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

Clarify and review the application and submission process 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 Session Objectives

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.

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.

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)

NAP SPP 75% tax credit 55 % 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 $1.25M max) No minimum amount 55 % tax credit One project One year commitment $500,000 max tax credit (3 or more projects $1.25 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

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

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

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

To formulate your application, consider and explain “The Four P’s”: 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

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

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

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

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

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.

What type of State taxes can NAP credits be applied against? 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 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

NAP Tax Credit Application “Content”

NAP Tax Credit Application “Content”

General Info $18M 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

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

Impact Services

Impact Services

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 John Winters Deputy Regional Director Human Resources Development Specialist Phone: 215-560-3793  | mshorr@pa.gov Phone: 717- 720-1471 | johwinters@pa.gov