Through the Tax Credit Program, also known as the Community Development Investment Program (CDIP), CDFA grants state tax credit awards on a competitive basis to qualified organizations for specific projects or programs. CDFA is attracted to innovative projects that show a high degree of community support, build partnerships, and leverage other funds.

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All approved CDIP project sponsors must raise the money for their project within an allocated time frame. CDFA issues tax credits totaling 75% of the value of each donation to the project donors. For example, a donor making a $100,000 donation to CDFA on behalf of an approved project will receive a state tax credit in the amount of $75,000.

The tax credit may be applied against the business profits tax, business enterprise tax, and/or the insurance premium tax. The donation also may be eligible for treatment as a state and federal charitable contribution. By law, CDFA is restricted to providing support to nonprofit community development organizations, cooperatives, and some municipal entities. Legislation permits CDFA to accept donations of up to $5 million in each state fiscal year in exchange for $3.75 million in state tax credits for CDFA approved community development projects.

The tax credit award process is highly competitive because the credits are both limited and desirable. Periodically during the course of a year as funds become available under the annual $5 million limit, CDFA will announce that it is accepting proposals for community development projects. Successful applicants may receive an award of investment tax credits for a single state fiscal year or for multiple state fiscal years.

Each project is considered both separately on its own merits and as it compares to the other projects submitted at the same time. In addition to specific project criteria imposed by the Board of Directors from time to time, the following are essential:

• CDFA must determine that both the sponsor organization and nature of the project fit the requirements of RSA 162-L.
  
  
• The project must be reasonably expected to contribute to the development or redevelopment and economic well-being of target areas or target populations as defined by the statute and interpreted by CDFA Board of Directors, to contribute to the economic development of the state, to increase or maintain threatened primary employment, or to provide affordable housing opportunities to low and moderate income people.
  
  
• The project must meet a public purpose and provide a public benefit. Such benefits shall be quantifiable and must be presented to the Board of Directors at time of application in a form acceptable to CDFA.
  
  
• Private industry shall not have provided sufficient capital required for the project or sufficient primary employment opportunities in the project’s area.
  
  
• The CDFA shall determine that its participation is necessary to the successful completion of the proposed project and adequate funding is determined to be unavailable in traditional capital markets.
  
  
• The ownership structure of the project shall guarantee long-term conformance to RSA 162-L and must allow certain CDFA-imposed legal mechanism such as deed restrictions, equity limitation formulas, or land leases.
  
  
• The project must provide evidence that it has a reasonable chance to succeed — funding commitments, public support, organizational capacity, and sufficient capital for sustained operations.
  
  
• The project must conform to all applicable environmental, zoning, building, planning, or sanitation laws.
  

Projects are responsible for raising the donations from businesses that are entitled to state tax credits. CDFA works closely with each project to determine the date of receipt for each donation during the course of a state fiscal year, so that total donations to CDFA for all projects in one state fiscal year do not exceed the cap of $5 million. Projects may be ‘high risk’ and rely on other sources of funding, both public and private, for completion. In the case of project failure or stagnation, CDFA reserves the right to reallocate unexpended funds or uncollected funds to other new projects or initiatives in the future.

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