New Markets Tax Credit Program, 70835-70846 [E6-20669]

Agencies

• Community Development Financial Institutions Fund
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 71, Number 234 (Wednesday, December 6, 2006)]
[Notices]
[Pages 70835-70846]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20669]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


New Markets Tax Credit Program

Funding Opportunity Title: Notice of Allocation Availability (NOAA) 
Inviting Applications for the CY 2007 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 
February 28, 2007. Paper applications must be postmarked on or before 
February 28, 2007 (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 January 12, 2007 (see Section III. of this NOAA 
for more details).
    Executive Summary: This NOAA is issued in connection with the 
calendar year 2007 tax credit allocation round of the New Markets Tax 
Credit (NMTC) Program, as authorized by Title I, subtitle C, section 
121 of the Community Renewal Tax Relief Act of 2000 (the Act). Through 
the NMTC Program, the Community Development Financial Institutions Fund 
(the Fund) provides authority to CDEs to offer an incentive to 
investors in the form of a tax credit 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 Fund announces the 
availability of $3.9 billion of NMTC authority, which includes $3.5 
billion authorized by the Act and $400 million authorized by the Gulf 
Opportunity Zone (GO Zone) Act of 2005 (Pub. L. 109-135) for allocation

[[Page 70836]]

to CDEs seeking to finance redevelopment and recovery in the Hurricane 
Katrina GO Zone.
    In this NOAA, the Fund addresses specifically 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: As noted above, this NOAA contains 
application information related to the allocation of NMTCs pursuant to 
both the Act and the GO Zone Act. Accordingly, this NOAA is different 
from the CY 2006 NOAA in that this NOAA contains GO Zone application 
information that was used for the allocation of CY 2006 GO Zone NMTC 
authority, as set forth in the Amendment of Notice of Allocation 
Availability for the CY 2006 Allocation Round of the NMTC Program, 
published in the Federal Register on March 10, 2006 (71 FR 12423), 
herein updated for the CY 2007 allocation round.
    B. Program guidance and regulations: This NOAA provides guidance 
for the application and allocation of NMTCs for the fifth round of the 
NMTC Program and should be read in conjunction with: (i) guidance 
published by the 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 
fifth NMTC Program allocation round. All such materials may be found on 
the Fund's Web site at https://www.cdfifund.gov. The 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, the Act or the IRS regulations.

II. Allocation Information

    A. Allocation amounts: Pursuant to the Act, the 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). The Fund 
anticipates that, under this NOAA, it will not issue more than $150 
million in tax credit allocation authority per applicant for the $3.5 
billion. In addition, pursuant to the GO Zone Act, the Fund expects 
that it may allocate to CDEs the authority to issue to their investors 
up to the aggregate amount of $400 million in equity as to which NMTCs 
may be claimed for investments made in the GO Zone. The Fund 
anticipates that, under this NOAA, it will not issue more than $100 
million in tax credit allocation authority per GO Zone allocation 
applicant. The Fund, in its sole discretion, reserves the right to 
allocate amounts in excess of or less than the anticipated maximum 
allocation amount if the Fund deems it appropriate. In order to receive 
an allocation in excess of the $150 million cap (or $100 million cap, 
in the case of a GO Zone allocation), an applicant will likely need to 
demonstrate, for example, that: (i) No part of its strategy can be 
successfully implemented without an allocation in excess of the 
applicable cap; or (ii) its strategy will produce extraordinary 
community impact. The 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. Notice of Allocation and Allocation Agreement: Each Allocatee 
under this NOAA must sign a Notice of Allocation and an Allocation 
Agreement before the NMTC Allocation is effective. The Notice of 
Allocation and the Allocation Agreement contain 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 both the $3.5 billion in general NMTC allocation 
authority and the $400 million in GO Zone allocation authority (see 
Section V.(C) for additional information regarding GO Zone 
eligibility). Applicants must indicate in the application materials 
whether they are applying for general NMTC allocation authority, GO 
Zone allocation authority, or both.
    1. CDE certification: For purposes of this NOAA, the Fund will not 
consider an application for an allocation of NMTCs unless: (a) The 
applicant is certified as a CDE at the time the 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 
January 12, 2007. Applicants for certification may obtain a CDE 
certification application through the Fund's Web site at https://
www.cdfifund.gov. Applications for CDE certification must be submitted 
as instructed in the application form. An applicant that is a community 
development financial institution (CDFI) or a specialized small 
business investment company (SSBIC) does not need to submit a CDE 
certification application, but must register as a CDE on the Fund's 
website on or before 5 p.m. ET on January 12, 2007. The 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 Fund; and said request must be received by the 
Fund by 5 p.m. ET on February 28, 2007. 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 
cdfihelp@cdfi.treas.gov 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 Fund's programs is not 
indicative of success under this NOAA. Prior awardees of any component 
of the Fund's Community Development Financial Institutions (CDFI) 
Program, Bank Enterprise Award (BEA) Program, the Native Initiatives, 
or any other Fund program and prior Allocatees under the NMTC Program 
are eligible to apply under this NOAA, except as follows:
    (a) Prior Allocatees and Qualified Equity Investment issuance 
requirements: A prior Allocatee in the first round of the NMTC Program 
(CY 2001-2002) 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 February 15, 2007, it has: (i) Issued and received funds in-hand 
(the term ``funds in-hand'' does not include committed funding) from 
its investors for at least 80 percent of its Qualified Equity 
Investments relating to its CY 2001-2002 NMTC Allocation; or (ii) 
issued and received funds in-hand from its investors for at least 60 
percent of its Qualified Equity Investments and that

[[Page 70837]]

100 percent of its total CY 2001-2002 NMTC Allocation has been 
exchanged for funds in-hand from, or has been committed by, its 
investors. A prior Allocatee in the second round of the NMTC Program 
(CY 2003-2004) is not eligible to receive a NMTC Allocation pursuant to 
this NOAA unless the Allocatee can demonstrate that, as of 11:59 p.m. 
ET on February 15, 2007, it has: (i) Issued and received funds in-hand 
from its investors for at least 60 percent of its Qualified Equity 
Investments relating to its CY 2003-2004 NMTC Allocation; or (ii) 
issued and received funds in-hand from its investors for at least 50 
percent of its Qualified Equity Investments and that at least 80 
percent of its total CY 2003-2004 NMTC Allocation has been exchanged 
for funds in-hand from, or has been committed by, its investors. A 
prior Allocatee in the third round of the NMTC Program (CY 2005) is not 
eligible to receive a NMTC Allocation pursuant to this NOAA unless the 
Allocatee can demonstrate that, as of 11:59 p.m. ET on February 15, 
2007, it has: (i) Issued and received funds in-hand from its investors 
for at least 50 percent of its Qualified Equity Investments relating to 
its CY 2005 NMTC Allocation; or (ii) issued and received funds in-hand 
from its investors for at least 40 percent of its Qualified Equity 
Investments and that at least 80 percent of its total CY 2005 NMTC 
Allocation has been exchanged for funds in-hand from, or has been 
committed by, its investors. A prior Allocatee in the fourth round of 
the NMTC Program (CY 2006) is not eligible to receive a NMTC Allocation 
pursuant to this NOAA unless the Allocatee can demonstrate that, as of 
11:59 p.m. ET on February 15, 2007, it has: (i) Issued and received 
funds in-hand from its investors for at least 50 percent of its 
Qualified Equity Investments relating to its CY 2006 NMTC Allocation; 
or (ii) issued and received funds in-hand from its investors for at 
least 20 percent of its Qualified Equity Investments and that at least 
60 percent of its total CY 2006 NMTC Allocation has been exchanged for 
funds in-hand from, or has been committed by, its investors. Fourth 
round Allocatees that received GO Zone allocations are not required to 
meet the above Qualified Equity Investment issuance and commitment 
thresholds with regard to the GO Zone NMTCs. Further, an entity is not 
eligible to receive a NMTC Allocation pursuant to this NOAA if another 
entity that Controls the applicant, is Controlled by the applicant or 
shares common management officials with the applicant (as determined by 
the Fund) is a prior Allocatee and has not met the requirements for the 
issuance and/or commitment of Qualified Equity Investments as set forth 
above for the Allocatees in the prior allocation rounds of the NMTC 
Program.
    Notwithstanding the above, if an applicant has received an 
allocation in multiple allocation rounds of the NMTC Program, the 
applicant shall be deemed to be eligible to apply for a NMTC Allocation 
pursuant to this NOAA if the applicant can demonstrate that, as of 
11:59 p.m. ET on February 15, 2007, it has issued and received funds 
in-hand from its investors for at least 70 percent of its Qualified 
Equity Investments relating to its cumulative allocation amounts from 
prior NMTC Program rounds (CY 2002-2006), exclusive of GO Zone 
allocations received by allocatees under the CY 2006 allocation round.
    For purposes of this section of the NOAA, the Fund will only count 
as ``issued'' those Qualified Equity Investments that have been 
finalized in the Fund's Allocation Tracking System (ATS) by the 
deadlines specified above. Allocatees and their Subsidiary transferees, 
if any, are advised to access ATS to record each Qualified Equity 
Investment that they issue to an investor in exchange for funds in-
hand. For purposes of this section of the NOAA, ``committed'' Qualified 
Equity Investments 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 Qualified Equity Investment; (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 February 15, 2009. The 
applicant will be required, upon notification from the Fund, to submit 
adequate documentation to substantiate the required issuances of and 
commitments for Qualified Equity Investments.
    (b) Failure to meet reporting requirements: The Fund will not 
consider an application submitted by an applicant if the applicant, or 
an entity that Controls the applicant, is Controlled by the applicant 
or shares common management officials with the applicant (as determined 
by the Fund) is a prior Fund awardee or Allocatee under any 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 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 Fund program and if: (i) It has 
submitted complete and timely reports to the Fund that demonstrate 
noncompliance with a previous assistance, award or Allocation 
Agreement; and (ii) the 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 Fund will consider the applicant's 
application under this NOAA pending full resolution, in the sole 
determination of the Fund, of the noncompliance. Further, if another 
entity that Controls the applicant, is Controlled by the applicant or 
shares common management officials with the applicant (as determined by 
the Fund), is a prior Fund awardee or Allocatee and if such entity: (i) 
Has submitted complete and timely reports to the Fund that demonstrate 
noncompliance with a previous assistance, award or Allocation 
Agreement; and (ii) the 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 Fund will consider the applicant's 
application under this NOAA pending full resolution, in the sole 
determination of the Fund, of the noncompliance.
    (d) Default status: The Fund will not consider an application 
submitted by an applicant that is a prior Fund awardee or Allocatee 
under any Fund program if, as of the application deadline of this NOAA, 
the Fund has made a final determination that such applicant is in 
default of a previously executed assistance, allocation or award 
agreement(s) and the 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 Fund has made a final determination that 
another entity that Controls the applicant, is Controlled by the 
applicant or shares common management officials with the applicant (as 
determined by the Fund): (i) Is a prior Fund awardee or Allocatee under 
any Fund program; (ii) has been determined by the Fund to be in default 
of a previously executed assistance,

[[Page 70838]]

allocation or award agreement(s); and (iii) the Fund has provided 
written notification of such determination to the defaulting entity.
    (e) Termination in default: The Fund will not consider an 
application submitted by an applicant that is a prior Fund awardee or 
Allocatee under any Fund program if: (i) Within the 12-month period 
prior to the application deadline of this NOAA, the 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 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 in such applicant's 2005 or 2006 fiscal year. 
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 Fund has made a final 
determination that another entity that Controls the applicant, is 
Controlled by the applicant or shares common management officials with 
the applicant (as determined by the Fund), is a prior Fund awardee or 
Allocatee under any Fund program whose award or allocation terminated 
in default of a previously executed assistance, allocation or award 
agreement(s); (ii) the 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 in the defaulting entity's 2005 or 2006 fiscal 
year.
    (f) Undisbursed balances: The Fund will not consider an application 
submitted by an applicant that is a prior Fund awardee under any Fund 
program if the applicant has a balance of undisbursed funds (defined 
below) under said prior award(s), as of the application deadline of 
this NOAA. Further, an entity is not eligible to apply for an award 
pursuant to this NOAA if another entity that Controls the applicant, is 
Controlled by the applicant or shares common management officials with 
the applicant (as determined by the Fund), is a prior Fund awardee 
under any Fund program, and has a balance of undisbursed funds under 
said prior award(s), as of the application deadline of this NOAA. In a 
case where another entity that Controls the applicant, is Controlled by 
the applicant or shares common management officials with the applicant 
(as determined by the Fund) is a prior Fund awardee under any Fund 
program, and has a balance of undisbursed funds under said prior 
award(s) as of the application deadline of this NOAA, the Fund will 
include the combined awards of the applicant and such affiliated 
entities when calculating the amount of undisbursed funds.
    For purposes of this section, ``undisbursed funds'' is defined as: 
(i) In the case of a prior BEA Program award(s), any balance of award 
funds equal to or greater than five (5) percent of the total prior BEA 
Program award(s) that remains undisbursed more than three (3) years 
after the end of the calendar year in which the Fund signed an award 
agreement with the awardee; and (ii) in the case of a prior CDFI 
Program or other Fund program award(s), any balance of award funds 
equal to or greater than five (5) percent of the total prior award(s) 
that remains undisbursed more than two (2) years after the end of the 
calendar year in which the Fund signed an assistance agreement with the 
awardee. ``Undisbursed funds'' does not include (i) tax credit 
allocation authority made available through the NMTC Program; (ii) any 
award funds for which the Fund received a full and complete 
disbursement request from the awardee by the application deadline of 
this NOAA; and (iii) any award funds for an award that has been 
terminated, expired, rescinded or deobligated by the Fund. For the 
purpose of calculating ``undisbursed funds'', the Fund will only take 
into consideration Fund awards for which there is an Assistance 
Agreement or Award Agreement between the awardee and the Fund that has 
not been closed out or terminated by the Fund.
    (g) Contact the Fund: Accordingly, applicants that are prior 
awardees and/or Allocatees under any other Fund program are advised to: 
(i) Comply with the requirements specified in assistance, allocation 
and/or award agreement(s), and (ii) contact the 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 
cme@cdfi.treas.gov and all disbursement questions should be directed to 
the Grants Manager by e-mail at grantsmanagement@cdfi.treas.gov. Both 
the Compliance Manager and the Grants Manager can be reached by 
telephone at (202) 622-8226; by facsimile at (202) 622-6453; or by mail 
to CDFI Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 
20005. The Fund will respond to applicants' reporting, compliance or 
disbursement questions between the hours of 9 a.m. and 5 p.m. ET, 
starting the date of publication of this NOAA through February 26, 2007 
(2 days before the application deadline). The 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 February 26, 2007 until 
after the funding application deadline of February 28, 2007.
    3. Entities that propose to transfer NMTCs to Subsidiaries: Both 
for-profit and non-profit CDEs may apply to the 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 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(s). The 
Subsidiary transferee(s) should: (i) Submit a CDE certification 
application to the Fund within 30 days after the non-profit applicant 
receives a Notice of Allocation from the Fund; and (ii) must be 
certified as a CDE prior to entering into an Allocation Agreement with 
the Fund. The NMTC Allocation transfer must be pre-approved by the 
Fund, in its sole discretion, and will be a condition of the Allocation 
Agreement. A for-profit applicant that receives a NMTC Allocation may 
transfer such NMTC Allocation to its for-profit Subsidiary or 
Subsidiaries, provided that said Subsidiary transferees have been 
certified as CDEs and such transfer is pre-approved by the Fund, in its 
sole discretion. Any transfer will be a condition of the Allocation 
Agreement.
    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 Fund. Rather, 
the Fund will require each applicant to indicate, in its NMTC 
allocation application, whether it intends to transfer all or a portion 
of its NMTC Allocation to a Subsidiary and its timeline for doing so. 
As stated above, in no circumstance will the Fund authorize such a 
transfer until the Fund has certified the Subsidiary transferee as a 
CDE.
    4. Entities that submit applications together with Affiliates; 
applications from common enterprises: (a) As part of the allocation 
application review process, the Fund considers whether applicants are 
Affiliates, as such term is defined in the allocation application. If 
an applicant and its Affiliates wish to

[[Page 70839]]

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 Fund reserves the right either to reject all such 
applications received or to select a single application as the only one 
that will be considered for an allocation.
    For purposes of this NOAA, in addition to assessing whether 
applicants meet the definition of the term ``Affiliate'' found in the 
allocation application, the Fund will consider: (i) Whether the 
activities described in applications submitted by separate entities 
are, or will be, operated or managed as a common enterprise that, in 
fact or effect, could 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 that, in fact or 
effect, they could be viewed as substantially identical applications. 
In such cases, the Fund reserves the right either to reject all 
applications received from all such entities or to select a single 
application as the only one that will be considered for an allocation.
    (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 Qualified Equity Investment 
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 Fund's Web site at https://
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 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 may submit applications under this NOAA either 
electronically or in paper form. Shortly following the publication of 
this NOAA, the Fund will make available the electronic allocation 
application on its Web site at https://www.cdfifund.gov. The Fund will 
send application materials to applicants that are unable to download 
them from the Web site. To have application materials sent to you, 
contact the Fund by telephone at (202) 622-6355; by e-mail at 
cdfihelp@cdfi.treas.gov; or by facsimile at (202) 622-7754. These are 
not toll free numbers.

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 Fund's Web 
site. Additional information, including instructions relating to the 
submission of signature forms and supporting information, is set forth 
in further detail in the electronic application. An application must 
include a valid and current Employer Identification Number (EIN) issued 
by the Internal Revenue Service and assigned to the applicant and, if 
applicable, its Controlling Entity; electronic applications without a 
valid EIN are incomplete and cannot be transmitted to the Fund; paper 
applications submitted without a valid EIN will be rejected as 
incomplete and returned to the sender. For more information on 
obtaining an EIN, please contact the Internal Revenue Service at (800) 
829-4933 or https://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. 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 submit applications under this NOAA either 
electronically or in paper form. Applications sent by facsimile or by 
e-mail will not be accepted. In order to expedite application review, 
the Fund expects applicants to submit applications electronically (via 
an Internet-based application) in accordance with the instructions 
provided on the Fund's Web site. Submission of an electronic 
application will facilitate the processing and review of applications 
and the selection of Allocatees; further it will assist the Fund in the 
implementation of electronic reporting requirements.
1. Electronic Applications
    Electronic applications must be submitted solely by using the 
Fund's Web site and must be sent in accordance with the submission 
instructions provided in the electronic application form. Applicants 
need access to Internet Explorer 5.5 or higher or Netscape Navigator 
6.0 or higher, Windows 98 or higher (or other system compatible with 
the above Explorer and Netscape software) and optimally at least a 
56Kbps Internet connection in order to meet the electronic application 
submission requirements. The 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

[[Page 70840]]

relating to the submission of signature forms and supporting 
information, is set forth in further detail in the electronic 
application.
2. Paper Applications
    If an applicant is unable to submit an electronic application, it 
must submit to the Fund a request for a paper application using the 
NMTC Program Paper Application Submission Form, and the request must be 
received by 5 p.m. ET on February 14, 2007. The NMTC Program Paper 
Application Submission Form may be obtained from the Fund's Web site at 
https://www.cdfifund.gov or the form may be requested by e-mail to 
paper_request@cdfi.treas.gov or by facsimile to (202) 622-7754. The 
completed NMTC Program Paper Application Submission Form should be 
directed to the Fund's Chief Information Officer and must be sent by 
facsimile to (202) 622-7754.

D. Application Submission Dates and Times

1. Application Deadlines
    (a) Electronic applications must be received by 5 p.m. ET on 
February 28, 2007. Electronic applications cannot be transmitted or 
received after 5 p.m. ET on February 28, 2007. In addition, applicants 
that submit electronic applications must separately submit (by mail or 
other courier delivery service) an original signature page, and all 
other required paper attachments. The original signature page and 
additional documents must be postmarked on or before March 5, 2007. See 
application instructions, provided in the electronic application, for 
further detail. Applications and other required documents and other 
attachments postmarked or received after these dates and times will be 
rejected and returned to the sender. If the original signature page is 
not postmarked by the deadlines specified above, the application will 
be rejected and returned to the sender. See Section IV.D.1(c) of this 
NOAA for further requirements relating to postmarks. Additional 
deadlines (if any) relating to the submission of general supporting 
documentation will be further detailed in the electronic application. 
Please note that the document submission deadlines in this NOAA and/or 
the allocation application are strictly enforced.
    (b) Paper applications, including the requisite original signature 
page, and all other required paper attachments must be postmarked on or 
before February 28, 2007. Paper applications postmarked after this 
deadline will not be accepted for consideration and will be returned to 
the sender.
    (c) For purposes of this NOAA, the term `` postmark'' is defined by 
26 CFR 301.7502-1. In general, the Fund will require that the 
postmarked document bear a postmark date that is on or before the 
applicable deadline. The document must be in an envelope or other 
appropriate wrapper, properly addressed as set forth in this NOAA and 
delivered by the United States Postal Service or any other private 
delivery service designated by the Secretary of the Treasury. For more 
information on designated delivery services, please see IRS Notice 
2002-62, 2002-2 C.B. 574.

E. Intergovernmental Review

    Not applicable.

F. Funding Restrictions

    For allowable uses of investment proceeds related to a NMTC 
Allocation, please see 26 U.S.C. 45D and the final regulations issued 
by the Internal Revenue Service (26 CFR 1.45D-1, published on December 
28, 2004) and related guidance. Please see Section I., above, for the 
Programmatic Improvements of this NOAA.

G. Other Submission Requirements

    Addresses: Paper applications and the signature page and 
attachments for electronic applications must be sent as directed in the 
application materials to the Bureau of Public Debt, the application 
intake coordinator for the Fund. Paper applications and the signature 
page or attachments will not be accepted at the Fund's offices in 
Washington, DC. Paper applications and signature pages or attachments 
received in the Fund's offices will be rejected and returned to the 
sender. Except for the signature page and attachments, electronic 
applications must be submitted solely by using the Fund's Web site and 
must be sent in accordance with the submission instructions provided in 
the electronic application form.

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 Fund will 
evaluate each application, assigning points and numeric scores with 
respect to the criteria described below. In Phase 2, the Fund will rank 
applicants in accordance with the procedures set forth below.

A. Criteria

1. Business Strategy (25-Point Maximum)
    (a) In 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 
Qualified Equity Investments; 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; and the extent to which the applicant intends to 
make Qualified Low-Income Community Investments 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: (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 it: (i) Has a track record of successfully providing products and 
services similar to those it intends to use with the proceeds of 
Qualified Equity Investments; (ii) has identified, or has a process for 
identifying, potential transactions; (iii) demonstrates a likelihood of 
issuing Qualified Equity Investments and making the related Qualified 
Low-Income Community Investments in a time period that is significantly 
shorter than the 5-year period permitted under IRC Sec.  45D(b)(1); and 
(iv) in the case of an applicant proposing to purchase loans from CDEs, 
the applicant will require the CDE selling such loans to re-invest the 
proceeds of the loan sale to provide additional products and services 
to Low-Income Communities.
    (b) Priority Points. In addition, as provided by IRC Sec.  
45D(f)(2), the Fund will ascribe additional points to entities that 
meet either or both of the statutory priorities. First, the 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 Fund will give 
five (5) additional points

[[Page 70841]]

to any applicant that intends to satisfy the requirement of IRC Sec.  
45D(b)(1)(B) by making Qualified Low-Income Community Investments in 
one or more businesses in which persons unrelated to an applicant 
(within the meaning of IRC Sec.  267(b) or IRC Sec.  707(b)(1)) hold 
the majority equity interest. Applicants may earn points for either or 
both statutory priorities. Thus, applicants that meet the requirements 
of both priority categories can receive up to a total of ten (10) 
additional points. A record of having successfully provided capital or 
technical assistance to disadvantaged businesses or communities may be 
demonstrated either by the past actions of an applicant itself or by 
its Controlling Entity (e.g., where a new CDE is established by a 
nonprofit corporation with a history of providing assistance to 
disadvantaged communities). An applicant that receives additional 
points for intending to make investments in unrelated businesses and is 
awarded a NMTC Allocation must meet the requirements of IRC Sec.  
45D(b)(1)(B) by investing substantially all of the proceeds from its 
Qualified Equity Investments in unrelated businesses. The 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 impact on communities expected to 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 and economic impacts 
in its Low-Income Communities, and whether the applicant is working in 
particularly economically distressed markets and/or in concert with 
Federal, state or local government or community economic development 
initiatives (e.g., Empowerment Zones, Enterprise Communities, and 
Renewal Communities). An applicant will generally score well under this 
section to the extent that: (a) It articulates how its strategy is 
likely to produce significant and measurable community development and 
economic impacts that would not be achieved without NMTCs; and (b) it 
is working in particularly economically distressed or otherwise 
underserved communities and/or in concert with other Federal, state or 
local government or community economic development initiatives.
3. Management Capacity (25-Point Maximum)
    In assessing an applicant's management capacity, reviewers will 
consider, among other things, the qualifications of the applicant's 
principals, its board members, its management team, and other essential 
staff or contractors, with specific focus on: experience in deploying 
capital or technical assistance, including activities similar to those 
described in the applicant's business strategy; experience in raising 
capital; asset management and risk management experience; experience 
with fulfilling compliance requirements of other governmental programs, 
including other tax programs; and the applicant's (or its Controlling 
Entity's) financial health. Reviewers will also consider the extent to 
which an applicant has protocols in place to ensure ongoing compliance 
with NMTC Program requirements, and the level of involvement of 
community representatives and other stakeholders in the design, 
implementation or monitoring of an applicant's business plan and 
strategy. In the case of an applicant (or any entity that Controls the 
applicant, is Controlled by the applicant or shares common management 
officials with the applicant (as determined by the Fund)) that has 
received a NMTC Allocation from the Fund under a prior allocation 
round, reviewers will consider the activities that have occurred to 
date with respect to the prior allocation(s).
    An applicant will generally score well under this section to the 
extent that its management team or other essential personnel have 
experience in: (a) Deploying capital or technical assistance in Low-
Income Communities, particularly those likely to be served by the 
applicant with the proceeds of Qualified Equity Investments; (b) 
raising capital, particularly from for-profit investors; (c) asset and 
risk management; and (d) fulfilling government compliance requirements, 
particularly tax program compliance. An applicant will also score well 
to the extent it has policies and systems in place to ensure ongoing 
compliance with NMTC Program requirements, and to the extent that Low-
Income Community stakeholders play an active role in designing or 
implementing its business plan. In the case of an applicant (or any 
entity that Controls the applicant, is Controlled by the applicant or 
shares common management officials with the applicant (as determined by 
the Fund)) that has received a NMTC Allocation from the Fund under a 
prior allocation round, the applicant will score well to the extent it 
can: (a) Demonstrate that substantial activities have occurred through 
its prior allocation(s); and (b) substantiate a need for additional 
allocation authority.
4. Capitalization Strategy (25-Point Maximum)
    In assessing an applicant's capitalization strategy, reviewers will 
consider, among other things: The extent to which the applicant has 
secured investments, commitments to invest, or indications of interest 
in investments from investors, 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 extent to which the 
applicant identifies how existing investors will leverage their 
investments in Low-Income Communities or how new investors will be 
brought into such investments; 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 Qualified 
Equity Investments at a level that exceeds the requirements of IRC 
Sec.  45D(b)(1)(B), including the extent to which the applicant has 
identified the financial resources outside of the NMTC investments 
necessary to support its operations or finance its activities; 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 Qualified Equity 
Investments it is likely to raise and its expected investment strategy 
to deploy funds raised with NMTCs; (c) it generally demonstrates that 
the economic benefits of the tax credit will be passed through to end 
users; (d) it is likely to leverage other sources of funding in 
addition to NMTC investor dollars; and (e) it intends to invest the 
proceeds from the aggregate amount of its Qualified Equity Investments 
at a level that exceeds the requirements of IRC Sec.  45D(b)(1)(B). 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 the investor and/or

[[Page 70842]]

will target its activities to areas of greater economic distress than 
those currently targeted by the investor.

B. Review and Selection Process

    All allocation applications will be reviewed for eligibility and 
completeness. The 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 and 
returned to the sender. Once the application has been determined to be 
eligible and complete, the 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. Phase 1: Fund reviewers will evaluate and score 
each application in the first part of the review process. An applicant 
must exceed a minimum overall aggregate base score threshold and exceed 
a minimum aggregate section score threshold in each of the four 
application sections (Business Strategy, Community Impact, Management 
Capacity, and Capitalization Strategy) in order to advance from the 
first part of the substantive review process. If, in the case of a 
particular application, a reviewer's total base score or section 
score(s) (in one or more of the four application sections), varies 
significantly from the median of the reviewers' total base scores or 
section scores for such application, the 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.
    Phase 2: Once the Fund has determined which applicants have met the 
required minimum overall aggregate base score and aggregate section 
score thresholds, the 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 Fund 
will award allocations in the order of this ranking, subject to 
applicants' meeting all other eligibility requirements; provided, 
however, that the 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.
    In the case of an applicant (or any entity that Controls the 
applicant, is Controlled by the applicant or shares common management 
officials with the applicant (as determined by the Fund)) that has 
previously received an award or allocation from the Fund through any 
Fund program, the Fund will consider and will deduct points for the 
applicant's (or any entity that Controls the applicant, is Controlled 
by the applicant or shares common management officials with the 
applicant (as determined by the Fund)) failure to meet the reporting 
deadlines set forth in any assistance, award or Allocation Agreement(s) 
with the Fund during the applicant's two complete fiscal years prior to 
the application deadline of this NOAA (generally FY 2004 and 2005).

C. GO Zone Review and Selection Process

    The GO Zone is defined in the Gulf Opportunity Zone Act of 2005 as 
``that portion of the Hurricane Katrina disaster area determined by the 
President to warrant individual or individual and public assistance 
from the Federal Government under the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act by reason of Hurricane Katrina'' 
(Pub. L. 109-135, Section 101). The Hurricane Katrina Disaster Area is 
defined as ``an area with respect to which a major disaster has been 
declared by the President before September 14, 2005, under section 401 
of such Act by reason of Hurricane Katrina'' (Pub. L. 109-135, Section 
101).
    In order to be considered for any portion of the $400 million of 
special GO Zone allocation authority, an Applicant (GO Zone Applicant) 
must: (i) Meet the minimum threshold scoring criteria outlined under 
Phase I in Section B above; (ii) indicate its intent to apply as a GO 
Zone Applicant in the designated section of the CY 2007 NMTC 
application; and (iii) have a significant mission of recovery and 
development in the GO Zone. In order to demonstrate a ``significant 
mission of recovery and development in the GO Zone,'' a CDE must, at a 
minimum: (i) Include the GO Zone within its particular geographic 
service area; and (ii) demonstrate to the satisfaction of the Fund that 
it has significant resources in the GO Zone to support its recovery and 
redevelopment efforts and that it has a significant track record of 
providing financing and related services in the GO Zone. GO Zone 
Applicants must answer specified application questions pertaining to, 
among other things: (i) The extent to which the applicant has 
significant resources in the GO Zone to support its recovery and 
redevelopment efforts; (ii) the applicant's track record of providing 
financing and related services in the GO Zone; and (iii) the extent to 
which the applicant will commit to dedicating a significant percentage 
of a NMTC allocation to areas designated by FEMA as having suffered 
flooding and/or severe or catastrophic damage as a result of Hurricane 
Katrina.
    After the Fund has made its final allocation determinations for the 
$3.5 billion allocation authority, it will make final allocation 
determinations for the GO Zone allocation authority, with first 
priority given to organizations that were not selected to receive an 
allocation under the initial $3.5 billion of allocation authority. 
Within the category of GO Zone Applicants, awards will be provided in 
rank order of score, with priority given to those applicants that 
demonstrate the strongest significant mission of recovery and 
redevelopment of the GO Zone and commit to dedicating a significant 
percentage of their allocations to serve those areas designated by FEMA 
as having suffered flooding and/or severe or catastrophic damage in the 
wake of Hurricane Katrina. If GO Zone allocation authority is still 
available, the Fund may provide additional GO Zone allocation authority 
to eligible applicants that were selected to receive an allocation from 
the initial $3.5 billion, provided the Fund determines that they have 
the capacity to administer additional allocation authority in the GO 
Zone. Unallocated GO Zone allocation authority, if any, may be carried 
over into future NMTC allocation rounds, pursuant to IRC 45D(f)(3).
    D. All outstanding reports or compliance questions should be 
directed to the Compliance Manager by e-mail at cme@cdfi.treas.gov; by 
telephone at (202) 622-8226; by facsimile at (202) 622-6453; or by mail 
to CDFI Fund, 601 13th Street, NW, Suite 200 South, Washington, DC 
20005. The 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 February 26, 2007. The Fund will not 
respond to reporting or compliance phone calls or e-mail inquiries that 
are received after 5 p.m. ET on February 26, 2007 until after the 
funding application deadline of February 28, 2007.
    E. The Fund reserves the right to reject any NMTC allocation 
application in the case of a prior Fund awardee, if such applicant has 
failed to comply with the terms, conditions, and other

[[Page 70843]]

requirements of the prior or existing assistance or award agreement(s) 
with the Fund. The Fund reserves the right to reject any NMTC 
allocation application in the case of a prior 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 
Fund. The Fund reserves the right to reject any NMTC allocation 
application in the case of any applicant, if an entity that Controls 
the applicant, is Controlled by the applicant or shares common 
management officials with the applicant (as determined by the Fund), 
has failed to meet the terms, conditions and other requirements of any 
prior or existing assistance agreement, award agreement or Allocation 
Agreement with the Fund.
    The Fund reserves the right to reject any NMTC allocation 
application in the case of a prior 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 Fund also reserves the right to reject any NMTC 
allocation application in the case of any applicant, if an entity that 
Controls the applicant, is Controlled by the applicant or shares common 
management officials with the applicant (as determined by the Fund), is 
a prior 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 Fund also reserves the right to reject a NMTC allocation 
application if information (including administrative errors) comes to 
the attention of the Fund that adversely affects an applicant's 
eligibility for an award, adversely affects the Fund's evaluation or 
scoring of an application, or indicates fraud or mismanagement on the 
part of an applicant. If the Fund determines that any portion of the 
application is incorrect in any material respect, the Fund reserves the 
right, in its sole discretion, to reject the application.
    As a part of the substantive review process, the Fund may permit 
reviewer(s) to make telephone calls to applicants for the sole purpose 
of obtaining, clarifying or confirming application information. In no 
event shall such contact be construed to permit an applicant to change 
any element of its application. Reviewers will not contact applicants 
without the prior approval of the Fund. At this point in the process, 
an applicant may be required to submit additional information about its 
application in order to assist the Fund with its final evaluation 
process. Such requests must be responded to within the time parameters 
set by the 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 any entity that Controls the applicant, is Controlled by the 
applicant or shares common management officials with the applicant (as 
determined by the Fund)) that are regulated by the Federal government 
or a State agency (or comparable entity), the 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 any entity 
that Controls the applicant, is Controlled by the applicant or shares 
common management officials with the applicant (as determined by the 
Fund)) that are also Small Business Investment Companies, Specialized 
Small Business Investment Companies or New Markets Venture Capital 
Companies, the Fund reserves the right to consult with and take into 
consideration the views of the Small Business Administration.
    The Fund reserves the right to conduct additional due diligence, as 
determined reasonable and appropriate by the Fund, in its sole 
discretion, related to the applicant and its officers, directors, 
owners, partners and key employees.
    Each applicant will be informed of the Fund's award decision either 
through a Notice of Allocation if selected for an allocation (see 
Section VI.A. of this NOAA) or a declination letter, if 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 the 
strengths and weaknesses of their applications. This feedback will be 
provided in a format and within a timeframe to be determined by the 
Fund, based on available resources.
    The Fund further reserves the right to change its eligibility and 
evaluation criteria and procedures, if the Fund deems it appropriate. 
If said changes materially affect the Fund's award decisions, the Fund 
will provide information regarding the changes through the Fund's Web 
site.
    There is no right to appeal the Fund's allocation decisions. The 
Fund's allocation decisions are final.

VI. Award Administration Information

A. Notice of Allocation

    The Fund will signify its selection of an applicant as an Allocatee 
by delivering a signed Notice of Allocation to the applicant. The 
Notice of Allocation will contain the general terms and conditions 
underlying the Fund's provision of an NMTC Allocation including, but 
not limited to, the requirement that an Allocatee and the Fund enter 
into an Allocation Agreement. The applicant must execute the Notice of 
Allocation and return it to the Fund. By executing a Notice of 
Allocation, the Allocatee agrees that, if prior to entering into an 
Allocation Agreement with the Fund, information (including 
administrative errors) comes to the attention of the Fund that 
adversely affects the Allocatee's eligibility for an award, adversely 
affects the Fund's evaluation or scoring of the Allocatee's 
application, or indicates fraud or mismanagement on the part of the 
Allocatee, the Fund may, in its discretion and without advance notice 
to the Allocatee, terminate the Notice of Allocation or take such other 
actions as it deems appropriate. Moreover, by executing a Notice of 
Allocation, an Allocatee agrees that, if prior to entering into an 
Allocation Agreement with the Fund, the Fund determines that the 
Allocatee is not in compliance with the terms of any prior assistance 
agreement, award agreement, and/or Allocation Agreement entered into 
with the Fund, the Fund may, in its discretion and without advance 
notice to the Allocatee, either terminate the Notice of Allocation or 
take such other actions as it deems appropriate. The Fund reserves the 
right, in its sole discretion, to rescind the allocation and the Notice 
of Allocation if the Allocatee fails to return the Notice of 
Allocation, signed by the authorized representative of the Allocatee, 
along with any other requested documentation, by the deadline set by 
the Fund.
1. Failure To Meet Reporting Requirements
    If an Allocatee, or an entity that Controls the Allocatee, is 
Controlled by the Allocatee or shares common management officials with 
the Allocatee (as determined by the Fund) is a prior Fund awardee or 
Allocatee under any Fund program and is not current on the reporting 
requirements set forth in the

[[Page 70844]]

previously executed assistance, allocation or award agreement(s), as of 
the date of the Notice of Allocation, the 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 
Qualified Equity Investments 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 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 Fund, the Fund reserves the right, in its sole 
discretion, to terminate and rescind the Notice of Allocation and the 
allocation made under this NOAA.
2. Pending Resolution of Noncompliance
    If an applicant is a prior awardee or Allocatee under any Fund 
program and if: (i) It has submitted complete and timely reports to the 
Fund that demonstrate noncompliance with a previous assistance, award 
or Allocation Agreement; and (ii) the 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 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 Fund, of the noncompliance. Further, if 
another entity that Controls the applicant, is Controlled by the 
applicant or shares common management officials with the applicant (as 
determined by the Fund), is a prior Fund awardee or Allocatee and if 
such entity: (i) Has submitted complete and timely reports to the Fund 
that demonstrate noncompliance with a previous assistance, award or 
Allocation Agreement; and (ii) the 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 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