[Federal Register Volume 82, Number 206 (Thursday, October 26, 2017)]
[Notices]
[Pages 49653-49654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23306]
[[Page 49653]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5815-N-03]
Statutorily Mandated Designation of Difficult Development Areas
and Qualified Census Tracts: Revision of Effective Date for 2015
Designations
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice.
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SUMMARY: This document revises the effective date for designations of
``Difficult Development Areas'' (DDAs) and ``Qualified Census Tracts''
(QCTs) for purposes of the Low-Income Housing Tax Credit (LIHTC) under
Internal Revenue Code (IRC) Section 42 published on October 3, 2014 at
79 FR 59855 and amended December 17, 2015 at 80 FR 78749 in areas
approved for Federal disaster-related individual assistance under the
Stafford Act. This Notice extends from 730 days to 850 days the period
for which the 2015 lists of QCTs and DDAs are effective for projects
located in an area that was approved for individual assistance under
the Stafford Act in 2017, not on subsequent lists of DDAs or QCTs; and
submitted applications while the area was a 2015 QCT or DDA.
FOR FURTHER INFORMATION CONTACT: For questions on how areas are
designated and on geographic definitions, contact Michael K. Hollar,
Senior Economist, Economic Development and Public Finance Division,
Office of Policy Development and Research, Department of Housing and
Urban Development, 451 Seventh Street SW., Room 8234, Washington, DC
20410-6000; telephone number (202) 402-5878, or send an email to
[email protected]. For specific legal questions, contact Branch
5, Office of the Associate Chief Counsel, Passthroughs and Special
Industries, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC 20224; telephone number (202) 317-4137, fax number (855)
591-7867. (These are not toll-free telephone numbers.) Additional
copies of this notice are available through HUD User at (800) 245-2691
for a small fee to cover duplication and mailing costs.
COPIES AVAILABLE ELECTRONICALLY: This notice and additional
information about DDAs and QCTs are available electronically on the
Internet at http://www.huduser.org/datasets/qct.html.
SUPPLEMENTARY INFORMATION:
This Notice
This notice extends from 730 days to 850 days the period for which
the 2015 lists of QCTs and DDAs are effective for projects located in
areas approved for federal individual assistance under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (Stafford Act)
(42 U.S.C. 5170, et al.) due to a Presidentially-declared natural
disaster in 2017 (hereafter, ``declared counties'') and were not in
areas on subsequent lists of DDAs or QCTs but submitted applications
while the area was a 2015 QCT or DDA. DDAs and QCTs for 2016 were
published on November 24, 2015 at 80 FR 73201. DDAs and QCTs for 2017
were published on October 17, 2016 at 81 FR 71523. DDAs and QCTs for
2018 were published on September 11, 2017 at 82 FR 42694. This applies
to declared counties in each of the 50 states, the District of
Columbia, Puerto Rico, American Samoa, Guam, the Northern Mariana
Islands, and the U.S. Virgin Islands. The actual designations of 2015
QCTs and DDAs are not affected by this notice. HUD is revising the
effective date of the 2015 QCTs and DDAs in declared counties at this
time to aid the ability of areas affected by natural disasters to place
in service affordable housing.
For LIHTC and bond-financed projects located in declared counties,
the sections entitled ``Effective Date'' and ``Interpretive Examples of
Effective Date'' of the 2015 DDA and QCT designations as published
October 3, 2014 at 79 FR 59855 and December 17, 2015 at 80 FR78749 are
hereby revised to read as follows:
Effective Date
The 2015 lists of QCTs and DDAs are effective:
(1) For allocations of credit after December 31, 2014; or
(2) For purposes of IRC section 42(h)(4), if the bonds are issued
and the building is placed in service after December 31, 2014.
If an area is not on a subsequent list of DDAs, the 2015 lists are
effective for the area if:
(1) The allocation of credit to an applicant is made no later than
the end of the 850-day period after the applicant submits a complete
application to the LIHTC-allocating agency, and the submission is made
before the effective date of the subsequent lists; or
(2) For purposes of IRC section 42(h)(4), if:
(a) The bonds are issued or the building is placed in service no
later than the end of the 850-day period after the applicant submits a
complete application to the bond-issuing agency, and
(b) The submission is made before the effective date of the
subsequent lists, provided that both the issuance of the bonds and the
placement in service of the building occur after the application is
submitted.
An application is deemed to be submitted on the date it is filed if
the application is determined to be complete by the credit-allocating
or bond-issuing agency. A ``complete application'' means that no more
than de minimis clarification of the application is required for the
agency to make a decision about the allocation of tax credits or
issuance of bonds requested in the application.
In the case of a ``multiphase project,'' the DDA or QCT status of
the site of the project that applies for all phases of the project is
that which applied when the project received its first allocation of
LIHTC. For purposes of IRC section 42(h)(4), the DDA or QCT status of
the site of the project that applies for all phases of the project is
that which applied when the first of the following occurred: (a) The
building(s) in the first phase were placed in service, or (b) the bonds
were issued.
For purposes of this notice, a ``multiphase project'' is defined as
a set of buildings to be constructed or rehabilitated under the rules
of the LIHTC and meeting the following criteria:
(1) The multiphase composition of the project (i.e., total number
of buildings and phases in project, with a description of how many
buildings are to be built in each phase and when each phase is to be
completed, and any other information required by the agency) is made
known by the applicant in the first application of credit for any
building in the project, and that applicant identifies the buildings in
the project for which credit is (or will be) sought;
(2) The aggregate amount of LIHTC applied for on behalf of, or that
would eventually be allocated to, the buildings on the site exceeds the
one-year limitation on credits per applicant, as defined in the
Qualified Allocation Plan (QAP) of the LIHTC-allocating agency, or the
annual per-capita credit authority of the LIHTC allocating agency, and
is the reason the applicant must request multiple allocations over two
or more years; and
(3) All applications for LIHTC for buildings on the site are made
in immediately consecutive years.
Members of the public are hereby reminded that the Secretary of
Housing and Urban Development, or the
[[Page 49654]]
Secretary's designee, has legal authority to designate DDAs and QCTs,
in accordance with 26 U.S.C. 42(d)(5), by publishing lists of
geographic entities as defined by, in the case of DDAs, the Census
Bureau, the several states and the governments of the insular areas of
the United States and, in the case of QCTs, by the Census Bureau; and
to establish the effective dates of such lists. The Secretary of the
Treasury, through the IRS thereof, has sole legal authority to
interpret, and to determine and enforce compliance with the IRC and
associated regulations, including Federal Register notices published by
HUD for purposes of designating DDAs and QCTs. Representations made by
any other entity as to the content of HUD notices designating DDAs and
QCTs that do not precisely match the language published by HUD should
not be relied upon by taxpayers in determining what actions are
necessary to comply with HUD notices.
Interpretive Examples of Effective Date
For the convenience of readers of this notice, interpretive
examples are provided below to illustrate the consequences of the
effective date in areas that gain or lose DDA status. The examples
covering DDAs are equally applicable to QCT designations.
(Case A) Project A is located in a 2015 DDA that is NOT a
designated DDA in 2016, 2017, or 2018 and is in a declared county. A
complete application for tax credits for Project A is filed with the
allocating agency on November 15, 2015. Credits are allocated to
Project A on January 30, 2018. Project A is eligible for the increase
in basis accorded a project in a 2015 DDA because the application was
filed BEFORE January 1, 2016 (the effective date for the 2016 DDA
lists), and because tax credits were allocated no later than the end of
the 850-day period after the filing of the complete application for an
allocation of tax credits.
(Case B) Project B is located in a 2015 DDA that is NOT a
designated DDA in 2016, 2017, or 2018 and is in a declared county. A
complete application for tax credits for Project B is filed with the
allocating agency on December 1, 2015. Credits are allocated to Project
B on June 30, 2018. Project B is NOT eligible for the increase in basis
accorded a project in a 2015 DDA because, although the application for
an allocation of tax credits was filed BEFORE January 1, 2016 (the
effective date of the 2016 DDA lists), the tax credits were allocated
later than the end of the 850-day period after the filing of the
complete application.
(Case C) Project C is located in a 2015 DDA that was not a DDA in
2014. Project C was placed in service on November 15, 2014. A complete
application for tax-exempt bond financing for Project C is filed with
the bond-issuing agency on January 15, 2015. The bonds that will
support the permanent financing of Project C are issued on September
30, 2015. Project C is NOT eligible for the increase in basis otherwise
accorded a project in a 2015 DDA, because the project was placed in
service BEFORE January 1, 2015.
(Case D) Project D is located in an area that is a DDA in 2015, but
is NOT a DDA in 2016, 2017, or 2018 and is in a declared county. A
complete application for tax-exempt bond financing for Project D is
filed with the bond-issuing agency on October 30, 2015. Bonds are
issued for Project D on January 30, 2018, but Project D is not placed
in service until July 30, 2018. Project D is eligible for the increase
in basis available to projects located in 2015 DDAs because: (1) One of
the two events necessary for triggering the effective date for
buildings described in Section 42(h)(4)(B) of the IRC (the two events
being bonds issued and buildings placed in service) took place on
January 30, 2018, within the 850-day period after a complete
application for tax-exempt bond financing was filed, (2) the
application was filed during a time when the location of Project D was
in a DDA, and (3) both the issuance of the bonds and placement in
service of Project D occurred after the application was submitted.
Findings and Certifications
A. Environmental Impact
This notice involves the establishment of fiscal requirements or
procedures that are related to rate and cost determinations and do not
constitute a development decision affecting the physical condition of
specific project areas or building sites. Accordingly, under 40 CFR
1508.4 of the regulations of the Council on Environmental Quality and
24 CFR 50.19(c)(6) of HUD's regulations, this notice is categorically
excluded from environmental review under the National Environmental
Policy Act of 1969 (42 U.S.C. 4321).
B. Federalism Impact
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any policy document that has federalism implications if
the document either imposes substantial direct compliance costs on
state and local governments and is not required by statute, or the
document preempts state law, unless the agency meets the consultation
and funding requirements of section 6 of the executive order. This
notice merely designates DDAs as required under IRC Section 42, as
amended, for the use by political subdivisions of the states in
allocating the LIHTC. As a result, this notice is not subject to review
under the order.
Dated: October 19, 2017.
Kurt G. Usowski,
Deputy Assistant Secretary for Economic Affairs.
[FR Doc. 2017-23306 Filed 10-25-17; 8:45 am]
BILLING CODE 4210-67-P