Notice of Allocation Availability (NOAA) Inviting Applications for the Calendar Year (CY) 2018 Allocation Round of the New Markets Tax Credit (NMTC) Program, 22115-22124 [2018-10109]

Download as PDF Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices On September 28, 2017, FRA provided public notice of this waiver request and a 15day opportunity for comment on its website. FRA also emailed notice to over 6,000 recipients that requested Buy America notices through ‘‘GovDelivery.’’ FRA received one comment. However, the commenter did not provide any information about a domestic source for a fully Buy America-compliant fire alarm system; and FRA’s MTAC concurred with Lake Electric that due to programming, interoperability, and certification issues, components are not interchangeable among systems. Therefore, fire alarm system suppliers cannot swap out components to meet Buy America. This waiver applies only to this Project for these specific components. Under 49 U.S.C. 24405(a)(4), FRA will publish this letter granting the Buy America waiver to the City in the Federal Register and provide notice of such finding and an opportunity for public comment after which this waiver will become effective. Questions about this letter can be directed to, John Johnson, Attorney-Advisor, at John.Johnson@dot.gov or (202) 493–0078. Sincerely, Ronald L. Batory, Administrator cc: Lake Electric Co. Brett Andrew Jortland, Acting Deputy Chief Counsel. [FR Doc. 2018–10042 Filed 5–10–18; 8:45 am] BILLING CODE 4910–06–P DEPARTMENT OF THE TREASURY Community Development Financial Institutions Fund Notice of Allocation Availability (NOAA) Inviting Applications for the Calendar Year (CY) 2018 Allocation Round of the New Markets Tax Credit (NMTC) Program Notice of Allocation Availability (NOAA) Inviting Applications for the Calendar Year (CY) 2018 Allocation Round of the New Markets Tax Credit (NMTC) Program. ANNOUNCEMENT TYPE: Announcement of allocation availability. DATES: Electronic applications must be received by 5:00 p.m. ET on June 28, 2018. Applications sent by mail, facsimile, or other form will not be accepted. Please note the Community Development Financial Institutions Fund (CDFI Fund) will only accept applications and attachments (e.g., the Controlling Entity’s representative signature page, investor letters, and organizational charts) in electronic form (see Section IV.C of this NOAA for more details). Applications must meet all eligibility and other requirements and deadlines, as applicable, set forth in this NOAA. Any Applicant that is not yet sradovich on DSK3GMQ082PROD with NOTICES FUNDING OPPORTUNITY TITLE: VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 certified as a Community Development Entity (CDE) must submit an application for CDE certification through the CDFI Fund’s Awards Management Information System (AMIS) on or before 5:00 p.m. ET on May 24, 2018 (see Section III.A.1 of this NOAA for more details on CDE certification). EXECUTIVE SUMMARY: This NOAA is issued in connection with the CY 2018 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) and amended by section 221 of the American Jobs Creation Act of 2004 (Pub. L. 108–357), section 101 of the Gulf Opportunity Zone Act of 2005 (Pub. L. 108–357), Division A, section 102 of the Tax Relief and Health Care Act of 2006 (Pub. L. 109–432), section 733 of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (Pub. L. 111–312), section 305 of the American Taxpayer Relief Act of 2012 (Pub. L. 112–240), section 115 of the Tax Increase Prevention Act of 2014 (Pub. L. 113–295), and section 141 of the Protecting Americans from Tax Hikes Act (PATH) of 2015. Through the NMTC Program, the CDFI Fund provides authority to CDEs to offer an incentive to investors in the form of tax credits over seven years, which is expected to stimulate the provision of private investment capital that, in turn, will facilitate economic and community development in Low-Income Communities. Through this NOAA, the CDFI Fund announces the availability of $3.5 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 2017 allocation round: 1. Prior QEI Issuance Requirements: Qualified Equity Investment (QEI) issuance threshold with respect to its prior-year allocation. These thresholds and deadlines have been revised in comparison to the CY 2017 NOAA. In this Round, the CDFI Fund is not requiring a minimum threshold of Qualified Equity Investments (QEIs) be issued as a condition of eligibility. During Phase 2, the CDFI Fund will consider prior Round Allocatees’ QEI issuance recorded in the CDFI Fund’s PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 22115 online systems as of September 24, 2018. See Section V.C of this NOAA for additional details on Phase 2 reviews. B. Program guidance and regulations: This NOAA describes application and allocation requirements for this Allocation Round of the NMTC Program and should be read in conjunction with: (i) Guidance published by the CDFI Fund on how an entity may apply to become certified as a CDE (66 Federal Register 65806, December 20, 2001); (ii) the final regulations issued by the Internal Revenue Service (the IRS) (26 CFR 1.45D–1, published on December 28, 2004), as amended and related guidance, notices and other publications; and (iii) 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, IRC § 45D or the IRS 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 regulations, the provisions of IRC § 45D and the IRS regulations shall govern. II. Allocation Information A. Allocation amounts: Pursuant to the PATH Act of 2015, the CDFI Fund expects that it may allocate to CDEs the authority to issue to their investors the aggregate amount of $3.5 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 will 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 Fund deem it appropriate. In order to receive an allocation in excess of the $100 million cap, an Applicant, at a minimum, must demonstrate that: (i) No part of its strategy can be successfully implemented without an allocation in excess of the applicable cap; and/or (ii) its strategy will produce extraordinary community outcomes. 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 E:\FR\FM\11MYN1.SGM 11MYN1 22116 Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices allocations of tax credit investment authority. C. 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 of this NOAA. sradovich on DSK3GMQ082PROD with NOTICES 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 the CDFI Fund’s Awards Management Information System (AMIS) on or before 11:59 p.m. ET on May 24, 2018. 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. Applications for CDE certification must be submitted in AMIS. Paper versions of the CDE certification application will not be accepted. 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, it must submit its request for such change to the CDFI Fund, and the request must be received by the CDFI Fund by 11:59 p.m. ET May 24, 2018. A request to change a CDE’s Service Area must be submitted through the CDFI Fund’s Awards Management Information System (AMIS) as a Service Request. Such requests will need to include, at a minimum, the applicable CDE control number, 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 Service Area. VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 2. As a condition of eligibility for this Allocation Round, the Applicant will not be permitted to use the proceeds of Qualified Equity Investments (QEIs) to make Qualified Low-Income Community Investments (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 past 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. 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 section, the CDFI Fund will consider an Affiliate to be any entity that meets the definition of Affiliate as defined in the NMTC allocation application materials, or any entity otherwise identified as an Affiliate by the Applicant in its NMTC allocation application materials. Prior award recipients of any CDFI Fund program are eligible to apply under this NOAA, except as follows: a. 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 submitted reports to the CDFI Fund that demonstrate potential noncompliance with or default under a previous assistance, award or Allocation Agreement; and (ii) the CDFI Fund has yet to make a final determination as to whether the entity is in noncompliance or default of its previous assistance, award or Allocation Agreement, the CDFI Fund will consider the Applicant’s application under this NOAA pending final determination of whether the entity is in noncompliance or default, in the sole determination of the CDFI Fund. Further, if an Affiliate of the Applicant is a prior CDFI Fund PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 award recipient or Allocatee and if such entity: (i) Has submitted reports to the CDFI Fund that demonstrate potential noncompliance with or default under a previous assistance, award or Allocation Agreement; and (ii) the CDFI Fund has yet to make a final determination as to whether the entity is in noncompliance or default of its previous assistance, award or Allocation Agreement, the CDFI Fund will consider the Applicant’s application under this NOAA pending final determination of whether the entity is in noncompliance or default, in the sole determination of the CDFI Fund. Moreover, if an Applicant is a prior Allocatee, and is otherwise eligible as of the application deadline, the Applicant must continue to be compliant with its Allocation Agreement(s) after the application deadline, in order for the CDFI Fund to continue evaluating its application. If an Applicant fails to do such, the CDFI Fund will no longer deem the Applicant eligible. b. 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 in default of a previously executed assistance, allocation, or award agreement; and (ii) the CDFI Fund has provided written notification of such determination to the Applicant; and the default occurs during the time period beginning six months prior to the Application Deadline and ending with the execution of the Allocation Agreement; or (iii) the default notification indicates that the Applicant is not eligible to apply for or receive an allocation under the CY 2018 NMTC Program round. Further, the CDFI Fund will not consider an application submitted by an Applicant for which there is 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 in default of a previously executed assistance, allocation, or award agreement; (ii) the CDFI Fund has provided written notification of such determination to the Affiliate; and (iii) and (ii) the default occurs during the time period beginning six months prior to the Application Deadline and ending with the execution of the Allocation Agreement; or (iii) the default notification indicates that the Affiliate is not eligible to apply for or receive an allocation under the CY 2018 NMTC Program round. E:\FR\FM\11MYN1.SGM 11MYN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices c. Contact the CDFI Fund: Accordingly, Applicants that are prior award recipients and/or Allocatees under any other 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 Certification, Compliance Monitoring, and Evaluation through a Service Request initiated in AMIS. Requests submitted less than thirty 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 or disbursement questions between the hours of 9:00 a.m. and 5:00 p.m. ET, starting the date of publication of this NOAA through June 26, 2018 (two days before the application deadline). The CDFI Fund will not respond to Applicants’ reporting, compliance, CDE certification, or disbursement phone calls or email inquiries that are received after 5:00 p.m. ET on June 26, 2018 until after the funding application deadline of June 28, 2018. 4. 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 Applicant’s application ineligible, if the CDFI Fund determines that the Applicant inaccurately responded to a question and failed to submit a required written explanation, accurately answered a question yet 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 of the Notice of Allocation, 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 will 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. 5. Entities that propose to transfer NMTCs to Subsidiaries: 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 a NMTC allocation must demonstrate, prior to entering into an Allocation Agreement VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 with the CDFI Fund, that: (i) It controls one or more Subsidiaries that are forprofit entities; and (ii) it intends to transfer the full amount of any NMTC allocation it receives to said Subsidiaries. An Applicant wishing to transfer all or a portion of its NMTC allocation to a Subsidiary is not required to create the Subsidiary prior to submitting a NMTC allocation application to the CDFI Fund. However, the Subsidiary entities must be certified as CDEs by the CDFI Fund, and enjoined as parties to the Allocation Agreement at closing or by amendment to the Allocation Agreement after closing. 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 60 days after the non-profit Applicant receives the Notice of Allocation (NOA) from the CDFI Fund, 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 fails to submit a certification application for one or more for-profit Subsidiaries within 60 days of the date of the NOA. 6. 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 Statecontrolled 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 or identified consultants. If the CDFI Fund determines that the applications submitted by different government bodies in the same State are not PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 22117 distinctly dissimilar and/or operated and/or managed by distinctly dissimilar personnel, it will reject all such applications. 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. 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 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 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). 7. 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 E:\FR\FM\11MYN1.SGM 11MYN1 22118 Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices sradovich on DSK3GMQ082PROD with NOTICES 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. 8. Entities that are Bank Enterprise Award Program (BEA Program) award recipients: An insured depository institution investor (and its Affiliates and Subsidiaries) may not receive a NMTC allocation in addition to a BEA Program award for the same investment in a CDE. Likewise, an insured depository institution investor (and its Affiliates and Subsidiaries) may not receive a BEA Program award in addition to a NMTC allocation for the same investment in a CDE. IV. Application and Submission Information A. Address to request application package: Applicants must submit applications electronically under this NOAA, through the CDFI Fund website. Following the publication of this NOAA, the CDFI Fund will make the electronic allocation application available on its website at https:// www.cdfifund.gov. Applications sent by mail, facsimile or other form will not be accepted. Please note the CDFI Fund will only accept the application and attachments (e.g., the Controlling Entity’s representative signature page, investor letters, and organizational charts) in electronic form. B. Application content requirements: Detailed application content requirements are found in the application related to this NOAA. Applicants must submit all materials described in and required by the application by the applicable deadlines. Applicants will not be afforded an opportunity to provide any missing materials or documentation, except, if necessary and at the request of the CDFI Fund. Electronic applications must be submitted solely by using the format made available at the CDFI Fund’s website. Additional information, including instructions relating to the submission of supporting information (e.g., the Controlling Entity’s VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 representative signature page, Assurances and Certifications supporting documents, investor letters, organizational charts), is set forth in further detail in the NMTC Electronic Application Instructions 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. An Applicant may not submit more than one application in response to this NOAA. In addition, as stated in Section III.A.6 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.6 above. Once an application is submitted, an Applicant will not be allowed to change any element of its application. C. Form of application submission: Applicants may only submit applications under this NOAA electronically. Applications sent by facsimile or by 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 NMTC Electronic Application Instruction for this Allocation Rounds. The CDFI Fund recommends use of internet Explorer version 8 or higher on a Microsoft Windows-based computer (Windows Vista or higher), and optimally at least a 56Kbps internet connection in order to meet the electronic application submission requirements. Use of other browsers (e.g., Firefox, Chrome, Safari), other versions of internet Explorer, or other operating systems (e.g., Mac) might result in problems during submission of the application. The CDFI Fund’s electronic application system will only permit the submission of applications in which all required questions and tables are fully completed. Additional information, PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 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 NMTC Electronic Application Instructions for this Allocation Round. D. Application submission dates and times: 1. Application deadlines: a. Electronic applications must be received by 5:00 p.m. ET on June 28, 2018. Electronic applications cannot be transmitted or received after 5:00 p.m. ET on June 28, 2018. 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 5:00 p.m. ET on June 28, 2018. For details, see the instructions provided in the NMTC Electronic Application Instructions 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. E. Intergovernmental Review: Not applicable. F. Funding Restrictions: For allowable uses of investment proceeds related to a NMTC allocation, please see 26 U.S.C. 45D and the final regulations issued by the Internal Revenue Service (26 CFR 1.45D–1, published December 28, 2004 and as amended) and related guidance. Please see Section I, above, for the Programmatic Changes of this NOAA. G. Paperwork Reduction: Under the Paperwork Reduction Act (44 U.S.C. chapter 35), an agency may not conduct or sponsor a collection of information, and an individual is not required to respond to a collection of information, unless it displays a valid OMB control number. Pursuant to the Paperwork Reduction Act, the application has been assigned the following control number: 1559–0016. V. Application Review Information 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 E:\FR\FM\11MYN1.SGM 11MYN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices 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, three 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 relates to making similar kinds of investments as those it proposes to make with the proceeds of QEIs; the Applicant’s prior performance in providing capital or technical assistance to disadvantaged businesses or communities; the 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; and the extent to which Applicants that otherwise have notable relationships with the Qualified Active Low Income Community Businesses (QALICBs) financed will create benefits (beyond those created in the normal course of a NMTC transaction) to Low-Income Communities. Under the Business Strategy criterion, an Applicant will generally score well to the extent that it will deploy debt or investment capital in products or services which are flexible or nontraditional 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 has a track record of successfully deploying loans or equity investments and providing services similar to those it intends to provide with the proceeds VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 of QEIs; (iii) its projected dollar volume of NMTC deployment is supported by its track record of deployment; (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. If the Applicant (or its Affiliates) have notable relationships with QALICBs, the Applicant will generally score well if it quantifies how such relationships will create benefits (i.e. cost savings, lower fees) for QALICBs, unaffiliated end-users such as tenant businesses, or residents of LowIncome 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 (5) additional points to any Applicant that has a record of having successfully provided capital or technical assistance to disadvantaged businesses or communities. Second, the CDFI Fund will give five (5) additional points to any Applicant that intends to satisfy the requirement of IRC § 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 (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 § 45D(b)(1)(B) by investing substantially all of the proceeds from its QEIs in unrelated businesses. The CDFI Fund will factor in an Applicant’s priority points when ranking Applicants during Phase 2 of the review process, as described below. 2. Community Outcomes (25-point maximum): In assessing the potential benefits to Low-Income Communities that may result from the Applicant’s PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 22119 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: (iii) Engage with local communities regarding investments; (iv) the level of involvement of community representatives in the Governing Board and/or Advisory Board in approving investment criteria or decisions; and (v) demonstrate a track record of investing in businesses that spur additional private capital investment in LowIncome Communities. 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 is working in particularly economically distressed or otherwise underserved communities; (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; (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 (LICs); and (g) it is likely to engage in activities that will spur additional private capital investment. C. Phase 2 Evaluation: 1. 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 median of the three reviewers’ 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 fourth reviewer to determine whether the anomalous score should be replaced with the score of the additional fourth reviewer. 2. Late Reports: In the case of an Applicant or any Affiliates that has previously received an award or allocation from the CDFI Fund through any CDFI Fund program, the CDFI Fund will deduct points from the Applicant’s ‘‘Final Rank Score’’ for the Applicant’s E:\FR\FM\11MYN1.SGM 11MYN1 sradovich on DSK3GMQ082PROD with NOTICES 22120 Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices (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 June 22, 2017 to the application deadline in this NOAA (June 28, 2018). 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 allocations in a manner generally consistent with the representations made in the relevant allocation application (including, but not limited to, the proposed product offerings, QALICB type, fees and markets served); (b) issued QEIs and made QLICIs in a timely manner; and (c) substantiated a need for additional 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. The CDFI Fund will award allocations in the 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. 4. Management Capacity: In assessing an Applicant’s management capacity, CDFI Fund will consider, among other things, the current and planned roles, as well as qualifications of the Applicant’s (and Controlling Entity, 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 VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 personnel have experience in: (a) Providing loans, equity investments or financial counseling and other services in Low-Income Communities, particularly those likely to be served by the Applicant with the proceeds of QEIs; (b) asset and risk management; and (c) fulfilling government compliance requirements, particularly tax credit program compliance. An Applicant will also be evaluated favorably to the extent it demonstrates strong financial health and a high likelihood of remaining a going-concern; it clearly explains 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, its most recent Community Reinvestment Act (CRA) rating was ‘‘outstanding.’’ 5. Capitalization Strategy: When assessing an Applicant’s capitalization strategy, 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 tax credit 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 or; (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 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 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. D. Allocations serving NonMetropolitan 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. To this end, the CDFI Fund will ensure that the proportion of Allocatees that are Rural CDEs is, at a minimum, equal to the proportion of Applicants in the highly qualified pool that are Rural CDEs. The CDFI Fund will also endeavor to ensure that 20 percent of the QLICIs to be made using QEI proceeds are invested in NonMetropolitan counties. 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 Allocation will be deployed in such areas. NonMetropolitan counties are counties not contained within a Metropolitan Statistical Area, as such term is defined in OMB Bulletin No. 10–02 (Update of Statistical Area Definitions and Guidance on Their Uses) and applied using 2010 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 E:\FR\FM\11MYN1.SGM 11MYN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices 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 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. 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 NonMetropolitan areas to the total allocation award amount of each Allocatee (less whatever percentage the Allocatee indicated would be retained for nonQLICI activities), and total these figures for all Allocatees. If this aggregate total is greater than or equal to 20 percent of the QLICIs to be made by the Allocatees, then the pool is considered balanced and the CDFI Fund will proceed with the allocation process. However, if the aggregate total is less than 20 percent of the QLICIs to be made by the Allocatees, the CDFI Fund will consider requiring any or all of the Allocatees to direct up to the ‘‘maximum’’ percentage of QLICIs that 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 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. Questions: All outstanding reports or compliance questions should be directed to the Office of Certification, Compliance Monitoring, and Evaluation through the submission of a Service Request in AMIS or by telephone at (202) 653–0423. The CDFI Fund will respond to reporting or compliance questions between the hours of 9:00 VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 a.m. and 5:00 p.m. ET, starting the date of the publication of this NOAA through June 26, 2018. The CDFI Fund will not respond to reporting or compliance phone calls or email inquiries that are received after 5:00 p.m. ET on June 26, 2018 until after the funding application deadline of June 28, 2018. F. 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. The CDFI Fund reserves the right to reject any NMTC allocation application in the case of a prior CDFI Fund Allocatee, if such Applicant has failed to comply with the terms, conditions, and other requirements of its prior or existing Allocation Agreement(s) with the CDFI Fund. The CDFI Fund reserves the right to reject any NMTC allocation application in the case of any Applicant, if an Affiliate of the Applicant has failed to meet the terms, conditions and other requirements of any prior or existing assistance agreement, award agreement or Allocation Agreement with the CDFI Fund. The CDFI Fund reserves the right to reject 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, QALICB type, fees and markets served) set forth in the allocation application(s) related to such prior 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 set forth in the allocation application(s) related to such prior 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 administrative errors or omission of information) PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 22121 comes to the attention of the CDFI Fund that adversely affects an Applicant’s eligibility for an award, adversely affects the CDFI Fund’s evaluation or scoring of an application, adversely affects the CDFI Fund’s prior determinations of CDE certification, or indicates fraud or mismanagement on the part of an Applicant or the Controlling Entity, if such fraud or mismanagement by the Controlling Entity would hinder the Applicant’s ability to perform under the Allocation Agreement. If the CDFI Fund determines that any portion of the application is incorrect in any material respect, the CDFI Fund reserves the right, in its sole discretion, to reject the application. As a part of the substantive review process, the CDFI Fund may permit the Allocation Recommendation Panel member(s) to 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 allocation authority available. 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 Allocation Recommendation Panel or E:\FR\FM\11MYN1.SGM 11MYN1 sradovich on DSK3GMQ082PROD with NOTICES 22122 Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices 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, 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 a insured depository institution will not be awarded an 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 or is Affiliated with an insured depository institution for the following reasons, if at the time of application or any time during the application review process through the closing of the 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. 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 will likely be given the opportunity to receive feedback on their applications. This feedback will be provided in a format and within a timeframe to be determined by the CDFI Fund, based on available resources. The CDFI Fund further reserves the right to change its eligibility and evaluation criteria and procedures, if the CDFI Fund deems it appropriate. If said changes materially affect the CDFI VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 Fund’s award decisions, the CDFI Fund will provide information regarding the changes through the CDFI Fund’s website. There is no right to appeal the CDFI Fund’s 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), as of the date of the NOA 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). 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 submitted reports to the CDFI Fund that demonstrate potential noncompliance with or a default under a previous assistance, award, or Allocation Agreement; and (ii) the CDFI Fund has yet to make a final determination as to whether the entity is in noncompliance with or default under its previous assistance, award, or Allocation Agreement, the CDFI Fund reserves the right, in its sole discretion, to delay entering into an Allocation Agreement and/or to impose limitations on the Allocatee’s ability to issue Qualified Equity Investments to investors, pending final determination of whether 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 submitted reports to the CDFI Fund that demonstrate potential noncompliance/default under a PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 previous assistance, award, or Allocation Agreement; and (ii) the CDFI Fund has yet to make a final determination as to whether the entity is in noncompliance/default under its previous assistance, award, or Allocation Agreement, the CDFI Fund reserves the right, in its sole discretion, to delay entering into an Allocation Agreement and/or to impose limitations on the Allocatee’s ability to issue QEIs to investors, pending final determination of whether 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 or Allocatee in question is unable to satisfactorily resolve the issues of noncompliance, in the sole determination of the CDFI Fund, the CDFI Fund reserves the right, in its sole discretion, to terminate and rescind the award notification made under this NOAA. 3. Determination of noncompliance or Default status: If prior to entering into an Allocation Agreement through this NOAA: (i) 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 in default or noncompliance of a previously executed assistance, allocation, or assistance agreement(s); (ii) the CDFI Fund has provided written notification of such determination to such organization; and (iii) the default occurs during the time period beginning six months prior to the Application Deadline and ending with the execution of the Allocation Agreement; or (iii) the default notification indicates that the Applicant is not eligible to apply for or receive an allocation under the CY 2018 NMTC Program round, 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 Notice of Allocation and the 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 Allocatee or an Affiliate of the Allocatee that is a prior CDFI Fund award recipient under any CDFI Fund program is in default of a previously executed assistance, allocation, or award agreement(s); (ii) the CDFI Fund has provided written notification of such determination to such organization; and (ii) the default occurs during the time period beginning six months prior to the Application E:\FR\FM\11MYN1.SGM 11MYN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices Deadline and ending with the execution of the Allocation Agreement; or (iii) the default notification indicates that the Applicant is not eligible to apply for or receive an allocation under the CY 2018 NMTC Program round, 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 Notice of Allocation and the allocation made under this NOAA. B. Allocation Agreement: Each Applicant that is selected to receive a NMTC allocation (including the Applicant’s 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 Qualified Active Low-Income Businesses, 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 NonMetropolitan counties; (iv) commitments to specific ‘‘innovative activities’’ discussed by the Applicant in its Allocation Application; (v) the time period by which the Applicant may obtain QEIs from investors; (vi) reporting requirements for all Applicants receiving NMTC allocations; and (vii) a requirement to maintain certification as a CDE throughout the term of the Allocation Agreement. If an Applicant has represented in its NMTC allocation application that it intends to invest substantially all of the proceeds from its investors in businesses in which persons unrelated to the Applicant hold a majority equity interest, the Allocation Agreement will contain a covenant whereby said Applicant agrees that it will invest substantially all of said proceeds in businesses in which persons unrelated to the Applicant hold a majority equity interest. In addition to entering into an Allocation Agreement, each Applicant selected to receive a NMTC allocation must furnish to the CDFI Fund an opinion from its legal counsel or a similar certification, the content of which will be further specified in the Allocation Agreement, to include, among other matters, an opinion that an Applicant (and its Subsidiary Allocatees, if any): (i) Is duly formed and in good standing in the jurisdiction VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 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 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 Applicants that are awarded NMTC allocations and/or are recipients of QLICIs, including such audited financial statements and opinions of counsel as the CDFI Fund deems necessary or desirable, in its sole discretion. The CDFI Fund will require the Applicant 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 LowIncome 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. PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 22123 The CDFI Fund reserves the right, in its sole discretion, to modify these reporting requirements if it determines it to be appropriate and necessary; however, such reporting requirements will be modified only after due notice to Allocatees. VII. Agency Contacts The CDFI Fund will provide programmatic and information technology support related to the allocation application between the hours of 9:00 a.m. and 5:00 p.m. ET through June 26, 2018. The CDFI Fund will not respond to phone calls or emails concerning the application that are received after 5:00 p.m. ET on June 26, 2018 until after the allocation application deadline of June 28, 2018. 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 Jian Grant and James Holmes, 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 2018–1, issued January 2, 2018. VIII. Information Sessions In connection with this NOAA, the CDFI Fund may conduct one or more information sessions that will be E:\FR\FM\11MYN1.SGM 11MYN1 22124 Federal Register / Vol. 83, No. 92 / Friday, May 11, 2018 / Notices produced in Washington, DC and 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. Mary A. Donovan, Director, Community Development Financial Institutions Fund. [FR Doc. 2018–10109 Filed 5–10–18; 8:45 am] BILLING CODE 4810–70–P DEPARTMENT OF THE TREASURY Internal Revenue Service Proposed Collection; Comment Request for Form 1099–R Internal Revenue Service (IRS), Treasury. ACTION: Notice and request for comments. AGENCY: The Internal Revenue Service (IRS), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. DATES: Written comments should be received on or before July 10, 2018 to be assured of consideration. ADDRESSES: Direct all written comments to Laurie Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224. FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the form and instructions should be directed to Martha R. Brinson, at (202) 317–5753, or at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at Martha.R.Brinson@irs.gov. SUPPLEMENTARY INFORMATION: Title: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. OMB Number: 1545–0119. Form Number: 1099–R. Abstract: Form 1099–R is used to report distributions from pensions, annuities, profit-sharing or retirement plans, IRAs, and the surrender of insurance contracts. This information is used by IRS to verify that income has been properly reported by the recipient. sradovich on DSK3GMQ082PROD with NOTICES SUMMARY: VerDate Sep<11>2014 19:21 May 10, 2018 Jkt 244001 Current Actions: (1) We have added a box ‘‘to report the date of payment on a reportable life insurance policy sale’’ (2) Instructions were updated for boxes 1 and 5 to reflect reportable policy sales, and (3) A new distribution code ‘‘X’’ for reportable policy sales in the box 7 instructions. Type of Review: Revision of a currently approved collection. Affected Public: Businesses or other for-profit organizations, not for-profit institutions, and Federal, state, local or tribal governments. Estimated Number of Responses: 89,333,000. Estimated Time per Response: 26 mins. Estimated Total Annual Burden Hours: 39,306,520. The following paragraph applies to all of the collections of information covered by this notice: An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Request for Comments: Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. Comments will be of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (b) the accuracy of the agency’s estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Approved: May 2, 2018. Laurie Brimmer, Senior Tax Analyst. [FR Doc. 2018–10024 Filed 5–10–18; 8:45 am] BILLING CODE 4830–01–P PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 DEPARTMENT OF THE TREASURY Internal Revenue Service Proposed Extension of Information Collection Request Submitted for Public Comment; Form 1096, Annual Summary and Transmittal of U.S. Information Returns Internal Revenue Service (IRS), Treasury. ACTION: Notice and request for comments. AGENCY: The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently, the IRS is soliciting comments concerning Form 1096, Annual Summary and Transmittal of U.S. Information Returns. DATES: Written comments should be received on or before July 10, 2018 to be assured of consideration. ADDRESSES: Direct all written comments to Roberto Mora-Figueroa, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW, Washington, DC 20224. Requests for additional information or copies of the regulations should be directed to R. Joseph Durbala, at Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet, at RJoseph.Durbala@irs.gov. SUPPLEMENTARY INFORMATION: Title: Annual Summary and Transmittal of U.S. Information Returns. OMB Number: 1545–0108. Regulation Project Number: Form 1096. Abstract: Form 1096 is used to transmit information returns (Forms 1099, 1098, 5498, and W–2G) to the IRS service centers. Under Internal Revenue Code section 6041 and related regulations, a separate Form 1096 is used for each type of return sent to the service center by the payer. It is used by IRS to summarize, categorize, and process the forms being filed. Current Actions: There is no change to the burden previously approved. Type of Review: Extension of a currently approved collection. Affected Public: Business or other forprofit organizations, individuals or households, not-for-profit institutions, farms, Federal government, and State, local or tribal governments. Estimated Number of Respondents: 5,640,300. Estimated Time per Respondent: 13.8 min. SUMMARY: E:\FR\FM\11MYN1.SGM 11MYN1

Agencies

[Federal Register Volume 83, Number 92 (Friday, May 11, 2018)]
[Notices]
[Pages 22115-22124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10109]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Notice of Allocation Availability (NOAA) Inviting Applications 
for the Calendar Year (CY) 2018 Allocation Round of the New Markets Tax 
Credit (NMTC) Program

FUNDING OPPORTUNITY TITLE: Notice of Allocation Availability (NOAA) 
Inviting Applications for the Calendar Year (CY) 2018 Allocation Round 
of the New Markets Tax Credit (NMTC) Program.

ANNOUNCEMENT TYPE: Announcement of allocation availability.

DATES: Electronic applications must be received by 5:00 p.m. ET on June 
28, 2018. Applications sent by mail, facsimile, or other form will not 
be accepted. Please note the Community Development Financial 
Institutions Fund (CDFI Fund) will only accept applications and 
attachments (e.g., the Controlling Entity's representative signature 
page, investor letters, and organizational charts) in electronic form 
(see Section IV.C of this NOAA for more details). Applications must 
meet all eligibility and other requirements and deadlines, as 
applicable, set forth in this NOAA. Any Applicant that is not yet 
certified as a Community Development Entity (CDE) must submit an 
application for CDE certification through the CDFI Fund's Awards 
Management Information System (AMIS) on or before 5:00 p.m. ET on May 
24, 2018 (see Section III.A.1 of this NOAA for more details on CDE 
certification).

EXECUTIVE SUMMARY: This NOAA is issued in connection with the CY 2018 
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) 
and amended by section 221 of the American Jobs Creation Act of 2004 
(Pub. L. 108-357), section 101 of the Gulf Opportunity Zone Act of 2005 
(Pub. L. 108-357), Division A, section 102 of the Tax Relief and Health 
Care Act of 2006 (Pub. L. 109-432), section 733 of the Tax Relief, 
Unemployment Insurance Reauthorization and Job Creation Act of 2010 
(Pub. L. 111-312), section 305 of the American Taxpayer Relief Act of 
2012 (Pub. L. 112-240), section 115 of the Tax Increase Prevention Act 
of 2014 (Pub. L. 113-295), and section 141 of the Protecting Americans 
from Tax Hikes Act (PATH) of 2015. Through the NMTC Program, the CDFI 
Fund provides authority to CDEs to offer an incentive to investors in 
the form of tax credits over seven years, which is expected to 
stimulate the provision of private investment capital that, in turn, 
will facilitate economic and community development in Low-Income 
Communities. Through this NOAA, the CDFI Fund announces the 
availability of $3.5 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 2017 allocation round:
    1. Prior QEI Issuance Requirements: Qualified Equity Investment 
(QEI) issuance threshold with respect to its prior-year allocation. 
These thresholds and deadlines have been revised in comparison to the 
CY 2017 NOAA. In this Round, the CDFI Fund is not requiring a minimum 
threshold of Qualified Equity Investments (QEIs) be issued as a 
condition of eligibility. During Phase 2, the CDFI Fund will consider 
prior Round Allocatees' QEI issuance recorded in the CDFI Fund's online 
systems as of September 24, 2018. See Section V.C of this NOAA for 
additional details on Phase 2 reviews.
    B. Program guidance and regulations: This NOAA describes 
application and allocation requirements for this Allocation Round of 
the NMTC Program and should be read in conjunction with: (i) Guidance 
published by the CDFI Fund on how an entity may apply to become 
certified as a CDE (66 Federal Register 65806, December 20, 2001); (ii) 
the final regulations issued by the Internal Revenue Service (the IRS) 
(26 CFR 1.45D-1, published on December 28, 2004), as amended and 
related guidance, notices and other publications; and (iii) 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, IRC Sec.  45D or the IRS regulations. In the event of any 
inconsistency between this NOAA, the allocation application, and 
guidance issued by the CDFI Fund thereto, IRC Sec.  45D or the IRS 
regulations, the provisions of IRC Sec.  45D and the IRS regulations 
shall govern.

II. Allocation Information

    A. Allocation amounts: Pursuant to the PATH Act of 2015, the CDFI 
Fund expects that it may allocate to CDEs the authority to issue to 
their investors the aggregate amount of $3.5 billion in equity as to 
which NMTCs may be claimed, as permitted under IRC Sec.  45D(f)(1)(D). 
Pursuant to this NOAA, the CDFI Fund anticipates that it will 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 Fund deem it appropriate. In order to receive an 
allocation in excess of the $100 million cap, an Applicant, at a 
minimum, must demonstrate that: (i) No part of its strategy can be 
successfully implemented without an allocation in excess of the 
applicable cap; and/or (ii) its strategy will produce extraordinary 
community outcomes. 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

[[Page 22116]]

allocations of tax credit investment authority.
    C. 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 of this NOAA.

III. Eligibility

    A. Eligible Applicants: IRC Sec.  45D specifies certain eligibility 
requirements that each Applicant must meet to be eligible to apply for 
an allocation of NMTCs. The following sets forth additional detail and 
certain additional dates that relate to the submission of applications 
under this NOAA for the 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 the CDFI Fund's Awards 
Management Information System (AMIS) on or before 11:59 p.m. ET on May 
24, 2018. 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. Applications 
for CDE certification must be submitted in AMIS. Paper versions of the 
CDE certification application will not be accepted. 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, it must submit its request for 
such change to the CDFI Fund, and the request must be received by the 
CDFI Fund by 11:59 p.m. ET May 24, 2018. A request to change a CDE's 
Service Area must be submitted through the CDFI Fund's Awards 
Management Information System (AMIS) as a Service Request. Such 
requests will need to include, at a minimum, the applicable CDE control 
number, 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 
Service Area.
    2. As a condition of eligibility for this Allocation Round, the 
Applicant will not be permitted to use the proceeds of Qualified Equity 
Investments (QEIs) to make Qualified Low-Income Community Investments 
(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 past 
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. 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 section, the CDFI Fund will consider an Affiliate to 
be any entity that meets the definition of Affiliate as defined in the 
NMTC allocation application materials, or any entity otherwise 
identified as an Affiliate by the Applicant in its NMTC allocation 
application materials. Prior award recipients of any CDFI Fund program 
are eligible to apply under this NOAA, except as follows:
    a. 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 submitted reports to the CDFI Fund that 
demonstrate potential noncompliance with or default under a previous 
assistance, award or Allocation Agreement; and (ii) the CDFI Fund has 
yet to make a final determination as to whether the entity is in 
noncompliance or default of its previous assistance, award or 
Allocation Agreement, the CDFI Fund will consider the Applicant's 
application under this NOAA pending final determination of whether the 
entity is in noncompliance or default, in the sole determination of the 
CDFI Fund. Further, if an Affiliate of the Applicant is a prior CDFI 
Fund award recipient or Allocatee and if such entity: (i) Has submitted 
reports to the CDFI Fund that demonstrate potential noncompliance with 
or default under a previous assistance, award or Allocation Agreement; 
and (ii) the CDFI Fund has yet to make a final determination as to 
whether the entity is in noncompliance or default of its previous 
assistance, award or Allocation Agreement, the CDFI Fund will consider 
the Applicant's application under this NOAA pending final determination 
of whether the entity is in noncompliance or default, in the sole 
determination of the CDFI Fund.
    Moreover, if an Applicant is a prior Allocatee, and is otherwise 
eligible as of the application deadline, the Applicant must continue to 
be compliant with its Allocation Agreement(s) after the application 
deadline, in order for the CDFI Fund to continue evaluating its 
application. If an Applicant fails to do such, the CDFI Fund will no 
longer deem the Applicant eligible.
    b. 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 in default of a previously executed assistance, 
allocation, or award agreement; and (ii) the CDFI Fund has provided 
written notification of such determination to the Applicant; and the 
default occurs during the time period beginning six months prior to the 
Application Deadline and ending with the execution of the Allocation 
Agreement; or (iii) the default notification indicates that the 
Applicant is not eligible to apply for or receive an allocation under 
the CY 2018 NMTC Program round. Further, the CDFI Fund will not 
consider an application submitted by an Applicant for which there is 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 in 
default of a previously executed assistance, allocation, or award 
agreement; (ii) the CDFI Fund has provided written notification of such 
determination to the Affiliate; and (iii) and (ii) the default occurs 
during the time period beginning six months prior to the Application 
Deadline and ending with the execution of the Allocation Agreement; or 
(iii) the default notification indicates that the Affiliate is not 
eligible to apply for or receive an allocation under the CY 2018 NMTC 
Program round.

[[Page 22117]]

    c. Contact the CDFI Fund: Accordingly, Applicants that are prior 
award recipients and/or Allocatees under any other 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 Certification, 
Compliance Monitoring, and Evaluation through a Service Request 
initiated in AMIS. Requests submitted less than thirty 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 or 
disbursement questions between the hours of 9:00 a.m. and 5:00 p.m. ET, 
starting the date of publication of this NOAA through June 26, 2018 
(two days before the application deadline). The CDFI Fund will not 
respond to Applicants' reporting, compliance, CDE certification, or 
disbursement phone calls or email inquiries that are received after 
5:00 p.m. ET on June 26, 2018 until after the funding application 
deadline of June 28, 2018.
    4. 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 Applicant's application ineligible, if the 
CDFI Fund determines that the Applicant inaccurately responded to a 
question and failed to submit a required written explanation, 
accurately answered a question yet 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 of 
the Notice of Allocation, 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 will 
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.
    5. Entities that propose to transfer NMTCs to Subsidiaries: 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 a NMTC 
allocation must demonstrate, prior to entering into an Allocation 
Agreement with the CDFI Fund, that: (i) It controls one or more 
Subsidiaries that are for-profit entities; and (ii) it intends to 
transfer the full amount of any NMTC allocation it receives to said 
Subsidiaries.
    An Applicant wishing to transfer all or a portion of its NMTC 
allocation to a Subsidiary is not required to create the Subsidiary 
prior to submitting a NMTC allocation application to the CDFI Fund. 
However, the Subsidiary entities must be certified as CDEs by the CDFI 
Fund, and enjoined as parties to the Allocation Agreement at closing or 
by amendment to the Allocation Agreement after closing.
    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 60 days after the non-profit Applicant 
receives the Notice of Allocation (NOA) from the CDFI Fund, 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 fails to submit a 
certification application for one or more for-profit Subsidiaries 
within 60 days of the date of the NOA.
    6. 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 or identified consultants. 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. 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.
    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 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 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).
    7. 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

[[Page 22118]]

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.
    8. Entities that are Bank Enterprise Award Program (BEA Program) 
award recipients: An insured depository institution investor (and its 
Affiliates and Subsidiaries) may not receive a NMTC allocation in 
addition to a BEA Program award for the same investment in a CDE. 
Likewise, an insured depository institution investor (and its 
Affiliates and Subsidiaries) may not receive a BEA Program award in 
addition to a NMTC allocation for the same investment in a CDE.

IV. Application and Submission Information

    A. Address to request application package: Applicants must submit 
applications electronically under this NOAA, through the CDFI Fund 
website. Following the publication of this NOAA, the CDFI Fund will 
make the electronic allocation application available on its website at 
https://www.cdfifund.gov. Applications sent by mail, facsimile or other 
form will not be accepted. Please note the CDFI Fund will only accept 
the application and attachments (e.g., the Controlling Entity's 
representative signature page, investor letters, and organizational 
charts) in electronic form.
    B. Application content requirements: Detailed application content 
requirements are found in the application related to this NOAA. 
Applicants must submit all materials described in and required by the 
application by the applicable deadlines. Applicants will not be 
afforded an opportunity to provide any missing materials or 
documentation, except, if necessary and at the request of the CDFI 
Fund. Electronic applications must be submitted solely by using the 
format made available at the CDFI Fund's website. 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 NMTC Electronic Application Instructions 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.
    An Applicant may not submit more than one application in response 
to this NOAA. In addition, as stated in Section III.A.6 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.6 
above. Once an application is submitted, an Applicant will not be 
allowed to change any element of its application.
    C. Form of application submission: Applicants may only submit 
applications under this NOAA electronically. Applications sent by 
facsimile or by 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 NMTC Electronic Application Instruction 
for this Allocation Rounds. The CDFI Fund recommends use of internet 
Explorer version 8 or higher on a Microsoft Windows-based computer 
(Windows Vista or higher), and optimally at least a 56Kbps internet 
connection in order to meet the electronic application submission 
requirements. Use of other browsers (e.g., Firefox, Chrome, Safari), 
other versions of internet Explorer, or other operating systems (e.g., 
Mac) might result in problems during submission of the application. The 
CDFI Fund's electronic application system will only permit the 
submission of applications in which all required questions and tables 
are fully completed. Additional information, including instructions 
relating to the submission of supporting information (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 NMTC 
Electronic Application Instructions for this Allocation Round.
    D. Application submission dates and times:
    1. Application deadlines:
    a. Electronic applications must be received by 5:00 p.m. ET on June 
28, 2018. Electronic applications cannot be transmitted or received 
after 5:00 p.m. ET on June 28, 2018. 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 5:00 p.m. ET on June 28, 2018. For details, see 
the instructions provided in the NMTC Electronic Application 
Instructions 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.
    E. Intergovernmental Review: Not applicable.
    F. Funding Restrictions: For allowable uses of investment proceeds 
related to a NMTC allocation, please see 26 U.S.C. 45D and the final 
regulations issued by the Internal Revenue Service (26 CFR 1.45D-1, 
published December 28, 2004 and as amended) and related guidance. 
Please see Section I, above, for the Programmatic Changes of this NOAA.
    G. Paperwork Reduction: Under the Paperwork Reduction Act (44 
U.S.C. chapter 35), an agency may not conduct or sponsor a collection 
of information, and an individual is not required to respond to a 
collection of information, unless it displays a valid OMB control 
number. Pursuant to the Paperwork Reduction Act, the application has 
been assigned the following control number: 1559-0016.

V. Application Review Information

    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

[[Page 22119]]

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, three 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 relates to making similar kinds of 
investments as those it proposes to make with the proceeds of QEIs; the 
Applicant's prior performance in providing capital or technical 
assistance to disadvantaged businesses or communities; the 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; 
and the extent to which Applicants that otherwise have notable 
relationships with the Qualified Active Low Income Community Businesses 
(QALICBs) financed will create benefits (beyond those created in the 
normal course of a NMTC transaction) to Low-Income Communities.
    Under the Business Strategy criterion, an Applicant will generally 
score well to the extent that it will deploy debt or investment capital 
in products or services which 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 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; (iii) its projected dollar volume of 
NMTC deployment is supported by its track record of deployment; (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. If the Applicant (or its Affiliates) have 
notable relationships with QALICBs, the Applicant will generally score 
well if it quantifies how such relationships will create benefits (i.e. 
cost savings, lower fees) for QALICBs, unaffiliated end-users such as 
tenant businesses, or residents of Low-Income Communities.
    b. Priority Points: In addition, as provided by IRC Sec.  
45D(f)(2), the CDFI Fund will ascribe additional points to entities 
that meet one or both of the statutory priorities. First, the CDFI Fund 
will give up to five (5) additional points to any Applicant that has a 
record of having successfully provided capital or technical assistance 
to disadvantaged businesses or communities. Second, the CDFI Fund will 
give five (5) additional points to any Applicant that intends to 
satisfy the requirement of IRC Sec.  45D(b)(1)(B) by making QLICIs in 
one or more businesses in which persons unrelated (within the meaning 
of IRC Sec.  267(b) or IRC Sec.  707(b)(1)) to an Applicant (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 (10) additional points. A record of having successfully provided 
capital or technical assistance to disadvantaged businesses or 
communities may be demonstrated either by the past actions of an 
Applicant itself or by its Controlling Entity (e.g., where a new CDE is 
established by a nonprofit corporation with a history of providing 
assistance to disadvantaged communities). An Applicant that receives 
additional points for intending to make investments in unrelated 
businesses and is awarded a NMTC allocation must meet the requirements 
of IRC Sec.  45D(b)(1)(B) by investing substantially all of the 
proceeds from its QEIs in unrelated businesses. The CDFI Fund will 
factor in an Applicant's priority points when ranking Applicants during 
Phase 2 of the review process, as described below.
    2. Community 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: (iii) Engage with local communities regarding investments; 
(iv) the level of involvement of community representatives in the 
Governing Board and/or Advisory Board in approving investment criteria 
or decisions; and (v) demonstrate a track record of investing in 
businesses that spur additional private capital investment in Low-
Income Communities.
    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 is working in particularly economically distressed or otherwise 
underserved communities; (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; (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 (LICs); and (g) it is likely to engage in activities 
that will spur additional private capital investment.
    C. Phase 2 Evaluation:
    1. 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 median of the three reviewers' 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 
fourth reviewer to determine whether the anomalous score should be 
replaced with the score of the additional fourth reviewer.
    2. Late Reports: In the case of an Applicant or any Affiliates that 
has previously received an award or allocation from the CDFI Fund 
through any CDFI Fund program, the CDFI Fund will deduct points from 
the Applicant's ``Final Rank Score'' for the Applicant's

[[Page 22120]]

(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 June 22, 2017 to 
the application deadline in this NOAA (June 28, 2018).
    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 allocations in a 
manner generally consistent with the representations made in the 
relevant allocation application (including, but not limited to, the 
proposed product offerings, QALICB type, fees and markets served); (b) 
issued QEIs and made QLICIs in a timely manner; and (c) substantiated a 
need for additional 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.
    The CDFI Fund will award allocations in the 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.
    4. Management Capacity: In assessing an Applicant's management 
capacity, CDFI Fund will consider, among other things, the current and 
planned roles, as well as qualifications of the Applicant's (and 
Controlling Entity, 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) Providing loans, equity investments 
or financial counseling and other services in Low-Income Communities, 
particularly those likely to be served by the Applicant with the 
proceeds of QEIs; (b) asset and risk management; and (c) fulfilling 
government compliance requirements, particularly tax credit program 
compliance. An Applicant will also be evaluated favorably to the extent 
it demonstrates strong financial health and a high likelihood of 
remaining a going-concern; it clearly explains 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, its most recent Community 
Reinvestment Act (CRA) rating was ``outstanding.''
    5. Capitalization Strategy: When assessing an Applicant's 
capitalization strategy, 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 tax credit 
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 Sec.  
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 or; (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 Sec.  45D(b)(1)(B) and 
the IRS regulations. In the case of an Applicant proposing to raise 
investor funds from organizations that also will identify or originate 
transactions for the Applicant or from Affiliated entities, said 
Applicant will 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.
    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. To this end, the CDFI Fund will ensure that the proportion of 
Allocatees that are Rural CDEs is, at a minimum, equal to the 
proportion of Applicants in the highly qualified pool that are Rural 
CDEs. The CDFI Fund will also endeavor to ensure that 20 percent of the 
QLICIs to be made using QEI proceeds are invested in Non-Metropolitan 
counties. A Rural CDE is one that has 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 Allocation will be deployed in such areas. 
Non-Metropolitan counties are counties not contained within a 
Metropolitan Statistical Area, as such term is defined in OMB Bulletin 
No. 10-02 (Update of Statistical Area Definitions and Guidance on Their 
Uses) and applied using 2010 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

[[Page 22121]]

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 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.
    The CDFI Fund will then determine whether the pool of Allocatees 
will, in the aggregate, invest at least 20 percent of their QLICIs (as 
measured by dollar amount) in Non-Metropolitan counties. The CDFI Fund 
will first apply the ``minimum'' percentage of QLICIs that Allocatees 
indicated in their applications would be targeted to Non-Metropolitan 
areas to the total allocation award amount of each Allocatee (less 
whatever percentage the Allocatee indicated would be retained for non-
QLICI activities), and total these figures for all Allocatees. If this 
aggregate total is greater than or equal to 20 percent of the QLICIs to 
be made by the Allocatees, then the pool is considered balanced and the 
CDFI Fund will proceed with the allocation process. However, if the 
aggregate total is less than 20 percent of the QLICIs to be made by the 
Allocatees, the CDFI Fund will consider requiring any or all of the 
Allocatees to direct up to the ``maximum'' percentage of QLICIs that 
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 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. Questions: All outstanding reports or compliance questions 
should be directed to the Office of Certification, Compliance 
Monitoring, and Evaluation through the submission of a Service Request 
in AMIS or by telephone at (202) 653-0423. The CDFI Fund will respond 
to reporting or compliance questions between the hours of 9:00 a.m. and 
5:00 p.m. ET, starting the date of the publication of this NOAA through 
June 26, 2018. The CDFI Fund will not respond to reporting or 
compliance phone calls or email inquiries that are received after 5:00 
p.m. ET on June 26, 2018 until after the funding application deadline 
of June 28, 2018.
    F. 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. The CDFI Fund reserves the 
right to reject any NMTC allocation application in the case of a prior 
CDFI Fund Allocatee, if such Applicant has failed to comply with the 
terms, conditions, and other requirements of its prior or existing 
Allocation Agreement(s) with the CDFI Fund. The CDFI Fund reserves the 
right to reject any NMTC allocation application in the case of any 
Applicant, if an Affiliate of the Applicant has failed to meet the 
terms, conditions and other requirements of any prior or existing 
assistance agreement, award agreement or Allocation Agreement with the 
CDFI Fund.
    The CDFI Fund reserves the right to reject 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, QALICB type, fees and markets served) set forth in the 
allocation application(s) related to such prior 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 Sec.  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 set forth in the allocation application(s) related to 
such prior 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 Sec.  45D.
    The CDFI Fund reserves the right to reject an NMTC allocation 
application if information (including administrative errors 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 or the Controlling 
Entity, if such fraud or mismanagement by the Controlling Entity would 
hinder the Applicant's ability to perform under the Allocation 
Agreement. If the CDFI Fund determines that any portion of the 
application is incorrect in any material respect, the CDFI Fund 
reserves the right, in its sole discretion, to reject the application.
    As a part of the substantive review process, the CDFI Fund may 
permit the Allocation Recommendation Panel member(s) to 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 
Sec.  45D, the reviewers' scores and the amount of allocation authority 
available. 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 
Allocation Recommendation Panel or

[[Page 22122]]

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, 
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 a insured depository 
institution will not be awarded an 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 or is Affiliated with an insured depository 
institution for the following reasons, if at the time of application or 
any time during the application review process through the closing of 
the 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.
    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 will likely be given the opportunity to receive 
feedback on their applications. This feedback will be provided in a 
format and within a timeframe to be determined by the CDFI Fund, based 
on available resources.
    The CDFI Fund further reserves the right to change its eligibility 
and evaluation criteria and procedures, if the CDFI Fund deems it 
appropriate. If said changes materially affect the CDFI Fund's award 
decisions, the CDFI Fund will provide information regarding the changes 
through the CDFI Fund's website.
    There is no right to appeal the CDFI Fund's 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), as of the date of the NOA 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). 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 submitted reports to the CDFI Fund that 
demonstrate potential noncompliance with or a default under a previous 
assistance, award, or Allocation Agreement; and (ii) the CDFI Fund has 
yet to make a final determination as to whether the entity is in 
noncompliance with or default under its previous assistance, award, or 
Allocation Agreement, the CDFI Fund reserves the right, in its sole 
discretion, to delay entering into an Allocation Agreement and/or to 
impose limitations on the Allocatee's ability to issue Qualified Equity 
Investments to investors, pending final determination of whether 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 submitted reports to the CDFI 
Fund that demonstrate potential noncompliance/default under a previous 
assistance, award, or Allocation Agreement; and (ii) the CDFI Fund has 
yet to make a final determination as to whether the entity is in 
noncompliance/default under its previous assistance, award, or 
Allocation Agreement, the CDFI Fund reserves the right, in its sole 
discretion, to delay entering into an Allocation Agreement and/or to 
impose limitations on the Allocatee's ability to issue QEIs to 
investors, pending final determination of whether 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 or Allocatee in question is unable to satisfactorily resolve 
the issues of noncompliance, in the sole determination of the CDFI 
Fund, the CDFI Fund reserves the right, in its sole discretion, to 
terminate and rescind the award notification made under this NOAA.
    3. Determination of noncompliance or Default status: If prior to 
entering into an Allocation Agreement through this NOAA: (i) 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 
in default or noncompliance of a previously executed assistance, 
allocation, or assistance agreement(s); (ii) the CDFI Fund has provided 
written notification of such determination to such organization; and 
(iii) the default occurs during the time period beginning six months 
prior to the Application Deadline and ending with the execution of the 
Allocation Agreement; or (iii) the default notification indicates that 
the Applicant is not eligible to apply for or receive an allocation 
under the CY 2018 NMTC Program round, 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 Notice of Allocation and 
the 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 Allocatee or an Affiliate of the 
Allocatee that is a prior CDFI Fund award recipient under any CDFI Fund 
program is in default of a previously executed assistance, allocation, 
or award agreement(s); (ii) the CDFI Fund has provided written 
notification of such determination to such organization; and (ii) the 
default occurs during the time period beginning six months prior to the 
Application

[[Page 22123]]

Deadline and ending with the execution of the Allocation Agreement; or 
(iii) the default notification indicates that the Applicant is not 
eligible to apply for or receive an allocation under the CY 2018 NMTC 
Program round, 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 Notice of Allocation and the 
allocation made under this NOAA.
    B. Allocation Agreement: Each Applicant that is selected to receive 
a NMTC allocation (including the Applicant's 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 Qualified Active Low-Income 
Businesses, 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 
activities'' discussed by the Applicant in its Allocation Application; 
(v) the time period by which the Applicant may obtain QEIs from 
investors; (vi) reporting requirements for all Applicants receiving 
NMTC allocations; and (vii) a requirement to maintain certification as 
a CDE throughout the term of the Allocation Agreement. If an Applicant 
has represented in its NMTC allocation application that it intends to 
invest substantially all of the proceeds from its investors in 
businesses in which persons unrelated to the Applicant hold a majority 
equity interest, the Allocation Agreement will contain a covenant 
whereby said Applicant agrees that it will invest substantially all of 
said proceeds in businesses in which persons unrelated to the Applicant 
hold a majority equity interest.
    In addition to entering into an Allocation Agreement, each 
Applicant selected to receive a NMTC allocation must furnish to the 
CDFI Fund an opinion from its legal counsel or a similar certification, 
the content of which will be further specified in the Allocation 
Agreement, to include, among other matters, an opinion that an 
Applicant (and its Subsidiary 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 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 Applicants that are awarded NMTC allocations 
and/or are recipients of QLICIs, including such audited financial 
statements and opinions of counsel as the CDFI Fund deems necessary or 
desirable, in its sole discretion. The CDFI Fund will require the 
Applicant 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 Sec.  6103 so 
that the IRS may determine, among other things, whether the Allocatee 
has used substantially all of the proceeds of each QEI raised through 
its NMTC allocation to make QLICIs. The Allocation Agreement shall 
further describe the Allocatee's reporting requirements.
    The CDFI Fund reserves the right, in its sole discretion, to modify 
these reporting requirements if it determines it to be appropriate and 
necessary; however, such reporting requirements will be modified only 
after due notice to Allocatees.

VII. Agency Contacts

    The CDFI Fund will provide programmatic and information technology 
support related to the allocation application between the hours of 9:00 
a.m. and 5:00 p.m. ET through June 26, 2018. The CDFI Fund will not 
respond to phone calls or emails concerning the application that are 
received after 5:00 p.m. ET on June 26, 2018 until after the allocation 
application deadline of June 28, 2018. 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 Jian Grant and James Holmes, 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 2018-1, issued January 2, 2018.

VIII. Information Sessions

    In connection with this NOAA, the CDFI Fund may conduct one or more 
information sessions that will be

[[Page 22124]]

produced in Washington, DC and 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.

Mary A. Donovan,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2018-10109 Filed 5-10-18; 8:45 am]
 BILLING CODE 4810-70-P