[Federal Register Volume 75, Number 67 (Thursday, April 8, 2010)]
[Notices]
[Pages 18016-18026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8008]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Notice of Allocation Availability (NOAA) Inviting Applications
for the CY 2010 Allocation Round of the New Markets Tax Credit Program
Funding Opportunity Title: Notice of Allocation Availability (NOAA)
Inviting Applications for the CY 2010 Allocation Round of the New
Markets Tax Credit Program.
Announcement Type: Initial announcement of tax credit allocation
availability.
DATES: Electronic applications must be received by 5 p.m. ET on June 2,
2010. Applications sent by mail, facsimile or other form will not be
accepted. Please note the Community Development Financial Institutions
Fund (the CDFI Fund) will only accept applications and attachments
(i.e., signature page, investor letters and organizational charts) in
electronic form (see Section IV.D. of this NOAA for more details).
Applications must meet all eligibility and other requirements and
deadlines, as applicable, set forth in this NOAA. Allocation applicants
that are not yet certified as Community Development Entities (CDEs)
must submit an application for certification as a CDE that is
postmarked on or before April 23, 2010 (see Section III of this NOAA
for more details).
Executive Summary: Subject to authorization from Congress in 2010,
this NOAA is issued in connection with the calendar year 2010 tax
credit allocation round of the New Markets Tax Credit (NMTC) Program,
as initially authorized by Title I, subtitle C, section 121 of the
Community Renewal Tax Relief Act of 2000 (Pub. L. 106-554) and amended
by section 221 of the American Jobs Creation Act of 2004 (Pub. L. 108-
357), section 101 of the Gulf Opportunity Zone Act of 2005 (Pub. L.
108-357), and Division A, section 102 of the Tax Relief and Health Care
Act of 2006 (Pub. L. 109-432) (the Act). Through the NMTC Program, the
CDFI Fund provides authority to CDEs to offer an incentive to investors
in the form of tax credits over seven years, which is expected to
stimulate the provision of private investment capital that, in turn,
will facilitate economic and community development in Low-Income
Communities. Through this NOAA, the CDFI Fund announces, subject to
authorization, the availability of up to $5 billion of NMTC authority
authorized by the Act.
In this NOAA, the CDFI Fund specifically addresses how an entity
may apply to receive an allocation of NMTCs, the competitive procedure
through which NMTC Allocations will be made, and the actions that will
be taken to ensure that proper allocations are made to appropriate
entities.
I. Allocation Availability Description
A. Programmatic Changes
1. Allocation Amounts: As described in Section IIA, the CDFI Fund
anticipates that it will provide allocation awards of not more than
$150 million per applicant.
2. Prior QEI Issuance Requirements: In order to be eligible to
apply for NMTC allocations in the 2010 round, as described in Section
III.A.2(a), applicants that have received NMTC allocation awards in
previous rounds
[[Page 18017]]
are required to meet minimum Qualified Equity Investment (QEI) issuance
thresholds with respect to their prior-year allocations. These
thresholds have been revised in comparison to the 2009 NOAA.
3. Affiliated Governmental Entities: As stated in Section III.A.4
of the NOFA, in certain circumstances, the CDFI Fund may allow multiple
entities that are Controlled by the same governmental entity to submit
applications in the same round.
4. Electronic Application Submission: As stated in Sections III.C
and III.D of this NOFA, the CDFI Fund will require the application and
all attachments to the application to be submitted electronically.
5. Application Selection Criteria: In August of 2009, in accordance
with the requirements of the Paperwork Reduction Act (PRA), 74 FR
38482, the CDFI Fund solicited public comments with respect to the NMTC
application. As a result of comments received, the CDFI Fund has
modified the contents of its application form and, in some cases, its
application review criteria. These modifications are reflected in
Section V.A of this NOAA.
6. Ensuring Rural Proportionality: As stated in Section V.C of this
NOFA, the CDFI Fund may enlarge the applicant review pool to include
more Rural CDEs, if necessary to ensure that 20 percent of the
aggregate NMTC investments are made in non-metropolitan areas.
B. Program guidance and regulations: This NOAA provides guidance
for the application and allocation of NMTCs for the eighth round of the
NMTC Program and should be read in conjunction with: (i) Guidance
published by the CDFI Fund on how an entity may apply to become
certified as a CDE (66 FR 65806, December 20, 2001); (ii) the final
regulations issued by the Internal Revenue Service (26 CFR 1.45D-1,
published on December 28, 2004) and related guidance, notices and other
publications; and (iii) the application and related materials for this
eighth NMTC Program allocation round. All such materials may be found
on the CDFI Fund's Web site at http://www.cdfifund.gov. The CDFI Fund
encourages applicants to review these documents. Capitalized terms
used, but not defined, in this NOAA shall have the respective meanings
assigned to them in the allocation application, IRC Sec. 45D or the
IRS regulations.
II. Allocation Information
A. Allocation amounts: Pursuant to the Act, the CDFI Fund expects
that it may allocate to CDEs the authority to issue to their investors
up to the aggregate amount of $5.0 billion in equity as to which NMTCs
may be claimed, as permitted under IRC Sec. 45D(f)(1)(D). Pursuant to
this NOAA, the CDFI Fund anticipates that it will not issue more than
$150 million in tax credit allocation authority per applicant. The CDFI
Fund, in its sole discretion, reserves the right to allocate amounts in
excess of or less than the anticipated maximum allocation amount should
the CDFI Fund deem it appropriate. In order to receive an allocation in
excess of the $150 million cap, an applicant, at a minimum, will need
to demonstrate that: (i) No part of its strategy can be successfully
implemented without an allocation in excess of the applicable cap; and/
or (ii) its strategy will produce extraordinary community impact. The
CDFI Fund reserves the right to allocate tax credit authority to any,
all, or none of the entities that submit an application in response to
this NOAA, and in any amount it deems appropriate.
B. Types of awards: NMTC Program awards are made in the form of tax
credit authority.
C. Allocation Agreement: Each Allocatee under this NOAA must sign
an Allocation Agreement before the NMTC Allocation is effective. The
Allocation Agreement contains the terms and conditions of the
allocation. For further information, see Section VI of this NOAA.
III. Eligibility
A. Eligible applicants: IRC Sec. 45D specifies certain eligibility
requirements that each applicant must meet to be eligible to apply for
an allocation of NMTCs. The following sets forth additional detail and
certain additional dates that relate to the submission of applications
under this NOAA for the $5.0 billion in general NMTC allocation
authority.
1. CDE certification: For purposes of this NOAA, the CDFI Fund will
not consider an application for an allocation of NMTCs unless: (a) The
applicant is certified as a CDE at the time the CDFI Fund receives its
NMTC Program allocation application; or (b) the applicant submits an
application for certification as a CDE that is postmarked on or before
April 26, 2010. Applicants for certification may obtain a CDE
certification application through the CDFI Fund's Web site at http://www.cdfifund.gov. Applications for CDE certification must be submitted
as instructed in the application form. An applicant that is a community
development financial institution (CDFI) or a specialized small
business investment company (SSBIC) does not need to submit a CDE
certification application; however, it must register as a CDE on the
CDFI Fund's Web site on or before 5 p.m. ET on April 26, 2010.
The CDFI Fund will not provide allocations of NMTCs to applicants
that are not certified as CDEs. See Section IV.D.1.(c) of this NOAA for
further requirements relating to postmarks.
If an applicant that has already been certified as a CDE wishes to
change its designated CDE service area, it must submit its request for
such a change to the CDFI Fund; and the request must be received by the
CDFI Fund by 5 p.m. ET on June 2, 2010. The CDE service area change
request must be sent from the applicant's authorized representative and
include the applicable CDE control number, the revised service area
designation, and an updated accountability chart that reflects
representation from Low-Income Communities in the revised service area.
The service area change request must be sent by e-mail to
[email protected] or by facsimile to (202) 622-7754.
2. Prior awardees or Allocatees: Applicants must be aware that
success in a prior round of any of the CDFI Fund's programs is not
indicative of success under this NOAA. For purposes of this section,
the CDFI Fund will consider an Affiliate to be any entity that meets
the definition of Affiliate as defined in the NMTC allocation
application materials, or any entity otherwise identified as an
Affiliate by the applicant in its NMTC allocation application
materials. Prior awardees of any CDFI Fund Program are eligible to
apply under this NOAA, except as follows:
(a) Prior Allocatees and Qualified Equity Investment (QEI) issuance
requirements: The following describes the QEI issuance requirements
applicable to prior Allocatees.
A prior Allocatee in the second round of the NMTC Program (CY 2003-
2004) is not eligible to receive a NMTC Allocation pursuant to this
NOAA unless the Allocatee is able to affirmatively demonstrate that, as
of 11:59 p.m. ET on July 21, 2010, it has issued and received funds in-
hand (the term ``funds in-hand'' does not include committed funding)
from its investors for 95 percent of its QEIs relating to its CY 2003-
2004 NMTC Allocation.
A prior Allocatee in the third round of the NMTC Program (CY 2005)
is not eligible to receive a NMTC Allocation pursuant to this NOAA
unless the Allocatee is able to affirmatively demonstrate that, as of
11:59 p.m. ET on July 21, 2010, it has: (i) Issued and received funds
in-hand from its investors for at least 80 percent of its
[[Page 18018]]
QEIs relating to its CY 2005 NMTC Allocation; or (ii) issued and
received funds in-hand from its investors for at least 60 percent of
its QEIs and that 100 percent of its total CY 2005 NMTC Allocation has
been exchanged for funds in-hand from investors, or has been committed
by its investors.
A prior Allocatee in the fourth round of the NMTC Program (CY 2006)
is not eligible to receive a NMTC Allocation pursuant to this NOAA
unless the Allocatee is able to affirmatively demonstrate that, as of
11:59 p.m. ET on July 21, 2010, it has: (i) Issued and received funds
in-hand from its investors for at least 60 percent of its QEIs relating
to its CY 2006 NMTC Allocation; or (ii) issued and received funds in-
hand from its investors for at least 50 percent of its QEIs and that at
least 80 percent of its total CY 2006 NMTC Allocation has been
exchanged for funds in-hand from investors, or has been committed by
its investors.
A prior Allocatee in the fifth round of the NMTC Program (CY 2007)
is not eligible to receive a NMTC Allocation pursuant to this NOAA
unless the Allocatee is able to affirmatively demonstrate that, as of
11:59 p.m. ET on July 21, 2010, it has: (i) Issued and received funds
in-hand from its investors for at least 50 percent of its QEIs relating
to its CY 2007 NMTC Allocation; or (ii) issued and received funds in-
hand from its investors for at least 40 percent of its QEIs and that at
least 80 percent of its total CY 2007 NMTC Allocation has been
exchanged for funds in-hand from investors, or has been committed by
its investors.
A prior Allocatee (with the exception of a Rural CDE Allocatee) in
the sixth round of the NMTC Program (CY 2008) is not eligible to
receive a NMTC Allocation pursuant to this NOAA unless the Allocatee is
able to affirmatively demonstrate that, as of 11:59 p.m. ET on July 21,
2010, it has: (i) Issued and received funds in-hand from its investors
for at least 30 percent of its QEIs relating to its CY 2008 NMTC
Allocation; or (ii) issued and received funds in-hand from its
investors for at least 20 percent of its QEIs and that at least 60
percent of its total CY 2008 NMTC Allocation has been exchanged for
funds in-hand from investors, or has been committed by its investors. A
prior Rural CDE Allocatee in the sixth round is not eligible to receive
a NMTC Allocation pursuant to this NOAA unless the Allocatee can
demonstrate that, as of 11:59 p.m. ET on July 21, 2010, it has: (i)
Issued and received funds in-hand from its investors for at least 20
percent of its QEIs relating to its CY 2008 NMTC Allocation.
A prior Allocatee (with the exception of a Rural CDE Allocatee) in
the seventh round of the NMTC Program (CY 2009) is not eligible to
receive a NMTC Allocation pursuant to this NOAA unless the Allocatee is
able to affirmatively demonstrate that, as of 11:59 p.m. ET on July 21,
2010, it has: (i) Issued and received funds in-hand from its investors
for at least 20 percent of its QEIs relating to its CY 2009 NMTC
Allocation; or (ii) issued and received funds in-hand from its
investors for at least 10 percent of its QEIs and that at least 30
percent of its total CY 2009 NMTC Allocation has been exchanged for
funds in-hand from investors, or has been committed by its investors. A
Rural CDE is not required to meet the above QEI issuance and commitment
thresholds with regard to its 2009 NMTC allocation award.
In addition to the requirements described above, an entity is not
eligible to receive a NMTC Allocation pursuant to this NOAA if an
Affiliate of the applicant is a prior Allocatee and has not met the
requirements for the issuance and/or commitment of QEIs as set forth
above for the Allocatees in the prior allocation rounds of the NMTC
Program.
Notwithstanding the above, if an applicant has received multiple
NMTC allocation awards between the second round (CY 2003/2004) and the
seventh round (CY 2009), the applicant shall be deemed to be eligible
to apply for a NMTC Allocation pursuant to this NOAA if the applicant
is able to affirmatively demonstrate that, as of 11:59 p.m. ET on July
21, 2010, it has issued and received funds in-hand from its investors
for at least 60 percent of its QEIs relating to its cumulative
allocation amounts from these prior NMTC Program rounds. Rural CDEs
that received allocations under the sixth round (CY 2008) may choose to
exclude such allocations from this cumulative calculation, provided
that the Allocatee has issued and received funds in-hand from its
investors for at least 20 percent of its QEIs relating to its CY 2008
allocation. Rural CDEs that received allocations under the seventh
round (CY2009) may choose to exclude such allocation from this
cumulative calculation.
For purposes of this section of the NOAA, the CDFI Fund will only
recognize as ``issued'' those QEIs that have been finalized in the CDFI
Fund's Allocation Tracking System (ATS) by the deadlines specified
above. Allocatees and their Subsidiary transferees, if any, are advised
to access ATS to record each QEI that they issue to an investor in
exchange for funds in-hand. For purposes of this section of the NOAA,
``committed'' QEIs are only those Equity Investments that are evidenced
by a written, signed document in which an investor: (i) Commits to make
an investment in the Allocatee in a specified amount and on specified
terms; (ii) has made an initial disbursement of the investment proceeds
to the Allocatee, and such initial disbursement has been recorded in
ATS as a QEI; (iii) commits to disburse the remaining investment
proceeds to the Allocatee based on specified amounts and payment dates;
and (iv) commits to make the final disbursement to the Allocatee no
later than July 21, 2012.
The applicant will be required, upon notification from the CDFI
Fund, to submit adequate documentation to substantiate the required
issuances of and commitments for QEIs.
Applicants should be aware that these QEI issuance requirements
represent the minimum threshold requirements that must be met in order
to submit an application for assistance under this NOAA. As stated in
Section V.B.2 of this NOAA, the CDFI Fund reserves the right to reject
an application and/or adjust award amounts as appropriate based on
information obtained during the review process--including an
applicant's track record of raising QEIs and/or deploying its QLICIs.
Prior Allocatees that require any action by the CDFI Fund (e.g.,
certifying a subsidiary entity as a CDE; adding a subsidiary CDE to an
Allocation Agreement; etc.) in order to meet the QEI issuance
requirements above must submit their requests by no later than May 21,
2010 in order to guarantee that the CDFI Fund completes all necessary
approvals prior to July 21, 2010. Applicants for certification may
obtain a CDE certification application through the CDFI Fund's Web site
at http://www.cdfifund.gov. Applications for CDE certification must be
submitted as instructed in the application form.
(b) Failure to meet reporting requirements: The CDFI Fund will not
consider an application submitted by an applicant if the applicant or
any of its Affiliates is a prior CDFI Fund awardee or Allocatee under
any CDFI Fund program and is not current on the reporting requirements
set forth in a previously executed assistance, allocation or award
agreement(s), as of the application deadline of this NOAA. Please note
that the CDFI Fund only acknowledges the receipt of reports that are
complete. As such, incomplete reports or reports that are deficient of
required elements will not be recognized as having been received.
[[Page 18019]]
(c) Pending resolution of noncompliance: If an applicant is a prior
awardee or Allocatee under any CDFI Fund program and if: (i) It has
submitted complete and timely reports to the CDFI Fund that demonstrate
noncompliance with a previous assistance, award or Allocation
Agreement; and (ii) the CDFI Fund has yet to make a final determination
as to whether the entity is in default of its previous assistance,
award or Allocation Agreement, the CDFI Fund will consider the
applicant's application under this NOAA pending full resolution of the
noncompliance, in the sole determination of the CDFI Fund. Further, if
an Affiliate of the applicant is a prior CDFI Fund awardee or Allocatee
and if such entity: (i) Has submitted complete and timely reports to
the CDFI Fund that demonstrate noncompliance with a previous
assistance, award or Allocation Agreement; and (ii) the CDFI Fund has
yet to make a final determination as to whether the entity is in
default of its previous assistance, award or Allocation Agreement, the
CDFI Fund will consider the applicant's application under this NOAA
pending full resolution of the noncompliance, in the sole determination
of the CDFI Fund.
(d) Default status: The CDFI Fund will not consider an application
submitted by an applicant that is a prior CDFI Fund awardee or
Allocatee under any CDFI Fund program if, as of the application
deadline of this NOAA, the CDFI Fund has made a final determination
that such applicant is in default of a previously executed assistance,
allocation or award agreement(s) and the CDFI Fund has provided written
notification of such determination to such applicant.
Further, an entity is not eligible to apply for an allocation
pursuant to this NOAA if, as of the application deadline of this NOAA,
the CDFI Fund has made a final determination that an Affiliate of the
Applicant is a prior CDFI Fund awardee or Allocatee under any CDFI Fund
program and has been determined by the CDFI Fund to be in default of a
previously executed assistance, allocation or award agreement(s) and
the CDFI Fund has provided written notification of such determination.
Such entities will be ineligible to apply for an award pursuant to this
NOAA so long as the Applicant's, or its Affiliate's, prior award or
allocation remains in default status or such other time period as
specified by the CDFI Fund in writing.
(e) Termination in default: The CDFI Fund will not consider an
application submitted by an applicant that is a prior CDFI Fund awardee
or Allocatee under any CDFI Fund program if: (i) Within the 12-month
period prior to the application deadline of this NOAA, the CDFI Fund
has made a final determination that such applicant's prior award or
allocation terminated in default of a previously executed assistance,
allocation or award agreement(s); (ii) the CDFI Fund has provided
written notification of such determination to such applicant; and (iii)
the final reporting period end date for the applicable terminated
assistance, allocation or award agreement(s) falls within the 12-month
period prior to the application deadline of this NOFA.
Further, an entity is not eligible to apply for an allocation
pursuant to this NOAA if: (i) Within the 12-month period prior to the
application deadline of this NOAA, the CDFI Fund has made a final
determination that an Affiliate of the Applicant is a prior CDFI Fund
awardee or Allocatee under any CDFI Fund program whose award or
allocation terminated in default of a previously executed assistance,
allocation or award agreement(s); (ii) the CDFI Fund has provided
written notification of such determination to the defaulting entity;
and (iii) the final reporting period end date for the applicable
terminated assistance, allocation or award agreement(s) falls within
the 12-month period prior to the application deadline of this NOAA.
(f) Undisbursed award funds: The CDFI Fund will not consider an
application submitted by an applicant that is a prior CDFI Fund Awardee
under any CDFI Fund program if the Applicant has a balance of
undisbursed award funds (defined below) under said prior award(s), as
of the applicable application deadline of this NOAA. Furthermore, an
entity is not eligible to apply for an award pursuant to this NOAA if
an Affiliate of the Applicant is a prior CDFI Fund Awardee under any
CDFI Fund program, and has a balance of undisbursed award funds under
said prior award(s), as of the applicable application deadline of this
NOAA. In a case where an Affiliate of the Applicant is a prior CDFI
Fund Awardee under any CDFI Fund program and has a balance of
undisbursed award funds under said prior award(s) as of the applicable
application deadline of this NOAA, the CDFI Fund will include the
combined awards of the Applicant and such Affiliated entities when
calculating the amount of undisbursed award funds.
For purposes of the calculation of undisbursed award funds for the
BEA Program, only awards made to the Applicant (and any Affiliates)
three to five calendar years prior to the end of the calendar year of
the application deadline of this NOAA are included (``includable BEA
awards''). Thus, for purposes of this NOAA, undisbursed BEA Program
award funds are the amount of FYs 2005, 2006 and 2007 awards that
remain undisbursed as of the application deadline of this NOAA.
For purposes of the calculation of undisbursed award funds for the
CDFI Program and the Native Initiatives Funding Programs, only awards
made to the Applicant (and any entity that Controls the Applicant, is
Controlled by the Applicant or shares common management officials with
the Applicant, as determined by the CDFI Fund) two to five calendar
years prior to the end of the calendar year of the application deadline
of this NOAA are included (``includable CDFI/NI awards''). Thus, for
purposes of this NOAA, undisbursed CDFI Program and Native Initiative
(NI) awards are the amount of FYs 2005, 2006, 2007 and 2008 awards that
remain undisbursed as of the application deadline of this NOAA.
To calculate total includable BEA/CDFI/NI awards: amounts that are
undisbursed as of the application deadline of this NOAA cannot exceed
five percent (5%) of the total includable awards. Please refer to an
example of this calculation in the 2010 Allocation Application Q&A
document, available on the CDFI Fund's Web site.
The ``undisbursed award funds'' calculation does not include: (i)
Tax credit allocation authority made available through the New Market
Tax Credit (NMTC) Program; (ii) any award funds for which the CDFI Fund
received a full and complete disbursement request from the Awardee by
the applicable application deadline of this NOAA; (iii) any award funds
for an award that has been terminated, in writing, by the CDFI Fund or
deobligated by the CDFI Fund; or (iv) any award funds for an award that
does not have a fully executed assistance or award agreement. The CDFI
Fund strongly encourages Applicants requesting disbursements of
``undisbursed funds'' from prior awards to provide the CDFI Fund with a
complete disbursement request at least 30 business days prior to the
application deadline of this NOAA.
(g) Contact the CDFI Fund: Accordingly, Applicants that are prior
awardees and/or Allocatees under any other CDFI Fund program are
advised to: (i) Comply with the requirements specified in assistance,
allocation and/or award agreement(s), and (ii) contact the CDFI Fund to
ensure that all necessary actions are underway for the disbursement of
any outstanding
[[Page 18020]]
balance of a prior award(s). All outstanding reports and compliance
questions should be directed to the Compliance Manager by e-mail at
[email protected], by telephone at (202) 622-8453, or by facsimile at
(202) 622-8728. All disbursement questions should be directed to the
CDFI Fund's Senior Resource Manager by telephone at (202) 622-7165 or
by facsimile at (202) 622-8728. Requests submitted less than thirty
calendar days prior to the application deadline may not receive a
response before the application deadline.
Both the Compliance Manager and the Senior Resource Manager may be
reached by mail at CDFI Fund, 601 13th Street, NW., Suite 200 South,
Washington, DC 20005.
The CDFI Fund will respond to Applicants' reporting, compliance or
disbursement questions between the hours of 9 a.m. and 5 p.m. ET,
starting the date of publication of this NOAA through May 31, 2010 (two
days before the application deadline). The CDFI Fund will not respond
to Applicants' reporting, compliance or disbursement phone calls or e-
mail inquiries that are received after 5 p.m. ET on May 31, 2010 until
after the funding application deadline of June 2, 2010.
3. Entities that propose to transfer NMTCs to Subsidiaries: Both
for-profit and non-profit CDEs may apply to the CDFI Fund for
allocations of NMTCs, but only a for-profit CDE is permitted to provide
NMTCs to its investors. A non-profit applicant wishing to apply for a
NMTC Allocation must demonstrate, prior to entering into an Allocation
Agreement with the CDFI Fund, that: (i) It controls one or more
Subsidiaries that are for-profit entities; and (ii) it intends to
transfer the full amount of any NMTC Allocation it receives to said
Subsidiary.
An applicant wishing to transfer all or a portion of its NMTC
Allocation to a Subsidiary is not required to create the Subsidiary
prior to submitting a NMTC allocation application to the CDFI Fund.
However, the Subsidiary entities must be certified as CDEs by the CDFI
Fund, and enjoined as parties to the Allocation Agreement at closing or
by amendment to the Allocation Agreement after closing. Before the NMTC
Allocation transfer may occur it must be pre-approved by the CDFI Fund,
in its sole discretion.
The CDFI Fund strongly encourages a non-profit applicant to submit
a CDE certification application to the CDFI Fund on behalf of the
Subsidiary within 30 days after the non-profit applicant receives the
draft Allocation Agreement from the CDFI Fund; as such Subsidiary must
be certified as a CDE prior to entering into an Allocation Agreement
with the CDFI Fund. A non-profit applicant that fails to certify one or
more for-profit subsidiaries within 30 days of receiving the draft
Allocation Agreement from the CDFI Fund is subject to the CDFI Fund
rescinding the award.
4. Entities that submit applications together with Affiliates;
applications from common enterprises: (a) As part of the allocation
application review process, the CDFI Fund considers whether applicants
are Affiliates, as such term is defined in the allocation application.
If an applicant and its Affiliates wish to submit allocation
applications, they must do so collectively, in one application; an
applicant and its Affiliates may not submit separate allocation
applications. If Affiliated entities submit multiple applications, the
CDFI Fund reserves the right either to reject all such applications
received or to select a single application as the only application
considered for an allocation. In the case of governmental entities, the
CDFI Fund may accept applications submitted by Affiliated entities, but
only to the extent the CDFI Fund determines that the business
strategies and/or activities described in such applications, submitted
by separate entities, are distinctly dissimilar and are operated and/or
managed by distinctly dissimilar boards and staff, including identified
consultants. In such cases, the CDFI Fund reserves the right to limit
award amounts to such entities to ensure that the entities do not
collectively receive more than the $150 million cap for any single
entity.
For purposes of this NOAA, in addition to assessing whether
applicants meet the definition of the term ``Affiliate'' found in the
allocation application, the CDFI Fund will consider: (i) Whether the
activities described in applications submitted by separate entities
are, or will be, operated and/or managed as a common enterprise that,
in fact or effect, may be viewed as a single entity; (ii) whether the
applications submitted by separate entities contain significant
narrative, textual or other similarities, and (iii) whether the
business strategies and/or activities described in applications
submitted by separate entities are so closely related, in fact or
effect, they may be viewed as substantially identical applications. In
such cases, the CDFI Fund reserves the right either to reject all
applications received from all such entities; to select a single
application as the only one that will be considered for an allocation;
and, in the event that an Application is selected to receive an
allocation award, to deem certain activities ineligible. These
requirements shall apply to all applicants, including those that are
Affiliated with governmental entities.
(b) Furthermore, an applicant that receives an allocation in this
allocation round (or its Subsidiary transferee) may not become an
Affiliate of or member of a common enterprise (as defined above) with
another applicant that receives an allocation in this allocation round
(or its Subsidiary transferee) at any time after the submission of an
allocation application under this NOAA. This prohibition, however,
generally does not apply to entities that are commonly Controlled
solely because of common ownership by QEI investors. This requirement
will also be a term and condition of the Allocation Agreement (see
Section VI.B. of this NOAA and additional application guidance
materials on the CDFI Fund's Web site at http://www.cdfifund.gov for
more details).
5. Entities created as a series of funds: An applicant whose
business structure consists of an entity with a series of funds may
apply for CDE certification as a single entity, or as multiple
entities. If such an applicant represents that it is properly
classified for Federal tax purposes as a single partnership or
corporation, it may apply for CDE certification as a single entity. If
an applicant represents that it is properly classified for Federal tax
purposes as multiple partnerships or corporations, then it may submit a
single CDE certification application on behalf of the entire series of
funds, and each fund must be separately certified as a CDE. Applicants
should note, however, that receipt of CDE certification as a single
entity or as multiple entities is not a determination that an applicant
and its related funds are properly classified as a single entity or as
multiple entities for Federal tax purposes. Regardless of whether the
series of funds is classified as a single partnership or corporation or
as multiple partnerships or corporations, an applicant may not transfer
any NMTC Allocations it receives to one or more of its funds unless the
transfer is pre-approved by the CDFI Fund, in its sole discretion,
which will be a condition of the Allocation Agreement.
6. Entities that are BEA Program awardees: An insured depository
institution investor (and its Affiliates and Subsidiaries) may not
receive a NMTC Allocation in addition to a BEA Program award for the
same investment in a CDE. Likewise, an insured depository institution
investor (and its Affiliates and Subsidiaries) may not
[[Page 18021]]
receive a BEA Program award in addition to a NMTC Allocation for the
same investment in a CDE.
IV. Application and Submission Information
A. Address to request application package: Applicants must submit
applications electronically under this NOAA, through the CDFI Fund Web
site. Following the publication of this NOAA, the CDFI Fund will make
the electronic allocation application available on its Web site at
http://www.cdfifund.gov. Applications sent by mail, facsimile or other
form will not be accepted. Please note the CDFI Fund will only accept
the application and attachments (i.e. signature page, investor letters
and organizational charts) in electronic form.
B. Application content requirements: Detailed application content
requirements are found in the application related to this NOAA.
Applicants must submit all materials described in and required by the
application by the applicable deadlines. Applicants will not be
afforded an opportunity to provide any missing materials or
documentation. Electronic applications must be submitted solely by
using the format made available at the CDFI Fund's Web site. Additional
information, including instructions relating to the submission of
supporting information (i.e., signature page, investor letters and
organizational charts), is set forth in further detail in the
electronic application. An application must include a valid and current
Employer Identification Number (EIN) issued by the Internal Revenue
Service and assigned to the applicant and, if applicable, its
Controlling Entity. Electronic applications without a valid EIN are
incomplete and cannot be transmitted to the CDFI Fund. For more
information on obtaining an EIN, please contact the Internal Revenue
Service at (800) 829-4933 or www.irs.gov.
An applicant may not submit more than one application in response
to this NOAA. In addition, as stated in Section III.A.4 of this NOAA,
an applicant and its Affiliates must collectively submit only one
allocation application; an applicant and its Affiliates may not submit
separate allocation applications except as outlined above. Once an
application is submitted, an applicant will not be allowed to change
any element of its application.
C. Form of application submission: Applicants may only submit
applications under this NOAA electronically. Applications sent by
facsimile or by e-mail will not be accepted. Submission of an
electronic application will facilitate the processing and review of
applications and the selection of Allocatees; further, it will assist
the CDFI Fund in the implementation of electronic reporting
requirements.
1. Electronic applications: Electronic applications must be
submitted solely by using the CDFI Fund's Web site and must be sent in
accordance with the submission instructions provided in the electronic
application form. Applicants will need access to Internet Explorer 5.5
or higher, Windows 98 or higher (or other system compatible with the
above Explorer software) and optimally at least a 56Kbps Internet
connection in order to meet the electronic application submission
requirements. The CDFI Fund's electronic application system will only
permit the submission of applications in which all required questions
and tables are fully completed. Additional information, including
instructions relating to the submission of supporting information
(i.e., signature page, investor letters and organizational charts) is
set forth in further detail in the electronic application.
D. Application submission dates and times:
1. Application deadlines:
(a) Electronic applications: must be received by 5 p.m. ET on June
2, 2010. Electronic applications cannot be transmitted or received
after 5 p.m. ET on June 2, 2010. In addition, applicants that submit
electronic applications must separately submit supporting information
(i.e., signature page, investor letters and organizational charts) via
their myCDFIFund account. The signature page, investor letters and
organizational charts must be submitted on or before June 4, 2010. See
application instructions, provided in the electronic application, for
further detail. Applications and other required documents received
after this date and time will be rejected. If the signature page,
investor letters and organizational charts are not received by the
deadline specified above, the application will be rejected. Please note
that the document submission deadlines in this NOAA and/or the
allocation application are strictly enforced.
(b) Postmark: For purposes of this NOAA, the term ``postmark'' is
defined by 26 CFR 301.7502-1. In general, the CDFI Fund will require
that the postmarked document bear a postmark date that is on or before
the applicable deadline. The document must be in an envelope or other
appropriate wrapper, properly addressed as set forth in this NOAA and
delivered by the United States Postal Service or any other private
delivery service designated by the Secretary of the Treasury. For more
information on designated delivery services, please see IRS Notice
2002-62, 2002-2 C.B. 574.
E. Intergovernmental Review: Not applicable.
F. Funding Restrictions: For allowable uses of investment proceeds
related to a NMTC Allocation, please see 26 U.S.C. 45D and the final
regulations issued by the Internal Revenue Service (26 CFR 1.45D-1,
published December 28, 2004) and related guidance. Please see Section
I, above, for the Programmatic Changes of this NOAA.
V. Application Review Information
There are two parts to the substantive review process for each
allocation application: Phase 1 and Phase 2. In Phase 1, the CDFI Fund
will evaluate each application, assigning points and numeric scores
according to the criteria described below. In Phase 2, the CDFI Fund
will rank applicants in accordance with the procedures set forth below.
A. Criteria:
1. Business Strategy (25-point maximum): (a) When assessing an
applicant's business strategy, reviewers will consider, among other
things: The applicant's products, services and investment criteria; the
prior performance of the applicant or its Controlling Entity,
particularly as it relates to making similar kinds of investments as
those it proposes to make with the proceeds of QEIs; the applicant's
prior performance in providing capital or technical assistance to
disadvantaged businesses or communities; the projected level of the
applicant's pipeline of potential investments; the extent to which the
applicant intends to make Qualified Low-Income Community Investments
(QLICIs) in one or more businesses in which persons unrelated to the
entity hold a majority equity interest; and the extent to which
applicants that otherwise have notable relationships with the QALICBs
financed will create benefits (beyond those created in the normal
course of a NMTC transaction) to Low-Income Communities.
Under the Business Strategy criterion, an applicant will generally
score well to the extent that it will deploy debt or investment capital
in products or services which: (i) Are designed to meet the needs of
underserved markets; (ii) are flexible or non-traditional in form and
on better terms than available in the marketplace; and (iii) focus on
customers or partners that typically lack access to conventional
sources of capital. An applicant will also score well to the extent
that, among other
[[Page 18022]]
things, it: (i) Has a track record of successfully providing products
and services similar to those it intends to use with the proceeds of
QEIs; (ii) has identified, or has a process for identifying, potential
transactions; (iii) demonstrates a likelihood of issuing QEIs and
making the related QLICIs in a time period that is significantly
shorter than the 5-year period permitted under IRC Sec. 45D(b)(1); and
(iv) in the case of an applicant proposing to purchase loans from CDEs,
the applicant will require the CDE selling such loans to re-invest the
proceeds of the loan sale to provide additional products and services
to Low-Income Communities.
(b) Priority Points: In addition, as provided by IRC Sec.
45D(f)(2), the CDFI Fund will ascribe additional points to entities
that meet one or both of the statutory priorities. First, the CDFI Fund
will give up to five (5) additional points to any applicant that has a
record of having successfully provided capital or technical assistance
to disadvantaged businesses or communities. Second, the CDFI Fund will
give five (5) additional points to any applicant that intends to
satisfy the requirement of IRC Sec. 45D(b)(1)(B) by making QLICIs in
one or more businesses in which persons unrelated (within the meaning
of IRC Sec. 267(b) or IRC Sec. 707(b)(1)) to an applicant (or the
applicant's subsidiary CDEs) hold the majority equity interest.
Applicants may earn points for one or both statutory priorities. Thus,
applicants that meet the requirements of both priority categories can
receive up to a total of ten (10) additional points. A record of having
successfully provided capital or technical assistance to disadvantaged
businesses or communities may be demonstrated either by the past
actions of an applicant itself or by its Controlling Entity (e.g.,
where a new CDE is established by a nonprofit corporation with a
history of providing assistance to disadvantaged communities). An
applicant that receives additional points for intending to make
investments in unrelated businesses and is awarded a NMTC Allocation
must meet the requirements of IRC Sec. 45D(b)(1)(B) by investing
substantially all of the proceeds from its QEIs in unrelated
businesses. The CDFI Fund will factor in an applicant's priority points
when ranking applicants during Phase 2 of the review process, as
described below.
2. Community Impact (25-point maximum): In assessing the potential
benefits to Low-Income Communities that may result from the applicant's
proposed investments, reviewers will consider, among other things, the
degree to which the applicant is likely to achieve significant and
measurable community development outcomes in its Low-Income
Communities, and whether the applicant is working in particularly
economically distressed markets and/or in concert with Federal, State
or local government or community economic development initiatives
(e.g., Empowerment Zones, Enterprise Communities, and Renewal
Communities). An applicant will generally score well under this section
to the extent that: (a) It articulates how its strategy is likely to
produce significant and measurable community development outcomes that
would not be achieved without NMTCs; and (b) it is working in
particularly economically distressed or otherwise underserved
communities and/or in concert with other Federal, State or local
government or community economic development initiatives.
3. Management Capacity (25-point maximum). In assessing an
applicant's management capacity, reviewers will consider, among other
things, the qualifications of the applicant's principals, its board
members, its management team, and other essential staff or contractors,
with specific focus on: experience in deploying capital or technical
assistance, including activities similar to those described in the
applicant's business strategy; asset management and risk management
experience; experience with fulfilling compliance requirements of other
governmental programs, including other tax programs; and the
applicant's (or its Controlling Entity's) financial health. Reviewers
will also consider the extent to which an applicant has protocols in
place to ensure ongoing compliance with NMTC Program requirements and
the level of involvement of community representatives and other
stakeholders in the design, implementation or monitoring of an
applicant's business plan and strategy. In the case of an applicant or
its Affiliate that has received a NMTC Allocation from the CDFI Fund
under a prior allocation round, reviewers will consider the activities
that have occurred to date with respect to the prior allocation(s).
An applicant will generally score well under this section to the
extent that its management team or other essential personnel have
experience in: (a) Deploying capital or technical assistance in Low-
Income Communities, particularly those likely to be served by the
applicant with the proceeds of QEIs; (b) asset and risk management; and
(c) fulfilling government compliance requirements, particularly tax
credit program compliance. An applicant will also score well to the
extent it demonstrates strong financial health and a high likelihood of
remaining a going-concern; it has policies and systems in place to
ensure ongoing compliance with NMTC Program requirements, and Low-
Income Community stakeholders play an active role in designing or
implementing its business plan.
4. Capitalization Strategy (25-point maximum): When assessing an
applicant's capitalization strategy, reviewers will consider, among
other things: The key personnel of the applicant (or Controlling
Entity) and their track record of raising capital, particularly from
for-profit investors; the extent to which the applicant has secured
investments, commitments to invest in NMTC, or indications of investor
interest commensurate with its requested amount of tax credit
allocations; the applicant's strategy for identifying additional
investors, if necessary, including the applicant's (or its Controlling
Entity's) prior performance with raising equity from investors,
particularly for-profit investors; the distribution of the economic
benefits of the tax credit; the extent to which the applicant intends
to invest the proceeds from the aggregate amount of its QEIs at a level
that exceeds the requirements of IRC Sec. 45D(b)(1)(B) and the IRS
regulations; the likelihood the applicant will raise sufficient capital
to finance its cost of operations while charging reasonable fees; and
the applicant's timeline for utilizing an NMTC Allocation.
An applicant will generally score well under this section to the
extent that: (a) It has secured investor commitments, or has a
reasonable strategy for obtaining such commitments; (b) its request for
allocations is commensurate with both the level of QEIs it is likely to
raise and its expected investment strategy to deploy funds raised with
NMTCs; (c) it generally demonstrates that the economic benefits of the
tax credit will be passed through to end users; (d) it is likely to
secure capital to finance its cost of operations and charge fees
appropriate to the operational needs of the applicant; and (e) it
intends to invest the proceeds from the aggregate amount of its QEIs at
a level that exceeds the requirements of IRC Sec. 45D(b)(1)(B) and the
IRS regulations. In the case of an applicant proposing to raise
investor funds from organizations that also will identify or originate
transactions for the applicant or from affiliated entities, said
applicant will score well to the extent that it will offer products
with more favorable rates or terms than those currently offered by its
investor(s) or Affiliated entities and/or will target its
[[Page 18023]]
activities to areas of greater economic distress than those currently
targeted by the investor or Affiliated entities.
B. Review and selection process: All allocation applications will
be reviewed for eligibility and completeness. The CDFI Fund may consult
with the IRS on the eligibility requirements under IRC Sec. 45D. To be
complete, the application must contain, at a minimum, all information
described as required in the application form. An incomplete
application will be rejected. Once the application has been determined
to be eligible and complete, the CDFI Fund will conduct the substantive
review of each application in two parts (Phase 1 and Phase 2) in
accordance with the criteria and procedures generally described in this
NOAA and the allocation application.
1. Phase 1: Reviewers will evaluate and score each application in
the first part of the review process. An applicant must exceed a
minimum overall aggregate base score threshold and exceed a minimum
aggregate section score threshold in each of the four application
sections (Business Strategy, Community Impact, Management Capacity, and
Capitalization Strategy) in order to advance from the first part of the
substantive review process. If, in the case of a particular
application, a reviewer's total base score or section score(s) (in one
or more of the four application sections) varies significantly from
other reviewers' total base scores or section scores for such
application, the CDFI Fund may, in its sole discretion, obtain the
comments and recommendations of an additional reviewer to determine
whether the anomalous score should be replaced with the score of the
additional reviewer.
2. Phase 2: Once the CDFI Fund has determined which applicants have
met the required minimum overall aggregate base score and aggregate
section score thresholds, the CDFI Fund will rank applicants on the
basis of their combined scores in the Business Strategy and Community
Impact sections of the application and will make adjustments to each
applicant's priority points so that these points maintain the same
relative weight in the ranking of applicant scores in Phase 2 as in
Phase 1. The CDFI Fund will award allocations in the order of this
``Final Rank Score,'' subject to applicants' meeting all other
eligibility requirements; provided, however, that the CDFI Fund, in its
sole discretion, reserves the right to reject an application and/or
adjust award amounts as appropriate based on information obtained
during the review process. Most notably, in the cases of applicants (or
their Affiliates) that are prior year allocatees, the CDFI Fund will
review the activities of the prior year allocatee to determine whether
the entity has: (a) effectively utilized its prior-year allocations;
and (b) substantiated a need for additional allocation authority.
3. Outstanding Reports: In the case of an applicant, or Affiliates,
that has previously received an award or allocation from the CDFI Fund
through any CDFI Fund program, the CDFI Fund will deduct points for the
applicant's (or its Affiliate's) failure to meet the reporting
deadlines set forth in any assistance, award or Allocation Agreement(s)
with the CDFI Fund during the entity's two complete fiscal years prior
to the application deadline of this NOAA (generally FY 2008 and 2009).
C. Allocations serving Non-Metropolitan counties: As provided for
under Section 102(b) of the Tax Relief and Health Care Act of 2006
(Pub. L. 109-432), the CDFI Fund shall ensure that non-metropolitan
counties receive a proportional allocation of Qualified Equity
Investments (QEIs) under the NMTC Program. To this end, the CDFI Fund
will ensure that the proportion of allocatees that are Rural CDEs is,
at a minimum, equal to the proportion of applicants in the Phase 2
review pool that are Rural CDEs; and ensure that at least 20 percent of
the QLICIs to be made using QEI proceeds are invested in Non-
Metropolitan counties. A Rural CDE is one that has over the past five
years dedicated at least 50 percent of its activities to Non-
Metropolitan counties and has committed that at least 50 percent of its
NMTC activities will be conducted in such areas. Non-Metropolitan
counties are counties not contained within a Metropolitan Statistical
Area, as such term is defined in OMB Bulletin No. 99-04 (Revised
Statistical Definitions of Metropolitan Areas (MAs) and Guidance on
Uses of MA Definitions) and applied using 2000 census data.
Applicants that meet the minimum scoring thresholds will be
advanced to Phase 2 review and will be provided with ``preliminary''
awards, in descending order of Final Rank Score, until the $5.0 billion
in allocation authority is expended. Once these ``preliminary'' award
amounts are determined, the CDFI Fund will then analyze the allocatee
pool to determine whether the two Non-Metropolitan proportionality
objectives have been met.
The CDFI Fund will first examine the ``preliminary'' awards and
allocatees to determine whether the percentage of allocatees that are
Rural CDEs is, at a minimum, equal to the percentage of applicants in
the Phase 2 review pool that are Rural CDEs. If this objective is not
achieved, the CDFI Fund will provide awards to additional Rural CDEs
from the Phase 2 pool, in descending order of their Final Rank Score,
until the appropriate percentage balance is achieved. In order to
accommodate the additional allocatees within the $5.0 billion
allocation limitations, a formula reduction will be applied uniformly
to the allocation amount for all allocatees in the pool.
The CDFI Fund will then ensure that the pool of allocatees will, in
the aggregate, invest at least 20 percent of their QLICIs (as measured
by dollar amount) in Non-Metropolitan counties. The CDFI Fund will
first apply the ``minimum'' percentage of QLICIs that allocatees
indicated in their applications would be targeted to Non-Metropolitan
areas to the total allocation award amount of each allocatee (less
whatever percentage the allocatee indicated would be retained for non-
QLICI activities), and total these figures for all allocatees. If this
aggregate total is greater than or equal to 20 percent of the QLICIs to
be made by the allocatees, then the pool is considered balanced and the
CDFI Fund will proceed with the allocation process. However, if the
aggregate total is less than 20 percent of the QLICIs to be made by the
allocatees, the CDFI Fund will consider requiring any or all of the
Allocatees to direct up to the ``maximum'' percentage of QLICIs that
they indicated would be targeted to Non-Metropolitan counties; taking
into consideration their track record and ability to deploy dollars in
Non-Metropolitan counties. If the CDFI Fund cannot meet the benchmark
of 20% of QLICIs in Non-Metropolitan counties, the CDFI Fund may add
additional Rural CDEs (in descending order of final rank score) to the
awardee pool. In order to accommodate the additional allocatees within
the $5.0 billion allocation limitations, a formula reduction will be
applied uniformly to the allocation amount for all allocatees in the
pool.
D. Questions: All outstanding reports or compliance questions
should be directed to the Certifications and Compliance Manager by e-
mail at [email protected]; by telephone at (202) 622-8453; by
facsimile at (202) 622-2445; or by mail to CDFI Fund, 601 13th Street,
NW., Suite 200 South, Washington, DC 20005. The CDFI Fund will respond
to reporting or compliance questions between the hours of 9 a.m. and 5
p.m. ET, starting the date of the
[[Page 18024]]
publication of this NOAA through May 31, 2010. The CDFI Fund will not
respond to reporting or compliance phone calls or e-mail inquiries that
are received after 5 p.m. ET on May 31, 2010 until after the funding
application deadline of June 2, 2010.
E. Right of rejection: The CDFI Fund reserves the right to reject
any NMTC allocation application in the case of a prior CDFI Fund
awardee, if such applicant has failed to comply with the terms,
conditions, and other requirements of the prior or existing assistance
or award agreement(s) with the CDFI Fund. The CDFI Fund reserves the
right to reject any NMTC allocation application in the case of a prior
CDFI Fund Allocatee, if such applicant has failed to comply with the
terms, conditions, and other requirements of its prior or existing
Allocation Agreement(s) with the CDFI Fund. The CDFI Fund reserves the
right to reject any NMTC allocation application in the case of any
applicant, if an Affiliate of the applicant has failed to meet the
terms, conditions and other requirements of any prior or existing
assistance agreement, award agreement or Allocation Agreement with the
CDFI Fund.
The CDFI Fund reserves the right to reject any NMTC allocation
application in the case of a prior CDFI Fund Allocatee, if such
applicant has failed to use its prior NMTC allocation(s) in a manner
that is generally consistent with the business strategy (including, but
not limited to, the proposed product offerings and markets served) set
forth in the allocation application(s) related to such prior
allocation(s). The CDFI Fund also reserves the right to reject any NMTC
allocation application in the case of an Affiliate of the applicant
that is a prior CDFI Fund Allocatee and has failed to use its prior
NMTC allocation(s) in a manner that is generally consistent with the
business strategy set forth in the allocation application(s) related to
such prior allocation(s).
The CDFI Fund reserves the right to reject a NMTC allocation
application if information (including administrative errors) comes to
the attention of the CDFI Fund that adversely affects an applicant's
eligibility for an award, adversely affects the CDFI Fund's evaluation
or scoring of an application, or indicates fraud or mismanagement on
the part of an applicant. If the CDFI Fund determines that any portion
of the application is incorrect in any material respect, the CDFI Fund
reserves the right, in its sole discretion, to reject the application.
As a part of the substantive review process, the CDFI Fund may
permit reviewer(s) to make telephone calls to applicants for the sole
purpose of obtaining, clarifying or confirming application information.
In no event shall such contact be construed to permit an applicant to
change any element of its application. Reviewers will not contact
applicants without the prior approval of the CDFI Fund. At this point
in the process, an applicant may be required to submit additional
information about its application in order to assist the CDFI Fund with
its final evaluation process. Such requests must be responded to within
the time parameters set by the CDFI Fund. The selecting official(s)
will make a final allocation determination based on an applicant's
file, including, without limitation, eligibility under IRCSec. 45D,
the reviewers' scores and the amount of allocation authority available.
In the case of applicants (or Affiliates of applicants) that are
regulated by the Federal government or a State agency (or comparable
entity), the CDFI Fund's selecting official(s) reserve(s) the right to
consult with and take into consideration the views of the appropriate
Federal or State banking and other regulatory agencies. In the case of
applicants (or Affiliates of applicants) that are also Small Business
Investment Companies, Specialized Small Business Investment Companies
or New Markets Venture Capital Companies, the CDFI Fund reserves the
right to consult with and take into consideration the views of the
Small Business Administration.
The CDFI Fund reserves the right to conduct additional due
diligence, as determined reasonable and appropriate by the CDFI Fund,
in its sole discretion, related to the applicant and its officers,
directors, owners, partners and key employees.
Each applicant will be informed of the CDFI Fund's award decision
through an electronic notification whether selected for an allocation
(see Section VI.A. of this NOAA) or not selected for an allocation,
which may be for reasons of application incompleteness, ineligibility
or substantive issues. All applicants that are not selected for an
allocation based on substantive issues will likely be given the
opportunity to obtain feedback on their applications. This feedback
will be provided in a format and within a timeframe to be determined by
the CDFI Fund, based on available resources.
The CDFI Fund further reserves the right to change its eligibility
and evaluation criteria and procedures, if the CDFI Fund deems it
appropriate. If said changes materially affect the CDFI Fund's award
decisions, the CDFI Fund will provide information regarding the changes
through the CDFI Fund's Web site.
There is no right to appeal the CDFI Fund's allocation decisions.
The CDFI Fund's allocation decisions are final.
VI. Award Administration Information
1. Failure to meet reporting requirements: If an Allocatee, or an
Affiliate of an Allocatee, is a prior CDFI Fund awardee or Allocatee
under any CDFI Fund program and is not current on the reporting
requirements set forth in the previously executed assistance,
allocation or award agreement(s), as of the date of the award
notification or thereafter, the CDFI Fund reserves the right, in its
sole discretion, to delay entering into an Allocation Agreement and/or
to impose limitations on an Allocatee's ability to issue QEIs to
investors until said prior awardee or Allocatee is current on the
reporting requirements in the previously executed assistance,
allocation or award agreement(s). Please note that the CDFI Fund only
acknowledges the receipt of reports that are complete. As such,
incomplete reports or reports that are deficient of required elements
will not be recognized as having been received. If said prior awardee
or Allocatee is unable to meet this requirement within the timeframe
set by the CDFI Fund, the CDFI Fund reserves the right, in its sole
discretion, to terminate and rescind the allocation made under this
NOAA.
2. Pending resolution of noncompliance: If an Allocatee is a prior
awardee or Allocatee under any CDFI Fund program and if: (i) It has
submitted complete and timely reports to the CDFI Fund that demonstrate
noncompliance with a previous assistance, award or Allocation
Agreement; and (ii) the CDFI Fund has yet to make a final determination
as to whether the entity is in default of its previous assistance,
award or Allocation Agreement, the CDFI Fund reserves the right, in its
sole discretion, to delay entering into an Allocation Agreement and/or
to impose limitations on the Allocatee's ability to issue Qualified
Equity Investments to investors, pending full resolution, in the sole
determination of the CDFI Fund, of the noncompliance. Further, if an
Affiliate of an Allocatee is a prior CDFI Fund awardee or Allocatee and
if such entity: (i) Has submitted complete and timely reports to the
CDFI Fund that demonstrate noncompliance with a previous assistance,
award or Allocation Agreement; and (ii) the CDFI Fund has yet to make a
final determination as to whether the entity is in default of its
previous assistance, award or Allocation
[[Page 18025]]
Agreement, the CDFI Fund reserves the right, in its sole discretion, to
delay entering into an Allocation Agreement and/or to impose
limitations on the Allocatee's ability to issue QEIs to investors,
pending full resolution, in the sole determination of the CDFI Fund, of
the noncompliance. If the prior awardee or Allocatee in question is
unable to satisfactorily resolve the issues of noncompliance, in the
sole determination of the CDFI Fund, the CDFI Fund reserves the right,
in its sole discretion, to terminate and rescind the award notification
made under this NOAA.
3. Default status: If, at any time prior to entering into an
Allocation Agreement through this NOAA, the CDFI Fund has made a final
determination that an Allocatee that is a prior CDFI Fund awardee or
Allocatee under any CDFI Fund program is in default of a previously
executed assistance, allocation or award agreement(s) and has provided
written notification of such determination to the Allocatee, the CDFI
Fund reserves the right, in its sole discretion, to delay entering into
an Allocation Agreement and/or to impose limitations on the Allocatee's
ability to issue QEIs to investors, until said prior awardee or
Allocatee has submitted a complete and timely report demonstrating full
compliance with said agreement within a timeframe set by the CDFI Fund.
Further, if at any time prior to entering into an Allocation Agreement
through this NOAA, the CDFI Fund has made a final determination that an
Affiliate of the Allocatee is a prior CDFI Fund awardee or Allocatee
under any CDFI Fund program, and is in default of a previously executed
assistance, allocation or award agreement(s) and has provided written
notification of such determination to the defaulting entity, the CDFI
Fund reserves the right, in its sole discretion, to delay entering into
an Allocation Agreement and/or to impose limitations on the Allocatee's
ability to issue QEIs to investors, until said prior awardee or
Allocatee has submitted a complete and timely report demonstrating full
compliance with said agreement within a timeframe set by the CDFI Fund.
If said prior awardee or Allocatee is unable to meet this requirement,
the CDFI Fund reserves the right, in its sole discretion, to terminate
and rescind the Notice of Allocation and the allocation made under this
NOAA.
4. Termination in default: If (i) within the 12-month period prior
to entering into an Allocation Agreement through this NOAA, the CDFI
Fund has made a final determination that an Allocatee that is a prior
CDFI Fund awardee or Allocatee under any CDFI Fund program whose award
or allocation was terminated in default of such prior agreement; (ii)
the CDFI Fund has provided written notification of such determination
to such organization; and (iii) the final reporting period end date for
the applicable terminated agreement falls in such organization's 2008
or 2009 fiscal year, the CDFI Fund reserves the right, in its sole
discretion, to delay entering into an Allocation Agreement and/or to
impose limitations on the Allocatee's ability to issue QEIs to
investors. Furthermore, if (i) within the 12-month period prior to
entering into an Allocation Agreement through this NOAA, the CDFI Fund
has made a final determination that an Affiliate of the Allocatee is a
prior CDFI Fund awardee or Allocatee under any CDFI Fund program whose
award or allocation was terminated in default of such prior agreement;
(ii) the CDFI Fund has provided written notification of such
determination to the defaulting entity; and (iii) the final reporting
period end date for the applicable terminated agreement falls in such
defaulting entity's 2008 or 2009 fiscal year, the CDFI Fund reserves
the right, in its sole discretion, to delay entering into an Allocation
Agreement and/or to impose limitations on the Allocatee's ability to
issue QEIs to investors.
5. Allocation Agreement: Each applicant that is selected to receive
a NMTC Allocation (including the applicant's Subsidiary transferees)
must enter into an Allocation Agreement with the CDFI Fund. The
Allocation Agreement will set forth certain required terms and
conditions of the NMTC Allocation which may include, but are not
limited to, the following: (i) The amount of the awarded NMTC
Allocation; (ii) the approved uses of the awarded NMTC Allocation
(e.g., loans to or equity investments in Qualified Active Low-Income
Businesses or loans to or equity investments in other CDEs); (iii) the
approved service area(s) in which the proceeds of QEIs may be used,
including the dollar amount of QLICIs that must be invested in Non-
Metropolitan counties; (iv) the time period by which the applicant may
obtain QEIs from investors; (v) reporting requirements for all
applicants receiving NMTC Allocations; and (vi) a requirement to
maintain certification as a CDE throughout the term of the Allocation
Agreement. If an applicant has represented in its NMTC allocation
application that it intends to invest substantially all of the proceeds
from its investors in businesses in which persons unrelated to the
applicant hold a majority equity interest, the Allocation Agreement
will contain a covenant whereby said applicant agrees that it will
invest substantially all of said proceeds in businesses in which
persons unrelated to the applicant hold a majority equity interest.
In addition to entering into an Allocation Agreement, each
applicant selected to receive a NMTC Allocation must furnish to the
CDFI Fund an opinion from its legal counsel, the content of which will
be further specified in the Allocation Agreement, to include, among
other matters, an opinion that an applicant (and its Subsidiary
transferees, if any): (i) Is duly formed and in good standing in the
jurisdiction in which it was formed and the jurisdiction(s) in which it
operates; (ii) has the authority to enter into the Allocation Agreement
and undertake the activities that are specified therein; (iii) has no
pending or threatened litigation that would materially affect its
ability to enter into and carry out the activities specified in the
Allocation Agreement; and (iv) is not in default of its articles of
incorporation, bylaws or other organizational documents, or any
agreements with the Federal government.
If an Allocatee identifies Subsidiary transferees, the CDFI Fund
reserves the right to require an Allocatee to provide supporting
documentation evidencing that it Controls such entities prior to
entering into an Allocation Agreement with the Allocatee and its
Subsidiary transferees. The CDFI Fund reserves the right, in its sole
discretion, to rescind its allocation award if the Allocatee fails to
return the Allocation Agreement, signed by the authorized
representative of the Allocatee, and/or provide the CDFI Fund with any
other requested documentation, within the deadlines set by the CDFI
Fund.
6. Fees: The CDFI Fund reserves the right, in accordance with
applicable Federal law and if authorized, to charge allocation
reservation and/or compliance monitoring fees to all entities receiving
NMTC Allocations. Prior to imposing any such fee, the CDFI Fund will
publish additional information concerning the nature and amount of the
fee.
7. Reporting: The CDFI Fund will collect information, on at least
an annual basis, from all applicants that are awarded NMTC Allocations
and/or are recipients of QLICIs, including such audited financial
statements and opinions of counsel as the CDFI Fund deems necessary or
desirable, in its sole discretion. The CDFI Fund will use such
information to monitor each Allocatee's compliance with the provisions
of its
[[Page 18026]]
Allocation Agreement and to assess the impact of the NMTC Program in
Low-Income Communities. The CDFI Fund may also provide such information
to the IRS in a manner consistent with IRC Sec. 6103 so that the IRS
may determine, among other things, whether the Allocatee has used
substantially all of the proceeds of each QEI raised through its NMTC
Allocation to make QLICIs. The Allocation Agreement shall further
describe the Allocatee's reporting requirements.
The CDFI Fund reserves the right, in its sole discretion, to modify
these reporting requirements if it determines it to be appropriate and
necessary; however, such reporting requirements will be modified only
after due notice to Allocatees.
VII. Agency Contacts
The CDFI Fund will provide programmatic and information technology
support related to the allocation application between the hours of 9
a.m. and 5 p.m. ET through May 31, 2010. The CDFI Fund will not respond
to phone calls or e-mails concerning the application that are received
after 5 p.m. ET on May 31, 2010 until after the allocation application
deadline of June 2, 2010. Applications and other information regarding
the CDFI Fund and its programs may be obtained from the CDFI Fund's Web
site at http://www.cdfifund.gov. The CDFI Fund will post on its Web
site responses to questions of general applicability regarding the NMTC
Program.
A. Information technology support: Technical support can be
obtained by calling (202) 622-2455 or by e-mail at
[email protected]. People who have visual or mobility
impairments that prevent them from accessing the Low-Income Community
maps using the CDFI Fund's Web site should call (202) 622-2455 for
assistance. These are not toll-free numbers.
B. Programmatic support: If you have any questions about the
programmatic requirements of this NOAA, contact the CDFI Fund's NMTC
Program Manager by e-mail at [email protected], by telephone at
(202) 622-6355, by facsimile at (202) 622-7754, or by mail at CDFI
Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 20005.
These are not toll-free numbers.
C. Administrative support: If you have any questions regarding the
administrative requirements of this NOAA, contact the CDFI Fund's NMTC
Program Manager by e-mail at [email protected], by telephone at
(202) 622-6355, by facsimile at (202) 622-2445, or by mail at CDFI
Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 20005.
These are not toll-free numbers.
D. IRS support: For questions regarding the tax aspects of the NMTC
Program, contact Branch Five, Office of the Associate Chief Counsel
(Passthroughs and Special Industries), IRS, by telephone at (202) 622-
3040, by facsimile at (202) 622-4753, or by mail at 1111 Constitution
Avenue, NW, Attn: CC:PSI:5, Washington, DC 20224. These are not toll-
free numbers.
E. Legal counsel support: If you have any questions or matters that
you believe require response by the CDFI Fund's Office of Legal
Counsel, please refer to the document titled ``How to Request a Legal
Review,'' found on the CDFI Fund's Web site at http://www.cdfifund.gov.
VIII. Information Sessions
In connection with this NOAA, the CDFI Fund may conduct multiple
information sessions around the country at locations to be announced,
as well as an information session that will be produced in Washington,
DC and broadcast over the Internet via Web casting. For further
information on these upcoming information sessions, please visit the
CDFI Fund's Web site at http://www.cdfifund.gov or call the CDFI Fund
at (202) 927-6224.
Authority: 26 U.S.C. 45D; 31 U.S.C. 321; 26 CFR 1.45D-1.
Dated: April 1, 2010.
Donna J. Gambrell,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2010-8008 Filed 4-7-10; 8:45 am]
BILLING CODE 4810-70-P