[Federal Register Volume 88, Number 204 (Tuesday, October 24, 2023)]
[Notices]
[Pages 73084-73094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23485]
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DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Funding Opportunity Title: Notice of Allocation Availability (NOAA)
Inviting Applications for the Calendar Year (CY) 2023 Allocation Round
of the New Markets Tax Credit (NMTC) Program.
Announcement Type: Announcement of NMTC Allocation availability.
Dates:
Table 1--CY 2023 Allocation Round NMTC Program Critical Deadlines for Applicants
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Description Deadline/date Time (eastern time--ET) Submission method
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Community Development Entity (CDE) November 8, 2023........................ 11:59 p.m. ET.......................... Electronically via the Awards
Certification Application. Management Information
System (AMIS).
Request to modify CDE certification November 8, 2023........................ 11:59 p.m. ET.......................... Electronically via AMIS.
service area.
Subsidiary CDE Certification November 8, 2023........................ 11:59 p.m. ET.......................... Electronically via AMIS.
Application for meeting Qualified
Equity Investment (QEI) issuance
thresholds.
CY 2023 Application Registration...... November 15, 2023....................... 5:00 p.m. ET........................... Electronically via AMIS.
Last date to contact CDFI Fund staff.. December 15, 2023....................... 5:00 p.m. ET........................... Electronically via AMIS.
CY 2023 Allocation Application December 19, 2023....................... 5:00 p.m. ET........................... Electronically via AMIS.
(including required Attachments).
Amendment request to add Subsidiary January 21, 2024........................ 11:59 p.m. ET.......................... Electronically via AMIS.
CDEs to Allocation Agreements for
meeting QEI issuance thresholds.
Amendment request to remove a January 21, 2024........................ 11:59 p.m. ET.......................... Electronically via AMIS.
Controlling Entity from Allocation
Agreement(s).
QEI Issuance and making Qualified Low March 21, 2024.......................... 11:59 p.m. ET.......................... Not Applicable.
Income Community Investments (QLICIs)
by.
Report QEIs and certify QLICIs by..... March 28, 2024.......................... 11:59 p.m. ET.......................... Electronically via AMIS.
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Executive Summary: This NOAA is issued in connection with the CY
2023 allocation round (Allocation Round) of the New Markets Tax Credit
Program (NMTC Program), as authorized by Title I, subtitle C, section
121 of the Community Renewal Tax Relief Act of 2000 (Pub. L. 106-554)
as amended. Through the NMTC Program, the Community Development
Financial Institutions Fund (CDFI Fund) provides authority to certified
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 $5 billion of NMTC Allocation
authority in this Allocation Round.
In this NOAA, the CDFI Fund specifically addresses how a CDE 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 from the CY 2022 allocation round:
1. Prior QEI Issuance Requirements: Prior-year NMTC Allocatees will
be subject to minimum thresholds for QEI issuance and closing of QLICIs
with respect to their prior-year NMTC Allocations. These thresholds and
deadlines have been revised in comparison to the CY 2022 NOAA. See
Section III. A.5(a) of this NOAA for additional details.
II. Allocation Information
A. Allocation amounts: Pursuant to the Taxpayer Certainty and
Disaster Tax Relief Act of 2020, the CDFI Fund expects that it may
allocate to CDEs the authority to issue to their investors the
aggregate amount of $5 billion in equity as to which NMTCs may be
claimed, as permitted under IRC 45D(f)(1)(D). Pursuant to this NOAA,
the CDFI Fund anticipates that it may issue up to $100 million in tax
credit investment authority per Allocatee. 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
[[Page 73085]]
Fund deem it appropriate. The CDFI Fund reserves the right to allocate
NMTC authority to any, all, or none of the entities that submit
applications in response to this NOAA, and in any amounts it deems
appropriate.
B. Type of award: NMTC Program awards are made in the form of
allocations of tax credit investment authority.
C. Program guidance and regulations: This NOAA describes
application and NMTC Allocation requirements for this Allocation Round
of the NMTC Program and should be read in conjunction with: (i) the
final NMTC Program Income Tax Regulations issued by the Internal
Revenue Service (IRS) (26 CFR 1.45D-1, published on December 28, 2004),
as amended and related guidance, notices and other publications; and
(ii) the application and related materials for this Allocation Round.
All such materials may be found on the CDFI Fund's website at https://www.cdfifund.gov. The CDFI Fund requires Applicants to review these
documents. Capitalized terms used, but not defined, in this NOAA have
the respective meanings assigned to them in the NMTC Program Allocation
Application, Internal Revenue Code (IRC) 45D or the IRS NMTC
regulations. In the event of any inconsistency between this NOAA, the
Allocation Application, and guidance issued by the CDFI Fund thereto,
IRC 45D or the IRS NMTC Regulations, the provisions of IRC 45D and the
IRS NMTC Regulations shall govern.
D. Allocation Agreement: Each Allocatee 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 NMTC Allocation. For further information,
see Section VI.B of this NOAA.
E. Statutory and national policy requirements: The CDFI Fund will
manage and administer the NMTC Program in a manner so as to ensure that
NMTC Allocations associated programs are implemented in full accordance
with the U.S. Constitution, Federal Law, statutory, and public policy
requirements: including, but not limited to, those protecting free
speech; religious liberty; public welfare; the environment; and
prohibiting discrimination.
III. Eligibility
A. Eligible Applicants: IRC 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 available 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 through AMIS by the deadline in
Table 1. Applicants for CDE certification may obtain information
regarding CDE certification and the CDE Certification Application
process in AMIS on the CDFI Fund's website at https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx.
The CDFI Fund will not provide NMTC Allocation authority to
Applicants that are not certified as CDEs or to entities that are
certified as Subsidiary CDEs.
If an Applicant that has already been certified as a CDE wishes to
change its designated CDE Service Area for this Allocation Round, then
it must submit a CDE Service Area Amendment Application to request such
a change from the CDFI Fund, and the application must be received by
the CDFI Fund by the deadline listed in Table 1. A request to change a
CDE's Service Area will need to include the revised service area
designation and updated accountability information that demonstrates
that the CDE has the required representation from Low-Income
Communities in the revised CDE Service Area.
2. Repayment or Refinancing of QEI with QLICI Proceeds: An
applicant must commit that it will not permit the use of the proceeds
of QEIs to make QLICIs in Qualified Active Low-Income Community
Businesses (QALICBs) where QLICI proceeds are used, in whole or in
part, to repay or refinance a debt or equity provider whose capital was
used to fund the QEI, or are used to repay or refinance any Affiliate
of such a debt or equity provider, except where: (i) the QLICI proceeds
are used to repay or refinance documented reasonable expenditures that
are directly attributable to the qualified business of the QALICB, and
such reasonable expenditures were incurred no more than 24 months prior
to the QLICI closing date; or (ii) no more than five percent of the
total QLICI proceeds from the QEI are used to repay or refinance
documented reasonable expenditures that are directly attributable to
the qualified business of the QALICB. Refinance includes transferring
cash or property, directly or indirectly, to the debt or equity
provider or an Affiliate of the debt or equity provider.
3. Do Not Pay: The CDFI Fund will contact the Do Not Pay Business
Center to ensure that an Applicant, its Controlling Entity, and any
Affiliate(s) are not prohibited from receiving federal funds. An
Applicant, its Controlling Entity, and any Affiliate(s) reported by the
Do Not Pay Business Center as having a pending or delinquent debt to
the Federal government will be required to demonstrate that it has
resolved such pending or delinquent debt. Applicants that fail to
demonstrate resolution of such pending or delinquent debt to the
Federal government will be found ineligible to receive an allocation.
4. Controlling Entities: An organization that was a Controlling
Entity to an Allocatee in a prior round(s) and subsequently separated
from that Allocatee, as a result of an amendment to the Allocation
Agreement(s), may not claim the NMTC-related track record of such
Allocatee.
5. Prior award recipients or Allocatees: Applicants must be aware
that success in a prior application or allocation round of any of the
CDFI Fund's programs is not indicative of success under this NOAA. For
purposes of this NOAA, and eligibility determinations, 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 award recipients of any CDFI Fund program are eligible to
apply under this NOAA, except as follows:
(a) Prior Allocatees and Qualified Equity Investment (QEI) issuance
and Qualified Low Income Community Investment (QLICI) requirements:
CDEs that are Allocatees under the CY 2018 to the CY 2022 rounds must
finalize at least the percentage of QEIs noted in Table 2 for each NMTC
Allocation round and use at least the percentage of those QEIs
designated in Schedule 1, section 3.2(j) of their Allocation Agreements
to make QLICIs by the deadline in Table 1. CDEs that are Allocatees
under the CY 2018 to the CY 2022 allocation rounds and CDEs that are
Allocatees designated as Rural CDEs in their CY 2022 Allocation
Agreement must meet the following thresholds.
[[Page 73086]]
Table 2--QEI Issuance and QLICI Requirements
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Rural CDE
Finalized QEI Finalized QEI
Prior round allocation requirement (%) requirement QLICIs
(%)
----------------------------------------------------------------------------------------------------------------
CY 2018............................... 100 100 As stated in Schedule 1, Section
3.2(j) of the applicable Allocation
Agreement.
CY 2019............................... 90 90
CY 2020............................... 70 70
CY 2021............................... 40 40
CY 2022............................... 20 0
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In addition to the requirements noted above, a CDE is not eligible
to receive an NMTC Allocation pursuant to this NOAA if an Affiliate of
the Applicant is a prior Allocatee and has not met the minimum QEI
issuance and QLICI thresholds as set forth in Table 2 for Allocatees in
the prior allocation rounds of the NMTC Program.
For purposes of this section of the NOAA, the CDFI Fund will only
recognize as ``finalized'' those QEIs that have been properly reported
in AMIS Allocation and QEI Tracking System for Qualified Equity
Investments (AQEIs) by the deadline in Table 1. Allocatees and their
Subsidiary Allocatees, if any, are advised to access AMIS to record
each QEI that they issue to an investor in exchange for cash.
Furthermore, the CDFI Fund will only recognize QLICIs that have been
certified in AMIS by the deadline in Table 1. Instructions on recording
a QEI and QLICIs in AMIS are available at https://www.cdfifund.gov/amisreporting. Applicants may be required, upon notification from the
CDFI Fund, to submit documentation to substantiate the required QEI
issuance and QLICI thresholds.
Any prior Allocatee that requires 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 a CDE Certification Application for
Subsidiary CDEs and/or Allocation Agreement amendment requests by the
respective deadlines in Table 1, in order to guarantee that the CDFI
Fund completes all necessary approvals prior to the QEI issuance
deadline in Table 1. Applicants for Subsidiary CDE certification may
obtain information regarding CDE certification and the CDE
Certification Application process in AMIS on the CDFI Fund's website at
https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx.
(b) Pending determination of noncompliance or default: If an
Applicant is a prior award recipient or Allocatee under any CDFI Fund
program and if: (i) it has demonstrated noncompliance with a previous
assistance or award agreement or default under a previous Allocation
Agreement or pursuant to any other agreement under any CDFI Fund
program; and (ii) the entity has been given a timeframe to cure the
noncompliance or default, the CDFI Fund will consider the Applicant's
application under this NOAA during the time period given for the entity
to cure the noncompliance or default, and until such time as the CDFI
Fund makes a final determination that the entity is in noncompliance or
default. Further, if an Affiliate of the Applicant is a prior CDFI Fund
award recipient or Allocatee and if such entity: (i) has demonstrated
noncompliance with a previous assistance or award agreement or default
under a previous Allocation Agreement or pursuant to any other
agreement under any CDFI Fund program; and (ii) the entity has been
given a timeframe to cure the noncompliance or default, then the CDFI
Fund will consider the Applicant's application under this NOAA during
the time period given for the entity to cure the noncompliance or
default, and until such time as the CDFI Fund makes a final
determination that the entity is in noncompliance or default.
(c) Noncompliance or default status: The CDFI Fund will not
consider an application submitted by an Applicant that is a prior CDFI
Fund award recipient or Allocatee under any CDFI Fund program if, as of
the application deadline of this NOAA: (i) the CDFI Fund has made a
final determination that such Applicant is noncompliant with a
previously executed assistance or award agreement, or in default of a
previously executed Allocation Agreement or any other agreement under
any CDFI Fund program; and (ii) the CDFI Fund has provided written
notification of such final determination to the Applicant; and (iii)
the default occurs during the time period beginning 12 months prior to
the application deadline and ending with the CY 2023 allocation award
announcement. Further, the CDFI Fund will not consider an application
submitted by an Applicant with an Affiliate that is a prior award
recipient or Allocatee under any CDFI Fund Program if, as of the
application deadline of this NOAA: (i) the CDFI Fund has made a final
determination that such Affiliate is noncompliant with a previously
executed assistance or award agreement, or in default of a previously
executed Allocation Agreement or any other agreement under any CDFI
Fund program; (ii) the CDFI Fund has provided written notification of
such final determination to the Affiliate; and (iii) the noncompliance
or default occurs during the time period beginning 12 months prior to
the application deadline and ending with the CY 2023 allocation award
announcement.
(d) Contacting the CDFI Fund: Accordingly, Applicants that are
prior award recipients and/or Allocatees under any CDFI Fund program
are advised to comply with the requirements specified in assistance,
allocation and/or award agreement(s). All outstanding reports and
compliance questions should be directed to the Office of Compliance
Monitoring and Evaluation (OCME) through a Service Request initiated in
AMIS. Requests submitted less than 30 calendar days prior to the
application deadline may not receive a response before the application
deadline.
The CDFI Fund will respond to Applicants' reporting, compliance and
CDE certification inquiries Monday through Friday, between the hours of
9:00 a.m. and 5:00 p.m. ET, starting the date of publication of this
NOAA through the ``Last date to contact CDFI Fund staff'' specified in
Table 1. Inquiries received after the ``Last date to contact the CDFI
Fund staff'' will be responded to after the Allocation Application
deadline.
6. Failure to accurately respond to a question in the Assurances
and Certifications section of the application, submit the required
written explanation, or provide any updates: In its sole discretion,
the CDFI Fund may deem the
[[Page 73087]]
Applicant's application ineligible, if the CDFI Fund determines that
the Applicant inaccurately responded to a question, accurately
responded to a question, but failed to submit a required written
explanation, or failed to notify the CDFI Fund of any changes to the
information submitted between the date of application and the date the
Allocatee executes the Allocation Agreement, with respect to the
Assurances and Certifications. In making this determination, the CDFI
Fund will take into consideration, among other factors, the materiality
of the question, the substance of any supplemental responses provided,
and whether the information in the Applicant's supplemental responses
would have a material adverse effect on the Applicant, its financial
condition or its ability to perform under an Allocation Agreement,
should the Applicant receive an allocation.
7. Entities that propose to transfer NMTCs to Subsidiary CDEs: Both
for-profit and non-profit CDEs may apply for NMTC Allocation authority,
but only a for-profit CDE is permitted to provide NMTCs to its
investors. A non-profit Applicant wishing to apply for an NMTC
Allocation must demonstrate, prior to entering into an Allocation
Agreement with the CDFI Fund, that: (i) it controls one or more
Subsidiary CDEs that are for-profit entities; and (ii) it intends to
transfer the full amount of any NMTC Allocation it receives to said
Subsidiary CDEs.
An Applicant wishing to transfer all or a portion of its NMTC
Allocation to a Subsidiary CDE is not required to create the Subsidiary
prior to submitting an 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.
The CDFI Fund requires a non-profit Applicant to submit a CDE
Certification Application to the CDFI Fund on behalf of at least one
for-profit Subsidiary within 45 days after the non-profit Applicant
receives notification from the CDFI Fund of its allocation award, as
such Subsidiary must be certified as a CDE prior to entering into an
Allocation Agreement with the CDFI Fund. The CDFI Fund reserves the
right to rescind the award if a non-profit Applicant that does not
already have a certified for-profit Subsidiary CDE fails to submit a
CDE Certification Application for one or more for-profit Subsidiaries
within 45 days of the date it receives notification from the CDFI Fund
of its allocation award.
8. Entities that submit applications together with Affiliates;
applications from common enterprises:
(a) As part of the Allocation Application review process, the CDFI
Fund will evaluate whether Applicants are Affiliates, as such term is
defined in the Allocation Application. If an Applicant and its
Affiliate(s) wish to submit Allocation Applications, they must do so
collectively, in one application; an Applicant and its Affiliate(s) may
not submit separate Allocation Applications. If Affiliated entities
submit multiple applications, the CDFI Fund will reject all such
applications received, except for those state-owned or state-controlled
governmental Affiliated entities. In the case of state-owned or state-
controlled governmental entities, the CDFI Fund may accept applications
submitted by different government bodies within the same state, 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/or are operated
and/or managed by distinctly dissimilar personnel, including staff,
board members and 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 $100
million cap.
If the CDFI Fund determines that the applications submitted by
different government bodies in the same state are not distinctly
dissimilar and/or operated and/or managed by distinctly dissimilar
personnel, it will reject all such applications.
(b) For purposes of this NOAA, the CDFI Fund will also evaluate
whether each Applicant is operated or managed as a ``common
enterprise'' with another Applicant in this Allocation Round using the
following indicia, among others: (i) whether different Applicants have
the same individual(s), including the Authorized Representative, staff,
board members and/or consultants, involved in day-to-day management,
operations and/or investment responsibilities; (ii) whether the
Applicants have business strategies and/or proposed activities that are
so similar or so closely related that, in fact or effect, they may be
viewed as a single entity; and/or (iii) whether the applications
submitted by separate Applicants contain significant narrative, textual
or other similarities such that they may, in fact or effect, be viewed
as substantially identical applications. In such cases, the CDFI Fund
will reject all applications received from such entities.
(c) Furthermore, an Applicant that receives an NMTC Allocation in
this Allocation Round (or its Subsidiary Allocatee) may not become an
Affiliate of or member of a common enterprise (as defined above) with
another Applicant that receives an NMTC Allocation in this Allocation
Round (or its Subsidiary Allocatee) 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 website at https://www.cdfifund.gov for more
details).
9. Entities created as a series of funds: An Applicant whose
business structure consists of an entity with a series of funds must
apply for CDE certification for each fund. 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 must submit a CDE Certification Application for
the Applicant and each fund it would like to participate in the NMTC
Program, 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 fund is a certified CDE that is a Subsidiary of the
Applicant, enjoined to the Allocation Agreement as a Subsidiary
Allocatee.
10. Entities that are Bank Enterprise Award Program (BEA Program)
award recipients: An insured depository institution investor (and its
Affiliates and Subsidiaries) may not receive an 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 an NMTC Allocation for the same investment in a CDE.
[[Page 73088]]
IV. Application and Submission Information
A. Address to request application package: Applicants must submit
applications electronically under this NOAA, through the CDFI Fund's
AMIS. Following the publication of this NOAA, the CDFI Fund will make
the electronic Allocation Application available on its website at
https://www.cdfifund.gov.
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, except, if necessary and at the request of the CDFI
Fund. Electronic applications must be submitted solely by using the
format made available via AMIS. Additional information, including
instructions relating to the submission of supporting information
(e.g., the Controlling Entity's representative signature page,
Assurances and Certifications supporting documents, investor letters,
organizational charts), is set forth in further detail in the CY 2023
NMTC Application--AMIS Navigation Guide for this Allocation Round. An
application must include a valid and current Employer Identification
Number (EIN) issued by the Internal Revenue Service (IRS) 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 IRS at (800) 829-4933 or www.irs.gov. Do not include
any personal Social Security Numbers as part of the application.
C. NMTC Application Registration (Application Registration): CY
2023 Allocation Round Applicants are first required to complete and
save the Application Registration section of the NMTC Allocation
Application in AMIS by the Application Registration deadline in order
to be able to submit the remaining sections of the CY 2023 Allocation
Application by the Application deadline. Applicants that do not
complete and save the Application Registration by the Application
Registration deadline, will not be able to subsequently submit a CY
2023 Allocation Application in AMIS.
An Applicant may not submit more than one application in response
to this NOAA. In addition, as stated in Section III.A.8 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 in Section III.A.8
above. Once an application is submitted, an Applicant will not be
allowed to change any element of its application.
D. Form of application submission: Applicants may only submit
applications under this NOAA electronically via AMIS. Applications and
required attachments sent by mail, facsimile, or email 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.
Electronic applications must be submitted solely by using the CDFI
Fund's website and must be sent in accordance with the submission
instructions provided in the CY 2023 NMTC Application--AMIS Navigation
Guide for this Allocation Round. AMIS 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 (e.g., the Controlling
Entity's representative signature page, Assurances and Certifications
supporting documents, investor letters, and organizational charts) is
set forth in further detail in the CY 2023 NMTC Application--AMIS
Navigation Guide for this Allocation Round.
E. Application submission dates and times: Electronic applications
must be received by the Allocation Application deadline in Table 1.
Electronic applications cannot be transmitted or received after
Allocation Application deadline in Table 1. In addition, Applicants
must electronically submit supporting information (e.g., the
Controlling Entity's representative signature page, investor letters,
and organizational charts). The Controlling Entity's representative
signature page, investor letters, and organizational charts must be
submitted on or before the Application deadline in Table 1. For
details, see the instructions provided in the CY 2023 NMTC
Application--AMIS Navigation Guide for this Allocation Round on the
CDFI Fund's website.
Applications and other required documents received after this date
and time will be rejected. Please note that the document submission
deadlines in this NOAA and/or the Allocation Application are strictly
enforced.
F. Intergovernmental Review: Not applicable.
G. Funding Restrictions: For allowable uses of investment proceeds
related to an 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 as amended) and related guidance.
Please see Section I, above, for the Programmatic Changes of this NOAA.
H. 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
A. Review and selection process: All Allocation Applications will
be reviewed for eligibility and completeness. 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.
In Phase 1, two reviewers will evaluate and score the Business
Strategy and Community Outcomes sections of each application. An
Applicant must exceed a minimum overall aggregate base score threshold
and exceed a minimum aggregate section score threshold in each scored
section in order to advance from the Phase 1 to the Phase 2 part of the
substantive review process. In Phase 2, the CDFI Fund will rank
Applicants and determine the dollar amount of allocation authority
awarded in accordance with the procedures set forth below.
B. 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; a pipeline of potential business loans or
investments consistent with an Applicant's request for an NMTC
Allocation; the prior performance of the Applicant or its Controlling
Entity, particularly as it
[[Page 73089]]
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; and the extent to which the Applicant intends to make
QLICIs in one or more businesses in which persons unrelated to the
entity hold a majority equity interest.
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 are flexible or non-traditional in form
and on better terms than available in the marketplace. An Applicant
will also score well to the extent that, among other things: (i) it has
identified a set of clearly-defined potential borrowers or investees;
(ii) it describes the due diligence it will conduct prior to making
QLICIs to determine whether a QALICB will remain financially viable and
operational; (iii) it has a track record of successfully deploying
loans or equity investments and providing services similar to those it
intends to provide with the proceeds of QEIs; (iv) its projected dollar
volume of NMTC Allocation deployment is supported by its track record
of deployment; 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 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 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
additional points to any Applicant that intends to satisfy the
requirement of IRC 45D(b)(1)(B) by making QLICIs in one or more
businesses in which persons unrelated (within the meaning of IRC 267(b)
or IRC 707(b)(1)) to an Applicant (and the Applicant's Subsidiary CDEs,
if the Subsidiary Allocatee makes the QLICI) 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 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 an NMTC Allocation must meet the requirements of IRC
45D(b)(1)(B) by investing substantially all of the proceeds from its
QEIs in unrelated businesses. The CDFI Fund will include an Applicant's
priority points when ranking Applicants during Phase 2 of the review
process, as described below.
2. Community Outcomes (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: (i) achieve
significant and measurable community development outcomes in its Low-
Income Communities; (ii) invest in particularly economically distressed
markets including areas identified in the Allocation Application; (iii)
engage with local communities regarding investments; and (iv) involve
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, among other things: (a) it will generate clear and well
supported community development outcomes; (b) it has a track record of
producing quantitative and qualitative community outcomes that are
similar to those projected to be achieved with an NMTC Allocation; (c)
it commits to working in particularly economically distressed or
otherwise underserved communities as identified in the Allocation
Application; (d) its activities are part of a broader community or
economic development strategy; (e) it demonstrates a track record of
community engagement around past investment decisions; and (f) it
ensures that an NMTC investment into a project or business is supported
by and will be beneficial to Low-Income Persons and residents of Low-
Income Communities, including how input received through community
engagement and data analysis inform its investment decisions.
C. Phase 2 Evaluation:
1. Application Ranking and Anomaly Reviews: Using the numeric
scores from Phase 1, Applicants are ranked on the basis of each
Applicant's combined scores in the Business Strategy and Community
Outcomes sections of the application plus one half of the priority
points. If, in the case of a particular application, a reviewer's total
base score or section score(s) (in one or more of the two application
scored sections) varies significantly from the other reviewer's total
base scores or section scores for such application, the CDFI Fund may,
in its sole discretion, obtain the evaluation and numeric scoring of an
additional third reviewer to determine whether the anomalous score
should be replaced with the score of the additional third reviewer.
2. Late Reports: In the case of an Applicant or any Affiliates that
have previously received an award or NMTC Allocation from the CDFI Fund
through any CDFI Fund program, the CDFI Fund will deduct up to five
points from the Applicant's rank score for the Applicant's (or its
Affiliate's) failure to meet any of the reporting deadlines set forth
in any assistance, award or Allocation Agreement(s), if the reporting
deadlines occurred during the period from January 27, 2022 to the
application deadline in this NOAA.
3. Prior Year Allocatees: In the case 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 NMTC Allocations in
a manner generally consistent with the representations made in the
relevant Allocation Application (including, but not limited to, the
proposed product offerings, business type, fees and markets served
(i.e. service area) and notable relationships); (b) issued QEIs and
closed QLICIs in a timely manner; and (c) substantiated a need for
additional NMTC Allocation authority. The CDFI Fund will use this
information in determining whether to reject or reduce the allocation
award amount of its NMTC Allocation Application.
An Applicant will be evaluated more favorably under Part V. of the
Application to the extent that it clearly explains: (i) how it ensures
that the NMTCs allocated to QALICBs did not exceed the amount necessary
to assure QALICB feasibility; (ii) the community outcomes or benefits
that were generated as a result of the transaction; (iii) source(s) and
amount(s) of leveraged debt from all sources; (iv) the NMTC-related
fees and third-party expenses paid by the QALICB or the QALICB's
Affiliates, including actions taken to control expenses paid by QALICBs
and investors; and (v) quantifies the value of the investment
[[Page 73090]]
acquired by the QALICBs at the end of the seven-year credit period, to
the extent the Applicant's past transactions have been structured to
allow QALICBs to acquire a portion of QLICIs at the end of the seven-
year credit period. An Applicant will also be evaluated favorably to
the extent the activities undertaken with the NMTC dollars are
consistent with the business strategy presented in the relevant
Allocation Application (e.g. product offerings; business type; fees and
markets served; notable relationships, etc.).
4. Management Capacity: In assessing an Applicant's management
capacity, the CDFI Fund will consider, among other things, the current
and planned roles, as well as qualifications of the Applicant's (and
Controlling Entity's, if applicable): principals; board members;
management team; and other essential staff or contractors, with
specific focus on: experience in providing loans; equity investments or
financial counseling and other services, 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 credit programs; and the Applicant's (or its Controlling Entity's)
financial health. CDFI Fund evaluators will also consider the extent to
which an Applicant has protocols in place to ensure ongoing compliance
with NMTC Program requirements and the Applicant's projected income and
expenses related to managing an NMTC Allocation.
An Applicant will be generally evaluated more favorably under this
section to the extent that its management team or other essential
personnel have experience in: (a) identifying and underwriting loans
and/or equity investments or providing financial counseling and other
services in Low-Income Communities, if applicable, particularly those
likely to be served with QLICIs from the Applicant; (b) asset and risk
management; and (c) fulfilling government compliance requirements,
particularly tax credit program compliance. An Applicant will also be
evaluated favorably to the extent it clearly explains its due diligence
when providing businesses with financing or investment; demonstrates
strong financial health and a high likelihood of remaining a going-
concern, including support from the Controlling Entity, if applicable;
it clearly explains its NMTC fees as well as levels of income and
expenses; has policies and systems in place to ensure portfolio
quality, ongoing compliance with NMTC Program requirements; and, if it
is a Federally-insured financial institution, has its most recent
Community Reinvestment Act (CRA) rating as ``outstanding.''
5. Capitalization Strategy: When assessing an Applicant's
capitalization strategy, the CDFI Fund 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 or
commitments to invest in NMTC (if applicable), or indications of
investor interest commensurate with its requested amount of NMTC
Allocations, or, if a prior Allocatee, the track record of the
Applicant or its Affiliates in raising Qualified Equity Investments in
the past five years; 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; and 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 45D(b)(1)(B)
and the IRS regulations.
An Applicant will be evaluated more favorably under this section to
the extent that: (a) it or its Controlling Entity demonstrate a track
record of raising investment capital; (b) it has secured investor
commitments, or has a reasonable strategy for obtaining such
commitments, or, if it or its Affiliates is a prior Allocatee with a
track record in the past five years of raising Qualified Equity
Investments and; (c) it generally demonstrates that the economic
benefits of the tax credit will be passed through to a QALICB; and (d)
it intends to invest the proceeds from the aggregate amount of its QEIs
at a level that exceeds the requirements of IRC 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 be evaluated more favorably 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.
6. Contacting Applicants: As a part of the substantive review
process, the CDFI Fund may permit the NMTC Allocation recommendation
panel member(s) to request information from Applicants for the sole
purpose of obtaining, clarifying or confirming application information
or omission of information. In no event shall such contact be construed
to permit an Applicant to change any element of its application. 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. If the Applicant (or the
Controlling Entity or any Affiliate) has previously been awarded an
NMTC Allocation, the CDFI Fund may also request information on the use
of those NMTC Allocations, to the extent that this information has not
already been reported to the CDFI Fund. 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 IRC
45D, the reviewers' scores and the amount of NMTC Allocation authority
available.
7. Award Decisions: The CDFI Fund will award allocations in
descending order of the 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.
D. 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 QEIs under the NMTC
Program. The CDFI Fund will endeavor to ensure that 20 percent of the
QLICIs to be made using QEI proceeds are invested in Non-Metropolitan
counties. In addition, 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 highly qualified pool that are Rural
CDEs. A Rural CDE is one that has a track record of at least three
years of direct financing experience, has dedicated at least 50 percent
of its direct financing dollars to Non-Metropolitan counties over the
past five years, and has committed that at least 50 percent of its NMTC
financing dollars with this NMTC Allocation will be deployed in such
areas. Non-Metropolitan counties are counties not contained within a
Metropolitan Statistical Area, as such term is defined
[[Page 73091]]
in OMB Bulletin No. 20-01 (Revised Delineations of Metropolitan
Statistical Areas, Micropolitan Statistical Areas, and Combined
Statistical Areas, and Guidance on Uses of the Delineations of These
Areas) and applied using 2020 census tracts.
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 available
allocation authority is fulfilled. 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 highly qualified pool that are Rural CDEs. If this objective is not
achieved, the CDFI Fund will provide awards to additional Rural CDEs
from the highly qualified pool, in descending order of their final rank
score, until the appropriate percentage balance is achieved. In order
to accommodate the additional Rural CDEs in the Allocatee pool within
the available NMTC Allocation limitations, a formula reduction may be
applied as uniformly as possible to the allocation amount for all
Allocatees in the pool that have not committed to investing a minimum
of 20 percent of their QLICIs in Non-Metropolitan counties.
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 NMTC 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 NMTC 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
the Allocatees 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 by
requiring any or all Allocatees to commit up to the maximum percentage
of QLICIs that they indicated would be targeted to Non-Metropolitan
counties, the CDFI Fund may add additional highly qualified Rural CDEs
(in descending order of final rank score) to the Allocatee pool. In
order to accommodate any additional Allocatees within the allocation
limitations, a formula reduction will be applied as uniformly as
possible, to the allocation amount for all Allocatees in the pool that
have not committed to investing a minimum of 20 percent of their QLICIs
in Non-Metropolitan counties.
E. Right of rejection: The CDFI Fund reserves the right to reject
any NMTC Allocation Application in the case of a prior CDFI Fund award
recipient, 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 or any other agreement under
any CDFI Fund program. 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, Allocation Agreement, or any other agreement under any CDFI
Fund program with the CDFI Fund.
The CDFI Fund reserves the right to reject or reduce the allocation
award amount of any NMTC Allocation Application in the case of a prior
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, business type, fees, markets served (i.e. service area), and
notable relationships) set forth in the Allocation Application(s)
related to such prior NMTC Allocation(s) or such Applicant has been
found by the IRS to have engaged in a transaction or series of
transactions designed to achieve a result that is inconsistent with the
purposes of IRC 45D. The CDFI Fund also reserves the right to reject or
reduce the allocation award amount of any NMTC Allocation Application
in the case of an Affiliate of the Applicant that is a prior Allocatee
and 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, business type, fees,
markets served (i.e., service area), and notable relationships) set
forth in the Allocation Application(s) related to such prior NMTC
Allocation(s) or has been found by the IRS to have engaged in a
transaction or series of transactions designed to achieve a result that
is inconsistent with the purposes of IRC 45D.
The CDFI Fund reserves the right to reject an NMTC Allocation
Application if information (including, but not limited to,
administrative errors; submission of inaccurate information; or
omission of information) 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, its Affiliate(s), or the Controlling Entity, if such fraud
or mismanagement by the Affiliate(s) or 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.
The CDFI Fund reserves the right to reject any NMTC Allocation
Application if additional information is obtained that, after further
due diligence and in the discretion of the CDFI Fund, would hinder the
Applicant's ability to effectively perform under the Allocation
Agreement.
In the case of Applicants (or the Controlling Entity, or
Affiliates) that are regulated or receive oversight by the Federal
government or a state agency (or comparable entity), the CDFI Fund may
request additional information from the Applicant regarding Assurances
and Certifications or other information about the ability of the
Applicant to effectively perform under the Allocation Agreement. The
NMTC Allocation recommendation panel or selecting official(s)
reserve(s) the right to consult with and take into consideration the
views of the appropriate Federal banking and other regulatory agencies.
In the case of Applicants (or Affiliates of Applicants) that are also
Small Business Investment Companies,
[[Page 73092]]
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.
An Applicant that is or is affiliated with an insured depository
institution will not be awarded an NMTC Allocation if it has a
composite rating of ``5'' on its most recent examination, performed in
accordance with the Uniform Financial Institutions Rating System.
Furthermore, the CDFI Fund will not award an NMTC Allocation to an
Applicant that is an insured depository institution or is an Affiliate
of an insured depository institution, if during the time period
beginning with the application deadline and ending with the execution
of the CY 2023 Allocation Agreement; the Applicant received any of the
following: 1. CRA assessment rating of below ``Satisfactory'' on its
most recent examination; 2. A going concern opinion on its most recent
audit; or 3. A Prompt Corrective Action directive from its regulator.
The CDFI Fund reserves the right to conduct additional due
diligence on all Applicants, as determined reasonable and appropriate
by the CDFI Fund, in its sole discretion, related to the Applicant,
Affiliates, the Applicant's Controlling Entity and the officers,
directors, owners, partners and key employees of each. This includes
the right to consult with the IRS if the Applicant (or the Controlling
Entity, or Affiliates) has previously been awarded an NMTC Allocation.
F. Allocation Announcement: Each Applicant will be informed of the
CDFI Fund's award decision through an electronic notification whether
selected for an allocation or not selected for an allocation, which may
be for reasons of application incompleteness, ineligibility, or
substantive issues. Eligible Applicants that are not selected for an
allocation based on substantive issues may receive information on the
score ranges of applications that are selected for an allocation. This
information 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.
The CDFI Fund reserves the right, in its sole discretion, to
rescind an allocation made under this NOAA, should an Allocatee be
identified as ineligible due to pending or delinquent debt to the
Federal government in the Do Not Pay database.
There is no right to appeal the CDFI Fund's NMTC Allocation
decisions. The CDFI Fund's NMTC Allocation decisions are final.
VI. Award Administration Information
A. Allocation Award Compliance
1. Failure to meet reporting requirements: If an Allocatee, or an
Affiliate of an Allocatee, is a prior CDFI Fund award recipient 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) or any other agreement under any CDFI
Fund program as of the date the CDFI Fund provides notification of an
NMTC Allocation award or thereafter, the CDFI Fund reserves the right,
in its sole discretion, to reject the application, delay entering into
an Allocation Agreement, and/or impose limitations on an Allocatee's
ability to issue QEIs to investors until said prior award recipient or
Allocatee is current on the reporting requirements in the previously
executed assistance, allocation, or award agreement(s) or any other
agreement under any CDFI Fund program. Please note that the automated
systems the CDFI Fund uses for receipt of reports submitted
electronically typically acknowledges only a report's receipt; such an
acknowledgment does not warrant that the report received was complete
and therefore met reporting requirements.
2. Pending determination of noncompliance or default: If an
Allocatee is a prior award recipient or Allocatee under any CDFI Fund
program and if: (i) it has demonstrated noncompliance with a previous
assistance or award agreement or a default under an Allocation
Agreement or any other agreement under any CDFI Fund program; and (ii)
the entity has been given a timeframe to cure the noncompliance or
default, 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,
during the time period given for the entity to cure the noncompliance
or default and until such time as the CDFI Fund makes a final
determination that the entity is in noncompliance or default, and
determination of remedies, if applicable, in the sole determination of
the CDFI Fund. Further, if an Affiliate of an Allocatee is a prior CDFI
Fund award recipient or Allocatee and if such entity: (i) has
demonstrated noncompliance under a previous assistance or award
agreement or default under a previous Allocation Agreement or any other
agreement under any CDFI Fund program; and (ii) the entity has been
given a timeframe to cure the noncompliance or default, 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, during the time period given for
the entity to cure the noncompliance or default and until such time as
the CDFI Fund makes a final determination that the entity is in
noncompliance or default, and determination of remedies, if applicable,
in the sole determination of the CDFI Fund. If the prior award
recipient, Allocatee or Affiliate of the Allocatee in question is
unable to satisfactorily resolve the issues of noncompliance or
default, 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. Determination of noncompliance or default status: If 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 award recipient or Allocatee under any CDFI Fund program is (i)
noncompliant with a previously executed assistance or award agreement,
or is in default of a previously executed Allocation Agreement or any
other agreement under any CDFI Fund program; (ii) the CDFI Fund has
provided written notification of such determination to such
organization; and (iii) the noncompliance or default occurs during the
time period beginning 12 months prior to the application deadline and
ending with the execution of the CY 2023 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, or to terminate and rescind the
NMTC Allocation made under this NOAA.
Furthermore, if prior to entering into an Allocation Agreement
through this NOAA: (i) the CDFI Fund has made a final determination
that an Affiliate of an Allocatee that is a prior CDFI Fund award
recipient or Allocatee under any CDFI Fund programs is in noncompliance
of a previously executed assistance or award agreement or in default of
a previously executed
[[Page 73093]]
Allocation Agreement(s) or any other agreement under any CDFI Fund
program; (ii) the CDFI Fund has provided written notification of such
determination to such organization; and (iii) the default occurs during
the time period beginning 12 months prior to the application deadline
and ending with the execution of the CY 2023 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, or to terminate and
rescind the NMTC Allocation made under this NOAA.
B. Allocation Agreement: Each Allocatee (including their Subsidiary
Allocatees) 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 QALICBs, 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) commitments to
specific innovative investments discussed by the Allocatee in its
Allocation Application; (v) the time period by which the Allocatee may
obtain QEIs from investors; (vi) reporting requirements for the
Allocatee; and (vii) a requirement to maintain certification as a CDE
throughout the term of the Allocation Agreement. If an Allocatee
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 Allocatee hold a majority
equity interest, the Allocation Agreement will contain a covenant to
that effect. In addition to entering into an Allocation Agreement, each
Allocatee 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 Allocatee (and its Subsidiary Allocatees,
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 Allocatees, 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 Allocatees. The CDFI Fund reserves the right, in its sole
discretion, to rescind its NMTC 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, including an approved legal opinion,
within the deadlines set by the CDFI Fund.
C. 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.
D. Reporting: The CDFI Fund will collect information, on at least
an annual basis from all Allocatees and/or CDEs that 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 require the Allocatee to retain
information as the CDFI Fund deems necessary or desirable and shall
provide such information to the CDFI Fund when requested 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 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 Mondays through Fridays,
between the hours of 9:00 a.m. and 5:00 p.m. ET through the last day to
contact the CDFI Fund. The CDFI Fund will not respond to phone calls
emails, or Service Requests in AMIS concerning the application that are
received after the last day to contact the CDFI Fund. The CDFI Fund
will respond to such phone calls, emails, or Service Requests in AMIS
after the Allocation Application deadline in Table 1. Applications and
other information regarding the CDFI Fund and its programs may be
obtained from the CDFI Fund's website at https://www.cdfifund.gov. The
CDFI Fund will post on its website responses to questions of general
applicability regarding the NMTC Program.
A. Information technology support: Technical support can be
obtained by calling (202) 653-0422 or by submitting a Service Request
in AMIS. People who have visual or mobility impairments that prevent
them from accessing the Low-Income Community maps using the CDFI Fund's
website should call (202) 653-0422 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 submitting a Service Request in AMIS; or by
telephone at (202) 653-0421. 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 submitting a Service Request in AMIS, or by
telephone at (202) 653-0421. These are not toll free numbers.
D. IRS support: For questions regarding the tax aspects of the NMTC
Program, contact James Holmes and Dillon Taylor, Office of the Chief
Counsel (Passthroughs and Special Industries), IRS, by telephone at
(202) 317-4137, or by facsimile at (855) 591-7867. These are not toll
free numbers. Applicants wishing for a formal ruling request should see
IRS Internal Revenue Bulletin 2020-1, issued January 4, 2020.
VIII. Information Sessions
In connection with this NOAA, the CDFI Fund may conduct one or more
information sessions that will be produced in Washington, DC and
[[Page 73094]]
broadcast over the internet via webcasting as well as telephone
conference calls. For further information on these upcoming information
sessions, please visit the CDFI Fund's website at https://www.cdfifund.gov.
Authority: 26 U.S.C. 45D; 31 U.S.C. 321; 26 CFR 1.45D-1.
Marcia Sigal,
Acting Director, Community Development Financial Institutions Fund.
[FR Doc. 2023-23485 Filed 10-23-23; 8:45 am]
BILLING CODE 4810-05-P