[Federal Register Volume 76, Number 108 (Monday, June 6, 2011)]
[Notices]
[Pages 32392-32403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13864]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Notice of Allocation Availability (NOAA) Inviting Applications 
for the CY 2011 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 July 
27, 2011. 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., the CDE's authorized

[[Page 32393]]

representative signature page, the Controlling Entity's representative 
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 June 22, 2011 (see Section III of this NOAA for 
more details).
    Executive Summary: This NOAA is issued in connection with the 
calendar year 2011 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), Division A, section 102 of the Tax Relief 
and Health Care Act of 2006 (Pub. L. 109-432), and section 733 of the 
Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act 
of 2010 (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 the availability of up to $3.5 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 
$125 million per applicant.
    2. Prior QEI Issuance Requirements: In order to be eligible to 
apply for NMTC allocations in the CY2011 round, as described in Section 
III.A.2(a), applicants that have received NMTC allocation awards in 
previous rounds 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 
2010 NOAA.
    3. Healthy Food Financing Initiative: The United States Department 
of Agriculture (USDA), Health and Human Services (HHS), and the United 
States Department of Treasury are working together to support projects 
that increase access to healthy, affordable food in ``food deserts''--
low-income neighborhoods that lack access to healthy food options. As 
part of a coordinated effort called the Healthy Food Financing 
Initiative (HFFI), these three departments will aim to expand the 
availability of nutritious food through the establishment of healthy 
food retail outlets, including developing and equipping grocery stores, 
small retailers, corner stores, and farmers markets to help revitalize 
neighborhoods that currently lack these options.
    The NMTC Program is one of several programs that have been 
identified as part of the HFFI. To this end, under the 2011 NMTC 
application round, the CDFI Fund will collect information from 
applicants regarding the extent to which they intend to use NMTCs in 
support of healthy food financing in food deserts. However, the extent 
to which an applicant intends to provide healthy food financing will 
not be a factor in the scoring or selection process. This information 
will be gathered for informational purposes only, as a means to 
identify NMTC awardees that may finance these types of activities going 
forward and to track the outcomes of these investments.
    B. Program guidance and regulations: This NOAA provides guidance 
for the application and allocation of NMTCs for the ninth 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 
ninth 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 $3.5 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 
$125 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 $125 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, which must be countersigned by the CDFI Fund, 
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 $3.5 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 
June 22, 2011. Applicants for certification may obtain a CDE 
certification application through the CDFI Fund's Web site at http://www.cdfifund.gov. Applications for CDE

[[Page 32394]]

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 
June 22, 2011.
    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 22, 2011. 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]">c[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 CY 2005 round of the NMTC Program 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 October 14, 2011, 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 2005 NMTC 
Allocation.
    A prior Allocatee in the CY 2006 round of the NMTC Program 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 October 14, 2011, it has: (i) Issued and received funds in-hand 
from its investors for at least 80 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 60 percent of its QEIs and that 100 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 CY 2007 round of the NMTC Program 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 October 14, 2011, it has: (i) Issued and received funds in-hand 
from its investors for at least 60 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 50 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 in the CY 2008 round of the NMTC Program 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 October 14, 2011, it has: (i) Issued and received funds in-hand 
from its investors for at least 50 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 40 percent of its QEIs and that at least 80 
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 Allocatee (with the exception of a Rural CDE Allocatee) in 
the CY 2009 round of the NMTC Program 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 October 14, 
2011, it has: (i) Issued and received funds in-hand from its investors 
for at least 30 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 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 CY 2009 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 October 14, 2011, 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 CY 2010 round of the NMTC Program 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 October 14, 
2011, it has: (i) Issued and received funds in-hand from its investors 
for at least 20 percent of its QEIs relating to its CY 2010 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 2010 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 CY 2010 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 CY 2005 and the CY 2010, 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 October 14, 2011, it has 
issued and received funds in-hand from its investors for at least 70 
percent of its QEIs relating to its cumulative allocation amounts from 
these prior NMTC Program rounds. Rural CDEs that received allocations 
under the CY 2009 round 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 2009 allocation. Rural CDEs that received 
allocations under the CY2010 round 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.

[[Page 32395]]

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 October 14, 2013.
    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 (i.e., 
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 Certification Application for 
subsidiary CDEs by no later than July 8, 2011 and Allocation Agreement 
Amendment requests by no later than September 13, 2011 in order to 
guarantee that the CDFI Fund completes all necessary approvals prior to 
October 14, 2011. 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.
    (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

[[Page 32396]]

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 2006, 2007 and 2008 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 2006, 2007, 2008 and 2009 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 2011 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 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) 622-6330, or by 
facsimile at (202) 622-7754. 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) 622-7754. 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 on the date of publication of this NOAA through July 25, 2011 
(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 July 25, 
2011 until after the funding application deadline of July 27, 2011.
    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 60 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 60 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 $125 million cap.
    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

[[Page 32397]]

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 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. the Applicant's authorized 
representative signature page, the Controlling Entity's representative 
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., the Applicant's authorized representative 
signature page, the Controlling Entity's representative 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, it's 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 http://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. The CDFI Fund recommends use of Internet Explorer 
version 8 on Windows XP, and optimally at least a 56Kbps Internet 
connection in order to meet the electronic application submission 
requirements. Use of other browsers (i.e., Firefox), other versions of 
Internet Explorer, or other systems (i.e., Mac) might result in 
problems during submission of the application. 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., the applicant's 
authorized representative signature page, the Controlling Entity's 
representative 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 July 
27, 2011. Electronic applications cannot be transmitted or received 
after 5 p.m. ET on July 27, 2011. In addition, applicants that submit 
electronic applications must separately submit supporting information 
(i.e., the applicant's authorized representative signature page, the 
Controlling Entity's representative signature page, investor letters 
and organizational charts) via their myCDFIFund account. The 
applicant's authorized representative signature page, the Controlling 
Entity's

[[Page 32398]]

representative signature page, investor letters and organizational 
charts must be submitted on or before 11:59 p.m. ET on July 29, 2011. 
The CDFI Fund recommends that attachments have a size limit of 5 
megabytes (MB). See application instructions, provided in the 
electronic application and the 2011 Allocation Application Q&A, for 
further detail. Applications and other required documents received 
after this date and time will be rejected. If the applicant's 
authorized representative signature page is not received by the 
deadline specified above, the CDFI Fund reserves the right to reject 
the application. 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 bears 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.
    G. Paperwork Reduction: Under the Paperwork Reduction Act (44 
U.S.C. chapter 35), an agency may not conduct or sponsor a collection 
of information, and an individual is not required to respond to a 
collection of information, unless it displays a valid OMB control 
number. Pursuant to the Paperwork Reduction Act, the application has 
been assigned the following control number: 1559-0016.

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 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); (iv) articulates a meaningful strategy for distributing any 
tax credit equity remaining at the end of the seven-year credit period 
and (v) 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 (i.e., 
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 
(i.e., 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; (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; and (c) it ensures that an investment 
into a project or business is

[[Page 32399]]

supported by and beneficial to the surrounding community.
    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 in the Governing 
Board and/or Advisory Board in approving investment criteria or 
decisions.
    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 representatives in the Governing Board and/or Advisory 
Board play an active role in designing or implementing its investment 
criteria and/or decisions.
    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's (or Controlling 
Entity's) 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 a QALICB; (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 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 scored 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 2009 and 2010).
    C. Allocations serving Non-Metropolitan counties: As provided for 
under Section 102(b) of the Tax Relief

[[Page 32400]]

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. The CDFI Fund will also 
endeavor to ensure that 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 $3.5 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 $3.5 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 determine whether 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 goal of 20 
percent of QLICIs in Non-Metropolitan counties, the CDFI Fund may add 
additional Rural CDEs (in descending order of final rank score) to the 
allocatee pool. In order to accommodate any additional allocatees 
within the $3.5 billion allocation limitations, a reduction would be 
applied, in as uniform a manner as possible, to the allocation amount 
for all allocatees in the pool that have not committed to investing at 
least 20 percent of their QLICIs in Non-Metropolitan counties.
    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) 622-6330; by 
facsimile at (202) 622-7754; 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 publication of this NOAA through July 
25, 2011. 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 
July 25, 2011 until after the funding application deadline of July 27, 
2011.
    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, adversely affects the CDFI Fund's prior 
determinations of CDE certification, or indicates fraud or 
mismanagement on the part of an applicant or the Controlling Entity, if 
such fraud or mismanagement by the Controlling Entity would hinder the 
applicant's ability to perform under the allocation agreement. 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 the Allocation Recommendation Panel member(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

[[Page 32401]]

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 IRC Sec.  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, the applicant's 
Controlling Entity and the officers, directors, owners, partners and 
key employees of each.
    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 website.
    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 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 2009 
or 2010 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

[[Page 32402]]

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 2009 or 2010 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 
(i.e., 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 or a similar certification, 
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 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 5:00 p.m. ET through July 25, 2011. The CDFI Fund will not 
respond to phone calls or e-mails concerning the application that are 
received after 5 p.m. ET on July 25, 2011 until after the allocation 
application deadline of July 27, 2011. 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) 622-7754, 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.

[[Page 32403]]

    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 webcasting. 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: May 27, 2011.
Donna J. Gambrell,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2011-13864 Filed 6-3-11; 8:45 am]
BILLING CODE 4810-70-P