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Begich Urges for New Market Tax Credits for Alaska

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US Senator Mark Begich met with the Senate Committee on Indian Affairs on Wednesday to discuss the lack of dispersing federal funds to Alaska native communities. 

The panel included testimony from Deputy Director-Community Development Financial Institutions Fund at the U.S. Department of the Treasury Dennis Nolan.  Begich questioned him on the fact that no Alaska Community Development Entity has received a New Market Tax Credit since 2009.

The New Market Tax Credit was established in 2000 by Congress to encourage investments in businesses and real estate projects located in low-income communities.  Nolan says Alaska isn’t being purposefully left out.

“Cumulatively over the life of the program over $257 billion has been requested against $40 million in authority so it’s an extremely competitive program. The second point that I would like to look at the competition does not look at the location of a particular applicant or even the service area that they serve.”

Begich says none of that made it to Alaska.  He says most of the tax credits go to heavily populated areas and, although there are many who need assistance in Alaska, communities are spread out and don’t have a history of investment.

“Again we haven’t received any New Market Tax Credits since 2009. Which, to be frank with you, is very problematic for a state that has half the tribes of the nation, maybe not by population but by tribes. One fifth the size by mass of the state and very remote and very tough economic issues in some of our communities. But when half the tribes in the nation can’t get access to it, that’s a problem.”

Nolan goes on to say that although the state of Alaska has not received any funding directly from the New Market Tax Credit, from 2010-2012 Alaska did receive $174.6 million from outside Community Development Entities. 

Begich says with some rural Alaska villages facing upwards of 70 percent unemployment funding like the New Market Tax Credit would be a powerful tool to stimulate economic development.  He also mentioned these concerns in a letter he wrote to Treasurer Secretary Jack Lew.