: 215 -560 -5830 | alifurman@pa. gov Phone: 717 -720 -7357 | jkowalick@pa. gov Michael Shorr Deputy Regional Director Southeast Regional Office Phone: 215 -560 -3793 | mshorr@pa. gov 30 John Winters Human Resources Development Specialist Center for Community Services Phone: 717 - 720 -1471 | johwinters@pa. gov