Funding Opportunity Title: Notice of Allocation Availability (NOAA) Inviting Applications for the Calendar Year (CY) 2020 Allocation Round of the New Markets Tax Credit (NMTC) Program, 59853-59862 [2020-20931]

Download as PDF Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices Marty Posey Anthony Vasquez Mr. Vasquez, 27, holds a class C license in Texas. Mr. Posey, 47, holds an operator license in Indiana. Daniel Zeolla Mr. Zeolla, 33, holds a class CM license in Pennsylvania. David Sanders Mr. Sanders, 42, holds a class D license in Illinois. Muhammad Shafi Mr. Shafi, 36, holds a class D license in Illinois. Nolen Soler Mr. Soler, 43, holds a class F license in Nebraska. Donald Taylor Mr. Taylor, 58, holds a class C license in North Carolina, IV. Request for Comments In accordance with 49 U.S.C. 31136(e) and 31315(b), FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. We will consider all comments received before the close of business on the closing date indicated under the DATES section of the notice. 59853 DEPARTMENT OF THE TREASURY Community Development Financial Institutions Fund Funding Opportunity Title: Notice of Allocation Availability (NOAA) Inviting Applications for the Calendar Year (CY) 2020 Allocation Round of the New Markets Tax Credit (NMTC) Program Announcement Type: Announcement of NMTC Allocation availability. Dates: Larry W. Minor, Associate Administrator for Policy. [FR Doc. 2020–20961 Filed 9–22–20; 8:45 am] BILLING CODE 4910–EX–P khammond on DSKJM1Z7X2PROD with NOTICES TABLE 1—CY 2020 ALLOCATION ROUND NMTC PROGRAM CRITICAL DEADLINES FOR APPLICANTS Description Deadline/date Time (eastern time—ET) Submission method Community Development Entity (CDE) Certification Application. Request to modify CDE certification service area. Subsidiary CDE Certification Application for meeting Qualified Equity Investment (QEI) issuance thresholds. CY 2020 Application Registration ................. Last date to contact CDFI Fund staff ........... CY 2020 Allocation Application (including required Attachments). Amendment request to add Subsidiary CDEs to Allocation Agreements for meeting QEI issuance thresholds. QEI Issuance and making Qualified Low Income Community Investments (QLICIs) by:. Reporting QEIs and QLICIs closed as of January 15, 2021. October 6, 2020 ............. 11:59 p.m. ET ................ October 6, 2020 ............. 11:59 p.m. ET ................ Electronically via the Awards Management Information System (AMIS). Electronically via AMIS. October 6, 2020 ............. 11:59 p.m. ET ................ Electronically via AMIS. October 9, 2020 ............. November 12, 2020 ....... November 16, 2020 ....... 5:00 p.m. ET .................. 5:00 p.m. ET .................. 5:00 p.m. ET .................. Electronically via AMIS. Electronically via AMIS. Electronically via AMIS. December 4, 2020 ......... 11:59 p.m. ET ................ Electronically via AMIS. January 15, 2021 ........... 11:59 p.m. ET ................ Not Applicable. January 29, 2021 ........... 11:59 p.m. ET ................ Electronically via AMIS. Executive Summary: This NOAA is issued in connection with the CY 2020 allocation round (Allocation Round) of the New Markets Tax Credit Program (NMTC Program), as authorized by Title I, subtitle C, section 121 of the Community Renewal Tax Relief Act of 2000 (Pub. L. 106–554) as amended. (26 U.S.C. 45D). Through the NMTC Program, the Community Development Financial Institutions Fund (CDFI Fund) provides authority to certified CDEs to offer an incentive to investors in the form of tax credits over seven years, which is expected to stimulate the provision of private investment capital that, in turn, will facilitate economic and community development in LowIncome Communities. Through this NOAA, the CDFI Fund announces the availability of $5 billion of NMTC Allocation authority in this Allocation VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 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 2019 allocation round: 1. Prior QEI Issuance Requirements: Prior-year NMTC Allocatees will be subject to minimum thresholds for QEI issuance and closing of QLICIs with respect to their prior-year NMTC Allocations. These thresholds and deadlines have been revised in comparison to the CY 2019 NOAA. See Section III.3 of this NOAA for additional details. PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 2. NMTC Application Registration (Application Registration): CY 2020 Allocation Round Applicants are first required to complete and save the Application Registration section of the NMTC Allocation Application in AMIS by the Application Registration deadline in order to be able to submit the remaining sections of CY 2020 Allocation Application by the Application deadline. Applicants that do not complete and save the Application Registration by the Application Registration deadline, will not be able to subsequently submit a CY 2020 Allocation Application in AMIS. II. Allocation Information A. Allocation amounts: Pursuant to the Taxpayer Certainty and Disaster Tax Relief Act of 2019, the CDFI Fund expects that it may allocate to CDEs the E:\FR\FM\23SEN1.SGM 23SEN1 khammond on DSKJM1Z7X2PROD with NOTICES 59854 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices authority to issue to their investors the aggregate amount of $5 billion in equity as to which NMTCs may be claimed, as permitted under IRC § 45D(f)(1)(D). Pursuant to this NOAA, the CDFI Fund anticipates that it may issue up to $100 million in tax credit investment authority per Allocatee. The CDFI Fund, in its sole discretion, reserves the right to allocate amounts in excess of or less than the anticipated maximum allocation amount should the CDFI Fund deem it appropriate. The CDFI Fund reserves the right to allocate NMTC authority to any, all, or none of the entities that submit applications in response to this NOAA, and in any amounts it deems appropriate. B. Type of award: NMTC Program awards are made in the form of allocations of tax credit investment authority. C. Program guidance and regulations: This NOAA describes application and NMTC Allocation requirements for this Allocation Round of the NMTC Program and should be read in conjunction with: (i) The final NMTC Program Income Tax Regulations issued by the Internal Revenue Service (IRS) (26 CFR 1.45D– 1, published on December 28, 2004), as amended and related guidance, notices and other publications; and (ii) the application and related materials for this Allocation Round. All such materials may be found on the CDFI Fund’s website at https:// www.cdfifund.gov. The CDFI Fund requires Applicants to review these documents. Capitalized terms used, but not defined, in this NOAA have the respective meanings assigned to them in the NMTC Program Allocation Application, Internal Revenue Code (IRC) § 45D or the IRS NMTC regulations. In the event of any inconsistency between this NOAA, the Allocation Application, and guidance issued by the CDFI Fund thereto, IRC § 45D or the IRS NMTC Regulations, the provisions of IRC § 45D and the IRS NMTC Regulations shall govern. D. Allocation Agreement: Each Allocatee must sign an Allocation Agreement, which must be countersigned by the CDFI Fund, before the NMTC Allocation is effective. The Allocation Agreement contains the terms and conditions of the NMTC Allocation. For further information, see Section VI of this NOAA. E. Statutory and national policy requirements: The CDFI Fund will manage and administer the NMTC Program in a manner so as to ensure that NMTC Allocations associated programs are implemented in full accordance with the U.S. Constitution, Federal Law, statutory, and public policy VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 requirements: Including, but not limited to, those protecting free speech; religious liberty; public welfare; the environment; and prohibiting discrimination. III. Eligibility A. Eligible Applicants: IRC § 45D specifies certain eligibility requirements that each Applicant must meet to be eligible to apply for an allocation of NMTCs. The following sets forth additional detail and certain additional dates that relate to the submission of applications under this NOAA for the available NMTC Allocation authority. 1. CDE certification: For purposes of this NOAA, the CDFI Fund will not consider an application for an allocation of NMTCs unless: (a) The Applicant is certified as a CDE at the time the CDFI Fund receives its NMTC Program Allocation Application; or (b) the Applicant submits an application for certification as a CDE through the AMIS by the deadline in Table 1. Applicants for CDE certification may obtain information regarding CDE certification and the CDE Certification Application process in AMIS on the CDFI Fund’s website at https://www.cdfifund.gov/ programs-training/certification/cde/ Pages/default.aspx. The CDFI Fund will not provide NMTC Allocation authority to Applicants that are not certified as CDEs or to entities that are certified as Subsidiary CDEs. If an Applicant that has already been certified as a CDE wishes to change its designated CDE Service Area for this Allocation Round, then it must submit its request for such change to the CDFI Fund, and the request must be received by the CDFI Fund by the deadline listed in Table 1. A request to change a CDE’s Service Area will need to include the revised service area designation and updated accountability information that demonstrates that the CDE has the required representation from LowIncome Communities in the revised CDE Service Area. 2. Repayment or Refinancing of QEI with QLICI Proceeds: An applicant must commit that it will not permit the use of the proceeds of QEIs to make QLICIs in Qualified Active Low-Income Community Businesses (QALICBs) where QLICI proceeds are used, in whole or in part, to repay or refinance a debt or equity provider whose capital was used to fund the QEI, or are used to repay or refinance any Affiliate of such a debt or equity provider, except where: (i) The QLICI proceeds are used to repay or refinance documented reasonable expenditures that are directly attributable to the qualified PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 business of the QALICB, and such reasonable expenditures were incurred no more than 24 months prior to the QLICI closing date; or (ii) no more than five percent of the total QLICI proceeds from the QEI are used to repay or refinance documented reasonable expenditures that are directly attributable to the qualified business of the QALICB. Refinance includes transferring cash or property, directly or indirectly, to the debt or equity provider or an Affiliate of the debt or equity provider. 3. Do Not Pay: The CDFI Fund will contact the Do Not Pay Business Center to ensure that an Applicant, its Controlling Entity, and any Affiliate(s) are not prohibited from receiving federal funds. An Applicant, its Controlling Entity, and any Affiliate(s) reported by the Do Not Pay Business Center as having a pending or delinquent debt to the Federal government will be required to demonstrate that it has resolved such pending or delinquent debt. Applicants that fail to demonstrate resolution of such pending or delinquent debt to the Federal government will be found ineligible to receive an allocation. 4. Prior award recipients or Allocatees: Applicants must be aware that success in a prior application or allocation round of any of the CDFI Fund’s programs is not indicative of success under this NOAA. For purposes of this NOAA, and eligibility determinations, the CDFI Fund will consider an Affiliate to be any entity that meets the definition of Affiliate as defined in the NMTC Allocation Application materials, or any entity otherwise identified as an Affiliate by the Applicant in its NMTC Allocation Application materials. Prior award recipients of any CDFI Fund program are eligible to apply under this NOAA, except as follows: (a) Prior Allocatees and Qualified Equity Investment (QEI) issuance and Qualified Low Income Community Investment (QLICI) requirements: CDEs that are Allocatees under the CY 2014 to the CY 2019 rounds must finalize at least the percentage of QEIs noted in Table 2 for each NMTC Allocation round and use at least the percentage of those QEIs designated in Schedule 1, section 3.2(j) of their Allocation Agreements to make QLICIs by January 15, 2021. CDEs that are Allocatees under the CY 2014 to the CY 2019 allocation rounds and CDEs that are Allocatees designated as Rural CDEs in their CY 2018 and/or CY 2019 Allocation Agreements must meet the following thresholds. E:\FR\FM\23SEN1.SGM 23SEN1 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices 59855 TABLE 2—QEI ISSUANCE AND QLICI REQUIREMENTS Finalized QEI requirement (%) Prior round allocation khammond on DSKJM1Z7X2PROD with NOTICES CY 2014 ............ CY 2015–16 ...... CY 2017 ............ CY2018 ............. CY2019 ............. Rural CDE finalized QEI requirement (%) 100 90 80 50 25 100 90 80 30 0 In addition to the requirements noted above, a CDE is not eligible to receive a NMTC Allocation pursuant to this NOAA if an Affiliate of the Applicant is a prior Allocatee and has not met the minimum QEIs issuance and QLICI thresholds as set forth in Table 2 for Allocatees in the prior allocation rounds of the NMTC Program. For purposes of this section of the NOAA, the CDFI Fund will only recognize as ‘‘finalized’’ those QEIs that have been properly reported in AMIS Allocation Tracking System for Qualified Equity Investments (AQEIs) by the deadline in Table 1. Allocatees and their Subsidiary Allocatees, if any, are advised to access AMIS to record each QEI that they issue to an investor in exchange for cash. Furthermore, the CDFI Fund will only recognize QLICIs that have been certified in AMIS by the deadline in Table 1. Instructions on recording a QEI and QLICIs in AMIS is available at https://www.cdfifund.gov/ Pages/amisreporting.aspx. Applicants may be required, upon notification from the CDFI Fund, to submit documentation to substantiate the required QEI issuance and QLICI thresholds. Any prior Allocatee that requires any action by the CDFI Fund (i.e., certifying a subsidiary entity as a CDE; adding a subsidiary CDE to an Allocation Agreement; etc.) in order to meet the QEI issuance requirements above must submit a CDE Certification Application for Subsidiary CDEs by the deadline in Table 1 and Allocation Agreement amendment requests by the deadline in Table 1, in order to guarantee that the CDFI Fund completes all necessary approvals prior to January 15, 2021. Applicants for Subsidiary CDE certification may obtain information regarding CDE certification and the CDE Certification Application process in AMIS on the CDFI Fund’s website at https://www.cdfifund.gov/programstraining/certification/cde/Pages/ default.aspx. (b) Pending determination of noncompliance or default: If an Applicant is a prior award recipient or VerDate Sep<11>2014 19:13 Sep 22, 2020 Jkt 250001 QLICIs As stated in Section 3.2(j) of the applicable Allocation Agreement. Allocatee under any CDFI Fund program and if: (i) It has demonstrated noncompliance with a previous assistance or award agreement or default under a previous Allocation Agreement; and (ii) the entity has been given a timeframe to cure the noncompliance or default, the CDFI Fund will consider the Applicant’s application under this NOAA during the time period given for the entity to cure the noncompliance or default, and until such time as the CDFI Fund makes a final determination that the entity is in noncompliance or default. Further, if an Affiliate of the Applicant is a prior CDFI Fund award recipient or Allocatee and if such entity: (i) Has demonstrated noncompliance with a previous assistance or award agreement or default under a previous Allocation Agreement; and (ii) the entity has been given a timeframe to cure the noncompliance or default, then the CDFI Fund will consider the Applicant’s application under this NOAA during the time period given for the entity to cure the noncompliance or default, and until such time as the CDFI Fund makes a final determination that the entity is in noncompliance or default. (c) Noncompliance or default status: The CDFI Fund will not consider an application submitted by an Applicant that is a prior CDFI Fund award recipient or Allocatee under any CDFI Fund program if, as of the application deadline of this NOAA: (i) The CDFI Fund has made a final determination that such Applicant is noncompliant with a previously executed assistance or award agreement, or in default of a previously executed Allocation Agreement; and (ii) the CDFI Fund has provided written notification of such final determination to the Applicant; and (iii) the default occurs during the time period beginning 12 months prior to the application deadline and ending with the CY 2020 allocation award announcement. Further, the CDFI Fund will not consider an application submitted by an Applicant with an Affiliate that is a prior award recipient or Allocatee under any CDFI Fund PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 Program if, as of the application deadline of this NOAA: (i) The CDFI Fund has made a final determination that such Affiliate is noncompliant with a previously executed assistance or award agreement, or in default of a previously executed Allocation Agreement; (ii) the CDFI Fund has provided written notification of such final determination to the Affiliate; and (iii) the default occurs during the time period beginning 12 months prior to the application deadline and ending with the CY 2020 allocation award announcement. (d) Contacting the CDFI Fund: Accordingly, Applicants that are prior award recipients and/or Allocatees under any CDFI Fund program are advised to comply with the requirements specified in assistance, allocation and/or award agreement(s). All outstanding reports and compliance questions should be directed to the Office of Certification, Compliance Monitoring and Evaluation (CCME) through a Service Request initiated in AMIS. Requests submitted less than 30 calendar days prior to the application deadline may not receive a response before the application deadline. The CDFI Fund will respond to Applicants’ reporting, compliance and CDE certification inquiries Monday through Friday, between the hours of 9:00 a.m. and 5:00 p.m. ET, starting the date of publication of this NOAA through the ‘‘Last date to contact CDFI Fund staff’’ specified in Table 1. Inquiries received after the ‘‘Last date to contact the CDFI Fund staff’’ will be responded to after the Allocation Application deadline. 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, accurately responded to a question, but failed to submit a required written explanation, or failed to notify E:\FR\FM\23SEN1.SGM 23SEN1 khammond on DSKJM1Z7X2PROD with NOTICES 59856 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices the CDFI Fund of any changes to the information submitted between the date of application and the date the Allocatee executes the Allocation Agreement, with respect to the Assurances and Certifications. In making this determination, the CDFI Fund will take into consideration, among other factors, the materiality of the question, the substance of any supplemental responses provided, and whether the information in the Applicant’s supplemental responses would have a material adverse effect on the Applicant, its financial condition or its ability to perform under an Allocation Agreement, should the Applicant receive an allocation. 5. Entities that propose to transfer NMTCs to Subsidiary CDEs: Both forprofit 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 Subsidiary CDEs that are for-profit entities; and (ii) it intends to transfer the full amount of any NMTC Allocation it receives to said Subsidiary CDEs. An Applicant wishing to transfer all or a portion of its NMTC Allocation to a Subsidiary CDE is not required to create the Subsidiary prior to submitting 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 45 days after the non-profit Applicant receives notification from the CDFI Fund of its allocation award, as such Subsidiary must be certified as a CDE prior to entering into an Allocation Agreement with the CDFI Fund. The CDFI Fund reserves the right to rescind the award if a non-profit Applicant that does not already have a certified forprofit Subsidiary CDE fails to submit a CDE Certification Application for one or more for-profit Subsidiaries within 45 days of the date it receives notification from the CDFI Fund of its allocation award. 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 VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 the Allocation Application. If an Applicant and its Affiliate(s) wish to submit Allocation Applications, they must do so collectively, in one application; an Applicant and its Affiliate(s) may not submit separate Allocation Applications. If Affiliated entities submit multiple applications, the CDFI Fund will reject all such applications received, except for those state-owned or state-controlled governmental Affiliated entities. In the case of state-owned or state-controlled governmental entities, the CDFI Fund may accept applications submitted by different government bodies within the same state, but only to the extent the CDFI Fund determines that the business strategies and/or activities described in such applications, submitted by separate entities, are distinctly dissimilar and/or are operated and/or managed by distinctly dissimilar personnel, including staff, board members and identified consultants. In such cases, the CDFI Fund reserves the right to limit award amounts to such entities to ensure that the entities do not collectively receive more than the $100 million cap. If the CDFI Fund determines that the applications submitted by different government bodies in the same state are not distinctly dissimilar and/or operated and/or managed by distinctly dissimilar personnel, it will reject all such applications. (b) For purposes of this NOAA, the CDFI Fund will also evaluate whether each Applicant is operated or managed as a ‘‘common enterprise’’ with another Applicant in this Allocation Round using the following indicia, among others: (i) Whether different Applicants have the same individual(s), including the Authorized Representative, staff, board members and/or consultants, involved in day-to-day management, operations and/or investment responsibilities; (ii) whether the Applicants have business strategies and/ or proposed activities that are so similar or so closely related that, in fact or effect, they may be viewed as a single entity; and/or (iii) whether the applications submitted by separate Applicants contain significant narrative, textual or other similarities such that they may, in fact or effect, be viewed as substantially identical applications. In such cases, the CDFI Fund will reject all applications received from such entities. (c) Furthermore, an Applicant that receives an NMTC Allocation in this Allocation Round (or its Subsidiary Allocatee) may not become an Affiliate of or member of a common enterprise (as defined above) with another Applicant that receives an NMTC PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 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 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’s AMIS. E:\FR\FM\23SEN1.SGM 23SEN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices Following the publication of this NOAA, the CDFI Fund will make the electronic Allocation Application available on its website at https:// www.cdfifund.gov. B. Application content requirements: Detailed application content requirements are found in the application related to this NOAA. Applicants must submit all materials described in and required by the application by the applicable deadlines. Applicants will not be afforded an opportunity to provide any missing materials or documentation, except, if necessary and at the request of the CDFI Fund. Electronic applications must be submitted solely by using the format made available via AMIS. Additional information, including instructions relating to the submission of supporting information (e.g., the Controlling Entity’s representative signature page, Assurances and Certifications supporting documents, investor letters, organizational charts), is set forth in further detail in the CY 2020 NMTC Application—AMIS Navigation Guide for this Allocation Round. An application must include a valid and current Employer Identification Number (EIN) issued by the Internal Revenue Service (IRS) and assigned to the Applicant and, if applicable, its Controlling Entity. Electronic applications without a valid EIN are incomplete and cannot be transmitted to the CDFI Fund. For more information on obtaining an EIN, please contact the IRS at (800) 829–4933 or www.irs.gov. Do not include any personal Social Security Numbers as part of the application. 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 via AMIS, the CDFI Fund’s Award Management Information System. Applications and required attachments sent by mail, facsimile, or email will not be accepted. Submission of an electronic application will facilitate the processing and review of applications and the selection of Allocatees; further, it will assist the CDFI Fund in the implementation of electronic reporting requirements. VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 Electronic applications must be submitted solely by using the CDFI Fund’s website and must be sent in accordance with the submission instructions provided in the CY 2020 NMTC Application—AMIS Navigation Guide for this Allocation Rounds. AMIS will only permit the submission of applications in which all required questions and tables are fully completed. Additional information, including instructions relating to the submission of supporting information (e.g., the Controlling Entity’s representative signature page, Assurances and Certifications supporting documents, investor letters, and organizational charts) is set forth in further detail in the CY 2020 NMTC Application—AMIS Navigation Guide for this Allocation Round. D. Application submission dates and times: Electronic applications must be received by the Allocation Application deadline in Table 1. Electronic applications cannot be transmitted or received after Allocation Application deadline in Table 1. In addition, Applicants must electronically submit supporting information (e.g., the Controlling Entity’s representative signature page, investor letters, and organizational charts). The Controlling Entity’s representative signature page, Assurances and Certifications supporting documents, investor letters, and organizational charts must be submitted on or before Application deadline in Table 1. For details, see the instructions provided in the CY 2020 NMTC Application—AMIS Navigation Guide for this Allocation Round on the CDFI Fund’s website. Applications and other required documents received after this date and time will be rejected. Please note that the document submission deadlines in this NOAA and/or the Allocation Application are strictly enforced. 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 PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 59857 assigned the following control number: 1559–0016. V. Application Review Information A. Review and selection process: All Allocation Applications will be reviewed for eligibility and completeness. To be complete, the application must contain, at a minimum, all information described as required in the application form. An incomplete application will be rejected. Once the application has been determined to be eligible and complete, the CDFI Fund will conduct the substantive review of each application in two parts (Phase 1 and Phase 2) in accordance with the criteria and procedures generally described in this NOAA and the Allocation Application. In Phase 1, two reviewers will evaluate and score the Business Strategy and Community Outcomes sections of each application. An Applicant must exceed a minimum overall aggregate base score threshold and exceed a minimum aggregate section score threshold in each scored section in order to advance from the Phase 1 to the Phase 2 part of the substantive review process. In Phase 2, the CDFI Fund will rank Applicants and determine the dollar amount of allocation authority awarded in accordance with the procedures set forth below. B. Criteria: 1. Business Strategy (25-point maximum): (a) When assessing an Applicant’s business strategy, reviewers will consider, among other things: The Applicant’s products, services and investment criteria; a pipeline of potential business loans or investments consistent with an Applicant’s request for an NMTC Allocation; the prior performance of the Applicant or its Controlling Entity, particularly as it 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 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 E:\FR\FM\23SEN1.SGM 23SEN1 khammond on DSKJM1Z7X2PROD with NOTICES 59858 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices 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 of QEIs; (iii) its projected dollar volume of NMTC Allocation 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 endusers such as tenant businesses, or residents of Low-Income Communities. (b) Priority Points: In addition, as provided by IRC § 45D(f)(2), the CDFI Fund will ascribe additional points to entities that meet one or both of the statutory priorities. First, the CDFI Fund will give up to five additional points to any Applicant that has a record of having successfully provided capital or technical assistance to disadvantaged businesses or communities. Second, the CDFI Fund will give five additional points to any Applicant that intends to satisfy the requirement of IRC § 45D(b)(1)(B) by making QLICIs in one or more businesses in which persons unrelated (within the meaning of IRC § 267(b) or IRC § 707(b)(1)) to an Applicant (and the Applicant’s Subsidiary CDEs, if the Subsidiary Allocatee makes the QLICI) hold the majority equity interest. Applicants may earn points for one or both statutory priorities. Thus, Applicants that meet the requirements of both priority categories can receive up to a total of ten additional points. A record of having successfully provided capital or technical assistance to disadvantaged businesses or communities may be demonstrated either by the past actions of an Applicant itself or by its Controlling Entity (e.g., where a new CDE is established by a nonprofit corporation with a history of providing assistance to disadvantaged communities). An Applicant that receives additional points for intending to make investments in unrelated businesses and is awarded a NMTC VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 Allocation must meet the requirements of IRC § 45D(b)(1)(B) by investing substantially all of the proceeds from its QEIs in unrelated businesses. The CDFI Fund will include an Applicant’s priority points when ranking Applicants during Phase 2 of the review process, as described below. 2. Community Outcomes (25-point maximum): In assessing the potential benefits to Low-Income Communities that may result from the Applicant’s proposed investments, reviewers will consider, among other things, the degree to which the Applicant is likely to: (i) Achieve significant and measurable community development outcomes in its Low-Income Communities; (ii) invest in particularly economically distressed markets including areas identified in the Allocation Application such as Federally designated Opportunity Zones; (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; and (g) it is likely to engage in activities that will spur additional private capital investment. C. Phase 2 Evaluation: 1. Application Ranking and Anomaly Reviews: Using the numeric scores from Phase 1, Applicants are ranked on the basis of each Applicant’s combined scores in the Business Strategy and Community Outcomes sections of the application plus one half of the priority points. If, in the case of a particular application, a reviewer’s total base score or section score(s) (in one or more of the two application scored sections) varies significantly from the other reviewer’s PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 total base scores or section scores for such application, the CDFI Fund may, in its sole discretion, obtain the evaluation and numeric scoring of an additional third reviewer to determine whether the anomalous score should be replaced with the score of the additional third reviewer. 2. Late Reports: In the case of an Applicant or any Affiliates that have previously received an award or NMTC Allocation from the CDFI Fund through any CDFI Fund program, the CDFI Fund will deduct points up to five points from the Applicant’s final rank score for the Applicant’s (or its Affiliate’s) failure to meet any of the reporting deadlines set forth in any assistance, award or Allocation Agreement(s), if the reporting deadlines occurred during the period from October 29, 2019 to the application deadline in this NOAA. 3. Prior Year Allocatees: In the case of Applicants (or their Affiliates) that are prior year Allocatees, the CDFI Fund will review the activities of the prior year Allocatee to determine whether the entity has: (a) Effectively utilized its prior-year NMTC Allocations in a manner generally consistent with the representations made in the relevant Allocation Application (including, but not limited to, the proposed product offerings, QALICB type, fees and markets served); (b) issued QEIs and closed QLICIs in a timely manner; and (c) substantiated a need for additional NMTC Allocation authority. The CDFI Fund will use this information in determining whether to reject or reduce the allocation award amount of its NMTC Allocation Application. 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’s, if applicable): Principals; board members; management team; and other essential staff or contractors, with specific focus on: Experience in providing loans; equity investments or financial counseling and other services, including activities similar to those described in the Applicant’s business strategy; asset management and risk management experience; experience with fulfilling compliance requirements of other governmental programs, including other tax credit programs; and the Applicant’s (or its Controlling Entity’s) financial health. CDFI Fund evaluators will also consider the extent to which an Applicant has protocols in place to ensure ongoing compliance with NMTC Program requirements and the Applicant’s projected income and E:\FR\FM\23SEN1.SGM 23SEN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices 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, has its most recent Community Reinvestment Act (CRA) rating as ‘‘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 NMTC Allocations, or, if a prior Allocatee, the track record of the Applicant or its Affiliates in raising Qualified Equity Investments in the past five years; the Applicant’s strategy for identifying additional investors, if necessary, including the Applicant’s (or its Controlling Entity’s) prior performance with raising equity from investors, particularly for-profit investors; the distribution of the economic benefits of the tax credit; and the extent to which the Applicant intends to invest the proceeds from the aggregate amount of its QEIs at a level that exceeds the requirements of IRC § 45D(b)(1)(B) and the IRS regulations. An Applicant will be evaluated more favorably under this section to the extent that: (a) It or its Controlling Entity demonstrate a track record of raising investment capital; (b) it has secured investor commitments, or has a reasonable strategy for obtaining such commitments, or, if it or its Affiliates is a prior Allocatee with a track record in the past five years of raising Qualified Equity Investments and; (c) it generally VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 demonstrates that the economic benefits of the tax credit will be passed through to a QALICB; and (d) it intends to invest the proceeds from the aggregate amount of its QEIs at a level that exceeds the requirements of IRC § 45D(b)(1)(B) and the IRS regulations. In the case of an Applicant proposing to raise investor funds from organizations that also will identify or originate transactions for the Applicant or from Affiliated entities, said Applicant will be evaluated more favorably to the extent that it will offer products with more favorable rates or terms than those currently offered by its investor(s) or Affiliated entities and/or will target its activities to areas of greater economic distress than those currently targeted by the investor or Affiliated entities. 6. Contacting Applicants: As a part of the substantive review process, the CDFI Fund may permit the NMTC Allocation recommendation panel member(s) to request information from Applicants for the sole purpose of obtaining, clarifying or confirming application information or omission of information. In no event shall such contact be construed to permit an Applicant to change any element of its application. At this point in the process, an Applicant may be required to submit additional information about its application in order to assist the CDFI Fund with its final evaluation process. If the Applicant (or the Controlling Entity or any Affiliate) has previously been awarded an NMTC Allocation, the CDFI Fund may also request information on the use of those NMTC Allocations, to the extent that this information has not already been reported to the CDFI Fund. Such requests must be responded to within the time parameters set by the CDFI Fund. The selecting official(s) will make a final allocation determination based on an Applicant’s file, including, without limitation, eligibility under IRC § 45D, the reviewers’ scores and the amount of NMTC Allocation authority available. 7. Award Decisions: The CDFI Fund will award allocations in descending order of the final rank score, subject to Applicants meeting all other eligibility requirements; provided, however, that the CDFI Fund, in its sole discretion, reserves the right to reject an application and/or adjust award amounts as appropriate based on information obtained during the review process. D. Allocations serving 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 PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 59859 a proportional allocation of QEIs under the NMTC Program. The CDFI Fund will endeavor to ensure that 20 percent of the QLICIs to be made using QEI proceeds are invested in NonMetropolitan counties. In addition, the CDFI Fund will ensure that the proportion of Allocatees that are Rural CDEs is, at a minimum, equal to the proportion of Applicants in the highly qualified pool that are Rural CDEs. A Rural CDE is one that has a track record of at least three years of direct financing experience, has dedicated at least 50 percent of its direct financing dollars to Non-Metropolitan counties over the past five years, and has committed that at least 50 percent of its NMTC financing dollars with this NMTC Allocation will be deployed in such areas. 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 descending order of their final rank score, until the appropriate percentage balance is achieved. In order to accommodate the additional Rural CDEs in the Allocatee pool within the available NMTC Allocation limitations, a formula reduction may be applied as uniformly as possible to the allocation amount for all Allocatees in the pool that have not committed to investing a minimum of 20 percent of their QLICIs in Non-Metropolitan counties. The CDFI Fund will then determine whether the pool of Allocatees will, in the aggregate, invest at least 20 percent of their QLICIs (as measured by dollar amount) in Non-Metropolitan counties. The CDFI Fund will first apply the ‘‘minimum’’ percentage of QLICIs that Allocatees indicated in their E:\FR\FM\23SEN1.SGM 23SEN1 khammond on DSKJM1Z7X2PROD with NOTICES 59860 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices applications would be targeted to NonMetropolitan areas to the total NMTC Allocation award amount of each Allocatee (less whatever percentage the Allocatee indicated would be retained for non-QLICI activities), and total these figures for all Allocatees. If this aggregate total is greater than or equal to 20 percent of the QLICIs to be made by the Allocatees, then the pool is considered balanced and the CDFI Fund will proceed with the NMTC Allocation process. However, if the aggregate total is less than 20 percent of the QLICIs to be made by the Allocatees, the CDFI Fund will consider requiring any or all of the Allocatees to direct up to the ‘‘maximum’’ percentage of QLICIs that the Allocatees indicated would be targeted to Non-Metropolitan counties, taking into consideration their track record and ability to deploy dollars in Non-Metropolitan counties. If the CDFI Fund cannot meet the goal of 20 percent of QLICIs in Non-Metropolitan counties by requiring any or all Allocatees to commit up to the maximum percentage of QLICIs that they indicated would be targeted to Non-Metropolitan counties, the CDFI Fund may add additional highly qualified Rural CDEs (in descending order of final rank score) to the Allocatee pool. In order to accommodate any additional Allocatees within the allocation limitations, a formula reduction will be applied as uniformly as possible, to the allocation amount for all Allocatees in the pool that have not committed to investing a minimum of 20 percent of their QLICIs in Non-Metropolitan counties. E. Right of rejection: The CDFI Fund reserves the right to reject any NMTC Allocation Application in the case of a prior CDFI Fund award recipient, if such Applicant has failed to comply with the terms, conditions, and other requirements of the prior or existing assistance or award agreement(s) with the CDFI Fund. 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 VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 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 NMTC Allocation(s) or such Applicant has been found by the IRS to have engaged in a transaction or series of transactions designed to achieve a result that is inconsistent with the purposes of IRC § 45D. The CDFI Fund also reserves the right to reject or reduce the allocation award amount of any NMTC Allocation Application in the case of an Affiliate of the Applicant that is a prior Allocatee and has failed to use its prior NMTC Allocation(s) in a manner that is generally consistent with the business strategy (including, but not limited to, the proposed product offerings, QALICB type, fees and markets served) set forth in the Allocation Application(s) related to such prior NMTC Allocation(s) or has been found by the IRS to have engaged in a transaction or series of transactions designed to achieve a result that is inconsistent with the purposes of IRC § 45D. The CDFI Fund reserves the right to reject an NMTC Allocation Application if information (including, but not limited to, administrative errors or omission of information) comes to the attention of the CDFI Fund that adversely affects an Applicant’s eligibility for an award, adversely affects the CDFI Fund’s evaluation or scoring of an application, adversely affects the CDFI Fund’s prior determinations of CDE certification, or indicates fraud or mismanagement on the part of an Applicant, its Affiliate(s), or the Controlling Entity, if such fraud or mismanagement by the Affiliate(s) or Controlling Entity would hinder the Applicant’s ability to perform under the Allocation Agreement. If the CDFI Fund determines that any portion of the application is incorrect in any material respect, the CDFI Fund reserves the right, in its sole discretion, to reject the application. The CDFI Fund reserves the right to reject any NMTC Allocation Application if additional information is obtained that, after further due diligence and in the discretion of the CDFI Fund, would hinder the Applicant’s ability to effectively perform under the Allocation Agreement. In the case of Applicants (or the Controlling Entity, or Affiliates) that are regulated or receive oversight by the Federal government or a state agency (or comparable entity), the CDFI Fund may PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 request additional information from the Applicant regarding Assurances and Certifications or other information about the ability of the Applicant to effectively perform under the Allocation Agreement. The NMTC Allocation recommendation panel or selecting official(s) reserve(s) the right to consult with and take into consideration the views of the appropriate Federal banking and other regulatory agencies. In the case of Applicants (or Affiliates of Applicants) that are also Small Business Investment Companies, Specialized Small Business Investment Companies or New Markets Venture Capital Companies, the CDFI Fund reserves the right to consult with and take into consideration the views of the Small Business Administration. An Applicant that is or is affiliated with an insured depository institution will not be awarded an NMTC Allocation if it has a composite rating of ‘‘5’’ on its most recent examination, performed in accordance with the Uniform Financial Institutions Rating System. Furthermore, the CDFI Fund will not award an NMTC Allocation to an Applicant that is an insured depository institution or is an Affiliate of an insured depository institution, if during the time period beginning with the application deadline and ending with the execution of the CY 2020 Allocation Agreement; the Applicant received any of the following: 1. CRA assessment rating of below ‘‘Satisfactory’’ on its most recent examination; 2. A going concern opinion on its most recent audit; or 3. A Prompt Corrective Action directive from its regulator. The CDFI Fund reserves the right to conduct additional due diligence on all Applicants, as determined reasonable and appropriate by the CDFI Fund, in its sole discretion, related to the Applicant, Affiliates, the Applicant’s Controlling Entity and the officers, directors, owners, partners and key employees of each. This includes the right to consult with the IRS if the Applicant (or the Controlling Entity, or Affiliates) has previously been awarded an NMTC Allocation. F. Allocation Announcement: Each Applicant will be informed of the CDFI Fund’s award decision through an electronic notification whether selected for an allocation or not selected for an allocation, which may be for reasons of application incompleteness, ineligibility, or substantive issues. Eligible Applicants that are not selected for an allocation based on substantive issues will likely be given the opportunity to receive feedback on their E:\FR\FM\23SEN1.SGM 23SEN1 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices khammond on DSKJM1Z7X2PROD with NOTICES 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. The CDFI Fund reserves the right, in its sole discretion, to rescind an allocation made under this NOAA, should an Allocatee be identified as ineligible due to pending or delinquent debt to the Federal government in the Do Not Pay database. There is no right to appeal the CDFI Fund’s NMTC Allocation decisions. The CDFI Fund’s NMTC Allocation decisions are final. VI. Award Administration Information A. Allocation Award Compliance 1. Failure to meet reporting requirements: If an Allocatee, or an Affiliate of an Allocatee, is a prior CDFI Fund award recipient or Allocatee under any CDFI Fund program and is not current on the reporting requirements set forth in the previously executed assistance, allocation, or award agreement(s) as of the date the CDFI Fund provides notification of an NMTC Allocation award or thereafter, the CDFI Fund reserves the right, in its sole discretion, to reject the application, delay entering into an Allocation Agreement, and/or impose limitations on an Allocatee’s ability to issue QEIs to investors until said prior award recipient or Allocatee is current on the reporting requirements in the previously executed assistance, allocation, or award agreement(s). Please note that the automated systems the CDFI Fund uses for receipt of reports submitted electronically typically acknowledges only a report’s receipt; such an acknowledgment does not warrant that the report received was complete and therefore met reporting requirements. 2. Pending determination of noncompliance or default: If an Allocatee is a prior award recipient or Allocatee under any CDFI Fund program and if: (i) It has demonstrated noncompliance with a previous assistance or award agreement or a default under an Allocation Agreement; and (ii) the entity has been given a timeframe to cure the noncompliance or default the CDFI Fund reserves the right, in its sole discretion, to delay entering into an Allocation Agreement and/or to impose limitations on the VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 Allocatee’s ability to issue QEIs to investors, during the time period given for the entity to cure the noncompliance or default and until such time as the CDFI Fund makes a final determination that the entity is in noncompliance or default, and determination of remedies, if applicable, in the sole determination of the CDFI Fund. Further, if an Affiliate of an Allocatee is a prior CDFI Fund award recipient or Allocatee and if such entity: (i) Has demonstrated noncompliance under a previous assistance or award agreement or default under a previous Allocation Agreement; and (ii) the entity has been given a timeframe to cure the noncompliance or default, the CDFI Fund reserves the right, in its sole discretion, to delay entering into an Allocation Agreement and/or to impose limitations on the Allocatee’s ability to issue QEIs to investors, during the time period given for the entity to cure the noncompliance or default and until such time as the CDFI Fund makes a final determination that the entity is in noncompliance or default, and determination of remedies, if applicable, in the sole determination of the CDFI Fund. If the prior award recipient or Allocatee in question is unable to satisfactorily resolve the issues of noncompliance or default, in the sole determination of the CDFI Fund, the CDFI Fund reserves the right, in its sole discretion, to terminate and rescind the award notification made under this NOAA. 3. Determination of noncompliance or default status: If prior to entering into an Allocation Agreement through this NOAA, the CDFI Fund has made a final determination that an Allocatee that is a prior CDFI Fund award recipient or Allocatee under any CDFI Fund program is (i) noncompliant with a previously executed assistance or award agreement, or is in default of a previously executed Allocation Agreement; (ii) the CDFI Fund has provided written notification of such determination to such organization; and (iii) the noncompliance or default occurs during the time period beginning 12 months prior to the application deadline and ending with the execution of the CY 2020 Allocation Agreement, the CDFI Fund reserves the right, in its sole discretion, to delay entering into an Allocation Agreement and/or to impose limitations on the Allocatee’s ability to issue QEIs to investors, or to terminate and rescind the NMTC Allocation made under this NOAA. Furthermore, if prior to entering into an Allocation Agreement through this NOAA: (i) The CDFI Fund has made a final determination that an Affiliate of an Allocatee that is a prior CDFI Fund PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 59861 award recipient or Allocatee under any CDFI Fund programs is in noncompliance of a previously executed assistance or award agreement or in default of a previously executed Allocation 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 12 months prior to the application deadline and ending with the execution of the CY 2020 Allocation Agreement, the CDFI Fund reserves the right, in its sole discretion, to delay entering into an Allocation Agreement and/or to impose limitations on the Allocatee’s ability to issue QEIs to investors, or to terminate and rescind the NMTC Allocation made under this NOAA. B. Allocation Agreement: Each Allocatee (including their Subsidiary Allocatees) must enter into an Allocation Agreement with the CDFI Fund. The Allocation Agreement will set forth certain required terms and conditions of the NMTC Allocation which may include, but are not limited to, the following: (i) The amount of the awarded NMTC Allocation; (ii) the approved uses of the awarded NMTC Allocation (e.g., loans to or equity investments in QALICBs, loans to or equity investments in other CDEs); (iii) the approved service area(s) in which the proceeds of QEIs may be used, including the dollar amount of QLICIs that must be invested in NonMetropolitan counties; (iv) commitments to specific ‘‘innovative activities’’ discussed by the Allocatee in its Allocation Application; (v) the time period by which the Allocatee may obtain QEIs from investors; (vi) reporting requirements for the Allocatee; and (vii) a requirement to maintain certification as a CDE throughout the term of the Allocation Agreement. If an Allocatee represented in its NMTC Allocation Application that it intends to invest substantially all of the proceeds from its investors in businesses in which persons unrelated to the Allocatee hold a majority equity interest, the Allocation Agreement will contain a covenant to that effect. In addition to entering into an Allocation Agreement, each Allocatee must furnish to the CDFI Fund an opinion from its legal counsel or a similar certification, the content of which will be further specified in the Allocation Agreement, to include, among other matters, an opinion that an Allocatee (and its Subsidiary Allocatees, if any): (i) Is duly formed and in good standing in the jurisdiction in which it was formed and the jurisdiction(s) in which it operates; E:\FR\FM\23SEN1.SGM 23SEN1 59862 Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / Notices khammond on DSKJM1Z7X2PROD with NOTICES (ii) has the authority to enter into the Allocation Agreement and undertake the activities that are specified therein; (iii) has no pending or threatened litigation that would materially affect its ability to enter into and carry out the activities specified in the Allocation Agreement; and (iv) is not in default of its articles of incorporation, bylaws or other organizational documents, or any agreements with the Federal government. If an Allocatee identifies Subsidiary Allocatees, the CDFI Fund reserves the right to require an Allocatee to provide supporting documentation evidencing that it Controls such entities prior to entering into an Allocation Agreement with the Allocatee and its Subsidiary Allocatees. The CDFI Fund reserves the right, in its sole discretion, to rescind its NMTC Allocation award if the Allocatee fails to return the Allocation Agreement, signed by the authorized representative of the Allocatee, and/or provide the CDFI Fund with any other requested documentation, including an approved legal opinion, within the deadlines set by the CDFI Fund. C. Fees: The CDFI Fund reserves the right, in accordance with applicable Federal law and, if authorized, to charge allocation reservation and/or compliance monitoring fees to all entities receiving NMTC Allocations. Prior to imposing any such fee, the CDFI Fund will publish additional information concerning the nature and amount of the fee. D. Reporting: The CDFI Fund will collect information, on at least an annual basis from all Allocatees and/or CDEs that are recipients of QLICIs, including such audited financial statements and opinions of counsel as the CDFI Fund deems necessary or desirable, in its sole discretion. The CDFI Fund will require the Allocatee to retain information as the CDFI Fund deems necessary or desirable and shall provide such information to the CDFI VerDate Sep<11>2014 18:02 Sep 22, 2020 Jkt 250001 Fund when requested to monitor each Allocatee’s compliance with the provisions of its Allocation Agreement and to assess the impact of the NMTC Program in Low-Income Communities. The CDFI Fund may also provide such information to the IRS in a manner consistent with IRC § 6103 so that the IRS may determine, among other things, whether the Allocatee has used substantially all of the proceeds of each QEI raised through its NMTC Allocation to make QLICIs. The Allocation Agreement shall further describe the Allocatee’s reporting requirements. The CDFI Fund reserves the right, in its sole discretion, to modify these reporting requirements if it determines it to be appropriate and necessary; however, such reporting requirements will be modified only after due notice to Allocatees. VII. Agency Contacts The CDFI Fund will provide programmatic and information technology support related to the Allocation Application Mondays through Fridays, between the hours of 9:00 a.m. and 5:00 p.m. ET through the last day to contact the CDFI Fund. The CDFI Fund will not respond to phone calls or emails concerning the application that are received after the last day to contact the CDFI Fund. The CDFI Fund will respond to such phone calls or emails after the Allocation Application deadline in Table 1. Applications and other information regarding the CDFI Fund and its programs may be obtained from the CDFI Fund’s website at https:// www.cdfifund.gov. The CDFI Fund will post on its website responses to questions of general applicability regarding the NMTC Program. A. Information technology support: Technical support can be obtained by calling (202) 653–0422 or by submitting a Service Request in AMIS. People who have visual or mobility impairments PO 00000 Frm 00128 Fmt 4703 Sfmt 9990 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 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. Jodie L. Harris, Director, Community Development Financial Institutions Fund. [FR Doc. 2020–20931 Filed 9–22–20; 8:45 am] BILLING CODE 4810–70–P E:\FR\FM\23SEN1.SGM 23SEN1

Agencies

[Federal Register Volume 85, Number 185 (Wednesday, September 23, 2020)]
[Notices]
[Pages 59853-59862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20931]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Funding Opportunity Title: Notice of Allocation Availability 
(NOAA) Inviting Applications for the Calendar Year (CY) 2020 Allocation 
Round of the New Markets Tax Credit (NMTC) Program

    Announcement Type: Announcement of NMTC Allocation availability.
    Dates:

                                    Table 1--CY 2020 Allocation Round NMTC Program Critical Deadlines for Applicants
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Description                             Deadline/date                       Time (eastern time--ET)                Submission method
--------------------------------------------------------------------------------------------------------------------------------------------------------
Community Development Entity (CDE)      October 6, 2020.........................  11:59 p.m. ET..........................  Electronically via the Awards
 Certification Application.                                                                                                 Management Information
                                                                                                                            System (AMIS).
Request to modify CDE certification     October 6, 2020.........................  11:59 p.m. ET..........................  Electronically via AMIS.
 service area.
Subsidiary CDE Certification            October 6, 2020.........................  11:59 p.m. ET..........................  Electronically via AMIS.
 Application for meeting Qualified
 Equity Investment (QEI) issuance
 thresholds.
CY 2020 Application Registration......  October 9, 2020.........................  5:00 p.m. ET...........................  Electronically via AMIS.
Last date to contact CDFI Fund staff..  November 12, 2020.......................  5:00 p.m. ET...........................  Electronically via AMIS.
CY 2020 Allocation Application          November 16, 2020.......................  5:00 p.m. ET...........................  Electronically via AMIS.
 (including required Attachments).
Amendment request to add Subsidiary     December 4, 2020........................  11:59 p.m. ET..........................  Electronically via AMIS.
 CDEs to Allocation Agreements for
 meeting QEI issuance thresholds.
QEI Issuance and making Qualified Low   January 15, 2021........................  11:59 p.m. ET..........................  Not Applicable.
 Income Community Investments (QLICIs)
 by:.
Reporting QEIs and QLICIs closed as of  January 29, 2021........................  11:59 p.m. ET..........................  Electronically via AMIS.
 January 15, 2021.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Executive Summary: This NOAA is issued in connection with the CY 
2020 allocation round (Allocation Round) of the New Markets Tax Credit 
Program (NMTC Program), as authorized by Title I, subtitle C, section 
121 of the Community Renewal Tax Relief Act of 2000 (Pub. L. 106-554) 
as amended. (26 U.S.C. 45D). Through the NMTC Program, the Community 
Development Financial Institutions Fund (CDFI Fund) provides authority 
to certified CDEs to offer an incentive to investors in the form of tax 
credits over seven years, which is expected to stimulate the provision 
of private investment capital that, in turn, will facilitate economic 
and community development in Low-Income Communities. Through this NOAA, 
the CDFI Fund announces the availability of $5 billion of NMTC 
Allocation authority in this Allocation Round. In this NOAA, the CDFI 
Fund specifically addresses how a CDE may apply to receive an 
allocation of NMTCs, the competitive procedure through which NMTC 
Allocations will be made, and the actions that will be taken to ensure 
that proper allocations are made to appropriate entities.

I. Allocation Availability Description

    A. Programmatic changes from the CY 2019 allocation round:
    1. Prior QEI Issuance Requirements: Prior-year NMTC Allocatees will 
be subject to minimum thresholds for QEI issuance and closing of QLICIs 
with respect to their prior-year NMTC Allocations. These thresholds and 
deadlines have been revised in comparison to the CY 2019 NOAA. See 
Section III.3 of this NOAA for additional details.
    2. NMTC Application Registration (Application Registration): CY 
2020 Allocation Round Applicants are first required to complete and 
save the Application Registration section of the NMTC Allocation 
Application in AMIS by the Application Registration deadline in order 
to be able to submit the remaining sections of CY 2020 Allocation 
Application by the Application deadline. Applicants that do not 
complete and save the Application Registration by the Application 
Registration deadline, will not be able to subsequently submit a CY 
2020 Allocation Application in AMIS.

II. Allocation Information

    A. Allocation amounts: Pursuant to the Taxpayer Certainty and 
Disaster Tax Relief Act of 2019, the CDFI Fund expects that it may 
allocate to CDEs the

[[Page 59854]]

authority to issue to their investors the aggregate amount of $5 
billion in equity as to which NMTCs may be claimed, as permitted under 
IRC Sec.  45D(f)(1)(D). Pursuant to this NOAA, the CDFI Fund 
anticipates that it may issue up to $100 million in tax credit 
investment authority per Allocatee. The CDFI Fund, in its sole 
discretion, reserves the right to allocate amounts in excess of or less 
than the anticipated maximum allocation amount should the CDFI Fund 
deem it appropriate. The CDFI Fund reserves the right to allocate NMTC 
authority to any, all, or none of the entities that submit applications 
in response to this NOAA, and in any amounts it deems appropriate.
    B. Type of award: NMTC Program awards are made in the form of 
allocations of tax credit investment authority.
    C. Program guidance and regulations: This NOAA describes 
application and NMTC Allocation requirements for this Allocation Round 
of the NMTC Program and should be read in conjunction with: (i) The 
final NMTC Program Income Tax Regulations issued by the Internal 
Revenue Service (IRS) (26 CFR 1.45D-1, published on December 28, 2004), 
as amended and related guidance, notices and other publications; and 
(ii) the application and related materials for this Allocation Round. 
All such materials may be found on the CDFI Fund's website at https://www.cdfifund.gov. The CDFI Fund requires Applicants to review these 
documents. Capitalized terms used, but not defined, in this NOAA have 
the respective meanings assigned to them in the NMTC Program Allocation 
Application, Internal Revenue Code (IRC) Sec.  45D or the IRS NMTC 
regulations. In the event of any inconsistency between this NOAA, the 
Allocation Application, and guidance issued by the CDFI Fund thereto, 
IRC Sec.  45D or the IRS NMTC Regulations, the provisions of IRC Sec.  
45D and the IRS NMTC Regulations shall govern.
    D. Allocation Agreement: Each Allocatee must sign an Allocation 
Agreement, which must be countersigned by the CDFI Fund, before the 
NMTC Allocation is effective. The Allocation Agreement contains the 
terms and conditions of the NMTC Allocation. For further information, 
see Section VI of this NOAA.
    E. Statutory and national policy requirements: The CDFI Fund will 
manage and administer the NMTC Program in a manner so as to ensure that 
NMTC Allocations associated programs are implemented in full accordance 
with the U.S. Constitution, Federal Law, statutory, and public policy 
requirements: Including, but not limited to, those protecting free 
speech; religious liberty; public welfare; the environment; and 
prohibiting discrimination.

III. Eligibility

    A. Eligible Applicants: IRC 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 AMIS by the deadline 
in Table 1. Applicants for CDE certification may obtain information 
regarding CDE certification and the CDE Certification Application 
process in AMIS on the CDFI Fund's website at https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx.
    The CDFI Fund will not provide NMTC Allocation authority to 
Applicants that are not certified as CDEs or to entities that are 
certified as Subsidiary CDEs.
    If an Applicant that has already been certified as a CDE wishes to 
change its designated CDE Service Area for this Allocation Round, then 
it must submit its request for such change to the CDFI Fund, and the 
request must be received by the CDFI Fund by the deadline listed in 
Table 1. A request to change a CDE's Service Area will need to include 
the revised service area designation and updated accountability 
information that demonstrates that the CDE has the required 
representation from Low-Income Communities in the revised CDE Service 
Area.
    2. Repayment or Refinancing of QEI with QLICI Proceeds: An 
applicant must commit that it will not permit the use of the proceeds 
of QEIs to make QLICIs in Qualified Active Low-Income Community 
Businesses (QALICBs) where QLICI proceeds are used, in whole or in 
part, to repay or refinance a debt or equity provider whose capital was 
used to fund the QEI, or are used to repay or refinance any Affiliate 
of such a debt or equity provider, except where: (i) The QLICI proceeds 
are used to repay or refinance documented reasonable expenditures that 
are directly attributable to the qualified business of the QALICB, and 
such reasonable expenditures were incurred no more than 24 months prior 
to the QLICI closing date; or (ii) no more than five percent of the 
total QLICI proceeds from the QEI are used to repay or refinance 
documented reasonable expenditures that are directly attributable to 
the qualified business of the QALICB. Refinance includes transferring 
cash or property, directly or indirectly, to the debt or equity 
provider or an Affiliate of the debt or equity provider.
    3. Do Not Pay: The CDFI Fund will contact the Do Not Pay Business 
Center to ensure that an Applicant, its Controlling Entity, and any 
Affiliate(s) are not prohibited from receiving federal funds. An 
Applicant, its Controlling Entity, and any Affiliate(s) reported by the 
Do Not Pay Business Center as having a pending or delinquent debt to 
the Federal government will be required to demonstrate that it has 
resolved such pending or delinquent debt. Applicants that fail to 
demonstrate resolution of such pending or delinquent debt to the 
Federal government will be found ineligible to receive an allocation.
    4. Prior award recipients or Allocatees: Applicants must be aware 
that success in a prior application or allocation round of any of the 
CDFI Fund's programs is not indicative of success under this NOAA. For 
purposes of this NOAA, and eligibility determinations, the CDFI Fund 
will consider an Affiliate to be any entity that meets the definition 
of Affiliate as defined in the NMTC Allocation Application materials, 
or any entity otherwise identified as an Affiliate by the Applicant in 
its NMTC Allocation Application materials.
    Prior award recipients of any CDFI Fund program are eligible to 
apply under this NOAA, except as follows:
    (a) Prior Allocatees and Qualified Equity Investment (QEI) issuance 
and Qualified Low Income Community Investment (QLICI) requirements: 
CDEs that are Allocatees under the CY 2014 to the CY 2019 rounds must 
finalize at least the percentage of QEIs noted in Table 2 for each NMTC 
Allocation round and use at least the percentage of those QEIs 
designated in Schedule 1, section 3.2(j) of their Allocation Agreements 
to make QLICIs by January 15, 2021. CDEs that are Allocatees under the 
CY 2014 to the CY 2019 allocation rounds and CDEs that are Allocatees 
designated as Rural CDEs in their CY 2018 and/or CY 2019 Allocation 
Agreements must meet the following thresholds.

[[Page 59855]]



                                  Table 2--QEI Issuance and QLICI Requirements
----------------------------------------------------------------------------------------------------------------
                                                            Rural CDE
        Prior round allocation           Finalized QEI    finalized QEI                   QLICIs
                                        requirement (%)  requirement (%)
----------------------------------------------------------------------------------------------------------------
CY 2014...............................              100              100  As stated in Section 3.2(j) of the
                                                                           applicable Allocation Agreement.
CY 2015-16............................               90               90
CY 2017...............................               80               80
CY2018................................               50               30
CY2019................................               25                0
----------------------------------------------------------------------------------------------------------------

    In addition to the requirements noted above, a CDE is not eligible 
to receive a NMTC Allocation pursuant to this NOAA if an Affiliate of 
the Applicant is a prior Allocatee and has not met the minimum QEIs 
issuance and QLICI thresholds as set forth in Table 2 for Allocatees in 
the prior allocation rounds of the NMTC Program.
    For purposes of this section of the NOAA, the CDFI Fund will only 
recognize as ``finalized'' those QEIs that have been properly reported 
in AMIS Allocation Tracking System for Qualified Equity Investments 
(AQEIs) by the deadline in Table 1. Allocatees and their Subsidiary 
Allocatees, if any, are advised to access AMIS to record each QEI that 
they issue to an investor in exchange for cash. Furthermore, the CDFI 
Fund will only recognize QLICIs that have been certified in AMIS by the 
deadline in Table 1. Instructions on recording a QEI and QLICIs in AMIS 
is available at https://www.cdfifund.gov/Pages/amisreporting.aspx. 
Applicants may be required, upon notification from the CDFI Fund, to 
submit documentation to substantiate the required QEI issuance and 
QLICI thresholds.
    Any prior Allocatee that requires any action by the CDFI Fund 
(i.e., certifying a subsidiary entity as a CDE; adding a subsidiary CDE 
to an Allocation Agreement; etc.) in order to meet the QEI issuance 
requirements above must submit a CDE Certification Application for 
Subsidiary CDEs by the deadline in Table 1 and Allocation Agreement 
amendment requests by the deadline in Table 1, in order to guarantee 
that the CDFI Fund completes all necessary approvals prior to January 
15, 2021. Applicants for Subsidiary CDE certification may obtain 
information regarding CDE certification and the CDE Certification 
Application process in AMIS on the CDFI Fund's website at https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx.
    (b) Pending determination of noncompliance or default: If an 
Applicant is a prior award recipient or Allocatee under any CDFI Fund 
program and if: (i) It has demonstrated noncompliance with a previous 
assistance or award agreement or default under a previous Allocation 
Agreement; and (ii) the entity has been given a timeframe to cure the 
noncompliance or default, the CDFI Fund will consider the Applicant's 
application under this NOAA during the time period given for the entity 
to cure the noncompliance or default, and until such time as the CDFI 
Fund makes a final determination that the entity is in noncompliance or 
default. Further, if an Affiliate of the Applicant is a prior CDFI Fund 
award recipient or Allocatee and if such entity: (i) Has demonstrated 
noncompliance with a previous assistance or award agreement or default 
under a previous Allocation Agreement; and (ii) the entity has been 
given a timeframe to cure the noncompliance or default, then the CDFI 
Fund will consider the Applicant's application under this NOAA during 
the time period given for the entity to cure the noncompliance or 
default, and until such time as the CDFI Fund makes a final 
determination that the entity is in noncompliance or default.
    (c) Noncompliance or default status: The CDFI Fund will not 
consider an application submitted by an Applicant that is a prior CDFI 
Fund award recipient or Allocatee under any CDFI Fund program if, as of 
the application deadline of this NOAA: (i) The CDFI Fund has made a 
final determination that such Applicant is noncompliant with a 
previously executed assistance or award agreement, or in default of a 
previously executed Allocation Agreement; and (ii) the CDFI Fund has 
provided written notification of such final determination to the 
Applicant; and (iii) the default occurs during the time period 
beginning 12 months prior to the application deadline and ending with 
the CY 2020 allocation award announcement. Further, the CDFI Fund will 
not consider an application submitted by an Applicant with an Affiliate 
that is a prior award recipient or Allocatee under any CDFI Fund 
Program if, as of the application deadline of this NOAA: (i) The CDFI 
Fund has made a final determination that such Affiliate is noncompliant 
with a previously executed assistance or award agreement, or in default 
of a previously executed Allocation Agreement; (ii) the CDFI Fund has 
provided written notification of such final determination to the 
Affiliate; and (iii) the default occurs during the time period 
beginning 12 months prior to the application deadline and ending with 
the CY 2020 allocation award announcement.
    (d) Contacting the CDFI Fund: Accordingly, Applicants that are 
prior award recipients and/or Allocatees under any CDFI Fund program 
are advised to comply with the requirements specified in assistance, 
allocation and/or award agreement(s). All outstanding reports and 
compliance questions should be directed to the Office of Certification, 
Compliance Monitoring and Evaluation (CCME) through a Service Request 
initiated in AMIS. Requests submitted less than 30 calendar days prior 
to the application deadline may not receive a response before the 
application deadline.
    The CDFI Fund will respond to Applicants' reporting, compliance and 
CDE certification inquiries Monday through Friday, between the hours of 
9:00 a.m. and 5:00 p.m. ET, starting the date of publication of this 
NOAA through the ``Last date to contact CDFI Fund staff'' specified in 
Table 1. Inquiries received after the ``Last date to contact the CDFI 
Fund staff'' will be responded to after the Allocation Application 
deadline.
    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, accurately responded to a question, but failed to submit a 
required written explanation, or failed to notify

[[Page 59856]]

the CDFI Fund of any changes to the information submitted between the 
date of application and the date the Allocatee executes the Allocation 
Agreement, with respect to the Assurances and Certifications. In making 
this determination, the CDFI Fund will take into consideration, among 
other factors, the materiality of the question, the substance of any 
supplemental responses provided, and whether the information in the 
Applicant's supplemental responses would have a material adverse effect 
on the Applicant, its financial condition or its ability to perform 
under an Allocation Agreement, should the Applicant receive an 
allocation.
    5. Entities that propose to transfer NMTCs to Subsidiary CDEs: Both 
for-profit and non-profit CDEs may apply for NMTC Allocation authority, 
but only a for-profit CDE is permitted to provide NMTCs to its 
investors. A non-profit Applicant wishing to apply for a NMTC 
Allocation must demonstrate, prior to entering into an Allocation 
Agreement with the CDFI Fund, that: (i) It controls one or more 
Subsidiary CDEs that are for-profit entities; and (ii) it intends to 
transfer the full amount of any NMTC Allocation it receives to said 
Subsidiary CDEs. An Applicant wishing to transfer all or a portion of 
its NMTC Allocation to a Subsidiary CDE is not required to create the 
Subsidiary prior to submitting 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 45 days after the non-profit Applicant 
receives notification from the CDFI Fund of its allocation award, as 
such Subsidiary must be certified as a CDE prior to entering into an 
Allocation Agreement with the CDFI Fund. The CDFI Fund reserves the 
right to rescind the award if a non-profit Applicant that does not 
already have a certified for-profit Subsidiary CDE fails to submit a 
CDE Certification Application for one or more for-profit Subsidiaries 
within 45 days of the date it receives notification from the CDFI Fund 
of its allocation award.
    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 and identified consultants. In such cases, the CDFI Fund 
reserves the right to limit award amounts to such entities to ensure 
that the entities do not collectively receive more than the $100 
million cap. If the CDFI Fund determines that the applications 
submitted by different government bodies in the same state are not 
distinctly dissimilar and/or operated and/or managed by distinctly 
dissimilar personnel, it will reject all such applications.
    (b) For purposes of this NOAA, the CDFI Fund will also evaluate 
whether each Applicant is operated or managed as a ``common 
enterprise'' with another Applicant in this Allocation Round using the 
following indicia, among others: (i) Whether different Applicants have 
the same individual(s), including the Authorized Representative, staff, 
board members and/or consultants, involved in day-to-day management, 
operations and/or investment responsibilities; (ii) whether the 
Applicants have business strategies and/or proposed activities that are 
so similar or so closely related that, in fact or effect, they may be 
viewed as a single entity; and/or (iii) whether the applications 
submitted by separate Applicants contain significant narrative, textual 
or other similarities such that they may, in fact or effect, be viewed 
as substantially identical applications. In such cases, the CDFI Fund 
will reject all applications received from such entities.
    (c) Furthermore, an Applicant that receives an NMTC Allocation in 
this Allocation Round (or its Subsidiary Allocatee) may not become an 
Affiliate of or member of a common enterprise (as defined above) with 
another Applicant that receives an NMTC Allocation in this Allocation 
Round (or its Subsidiary Allocatee) at any time after the submission of 
an Allocation Application under this NOAA. This prohibition, however, 
generally does not apply to entities that are commonly controlled 
solely because of common ownership by QEI investors. This requirement 
will also be a term and condition of the Allocation Agreement (see 
Section VI.B of this NOAA and additional application guidance materials 
on the CDFI Fund's website at https://www.cdfifund.gov for more 
details).
    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 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's 
AMIS.

[[Page 59857]]

Following the publication of this NOAA, the CDFI Fund will make the 
electronic Allocation Application available on its website at https://www.cdfifund.gov.
    B. Application content requirements: Detailed application content 
requirements are found in the application related to this NOAA. 
Applicants must submit all materials described in and required by the 
application by the applicable deadlines. Applicants will not be 
afforded an opportunity to provide any missing materials or 
documentation, except, if necessary and at the request of the CDFI 
Fund. Electronic applications must be submitted solely by using the 
format made available via AMIS. Additional information, including 
instructions relating to the submission of supporting information 
(e.g., the Controlling Entity's representative signature page, 
Assurances and Certifications supporting documents, investor letters, 
organizational charts), is set forth in further detail in the CY 2020 
NMTC Application--AMIS Navigation Guide for this Allocation Round. An 
application must include a valid and current Employer Identification 
Number (EIN) issued by the Internal Revenue Service (IRS) and assigned 
to the Applicant and, if applicable, its Controlling Entity. Electronic 
applications without a valid EIN are incomplete and cannot be 
transmitted to the CDFI Fund. For more information on obtaining an EIN, 
please contact the IRS at (800) 829-4933 or www.irs.gov. Do not include 
any personal Social Security Numbers as part of the application.
    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 via AMIS, the CDFI Fund's 
Award Management Information System. Applications and required 
attachments sent by mail, facsimile, or email will not be accepted. 
Submission of an electronic application will facilitate the processing 
and review of applications and the selection of Allocatees; further, it 
will assist the CDFI Fund in the implementation of electronic reporting 
requirements.
    Electronic applications must be submitted solely by using the CDFI 
Fund's website and must be sent in accordance with the submission 
instructions provided in the CY 2020 NMTC Application--AMIS Navigation 
Guide for this Allocation Rounds. AMIS will only permit the submission 
of applications in which all required questions and tables are fully 
completed. Additional information, including instructions relating to 
the submission of supporting information (e.g., the Controlling 
Entity's representative signature page, Assurances and Certifications 
supporting documents, investor letters, and organizational charts) is 
set forth in further detail in the CY 2020 NMTC Application--AMIS 
Navigation Guide for this Allocation Round.
    D. Application submission dates and times: Electronic applications 
must be received by the Allocation Application deadline in Table 1. 
Electronic applications cannot be transmitted or received after 
Allocation Application deadline in Table 1. In addition, Applicants 
must electronically submit supporting information (e.g., the 
Controlling Entity's representative signature page, investor letters, 
and organizational charts). The Controlling Entity's representative 
signature page, Assurances and Certifications supporting documents, 
investor letters, and organizational charts must be submitted on or 
before Application deadline in Table 1. For details, see the 
instructions provided in the CY 2020 NMTC Application--AMIS Navigation 
Guide for this Allocation Round on the CDFI Fund's website.
    Applications and other required documents received after this date 
and time will be rejected. Please note that the document submission 
deadlines in this NOAA and/or the Allocation Application are strictly 
enforced.
    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 determined to be eligible and 
complete, the CDFI Fund will conduct the substantive review of each 
application in two parts (Phase 1 and Phase 2) in accordance with the 
criteria and procedures generally described in this NOAA and the 
Allocation Application. In Phase 1, two reviewers will evaluate and 
score the Business Strategy and Community Outcomes sections of each 
application. An Applicant must exceed a minimum overall aggregate base 
score threshold and exceed a minimum aggregate section score threshold 
in each scored section in order to advance from the Phase 1 to the 
Phase 2 part of the substantive review process. In Phase 2, the CDFI 
Fund will rank Applicants and determine the dollar amount of allocation 
authority awarded in accordance with the procedures set forth below.
    B. Criteria:
    1. Business Strategy (25-point maximum):
    (a) When assessing an Applicant's business strategy, reviewers will 
consider, among other things: The Applicant's products, services and 
investment criteria; a pipeline of potential business loans or 
investments consistent with an Applicant's request for an NMTC 
Allocation; the prior performance of the Applicant or its Controlling 
Entity, particularly as it 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 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

[[Page 59858]]

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 Allocation 
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 additional points to any Applicant that has a 
record of having successfully provided capital or technical assistance 
to disadvantaged businesses or communities. Second, the CDFI Fund will 
give five additional points to any Applicant that intends to satisfy 
the requirement of IRC 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 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 include an Applicant's 
priority points when ranking Applicants during Phase 2 of the review 
process, as described below.
    2. Community Outcomes (25-point maximum): In assessing the 
potential benefits to Low-Income Communities that may result from the 
Applicant's proposed investments, reviewers will consider, among other 
things, the degree to which the Applicant is likely to: (i) Achieve 
significant and measurable community development outcomes in its Low-
Income Communities; (ii) invest in particularly economically distressed 
markets including areas identified in the Allocation Application such 
as Federally designated Opportunity Zones; (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; and (g) it is likely to engage in activities that 
will spur additional private capital investment.
    C. Phase 2 Evaluation:
    1. Application Ranking and Anomaly Reviews: Using the numeric 
scores from Phase 1, Applicants are ranked on the basis of each 
Applicant's combined scores in the Business Strategy and Community 
Outcomes sections of the application plus one half of the priority 
points. If, in the case of a particular application, a reviewer's total 
base score or section score(s) (in one or more of the two application 
scored sections) varies significantly from the other reviewer's total 
base scores or section scores for such application, the CDFI Fund may, 
in its sole discretion, obtain the evaluation and numeric scoring of an 
additional third reviewer to determine whether the anomalous score 
should be replaced with the score of the additional third reviewer.
    2. Late Reports: In the case of an Applicant or any Affiliates that 
have previously received an award or NMTC Allocation from the CDFI Fund 
through any CDFI Fund program, the CDFI Fund will deduct points up to 
five points from the Applicant's final rank score for the Applicant's 
(or its Affiliate's) failure to meet any of the reporting deadlines set 
forth in any assistance, award or Allocation Agreement(s), if the 
reporting deadlines occurred during the period from October 29, 2019 to 
the application deadline in this NOAA.
    3. Prior Year Allocatees: In the case of Applicants (or their 
Affiliates) that are prior year Allocatees, the CDFI Fund will review 
the activities of the prior year Allocatee to determine whether the 
entity has: (a) Effectively utilized its prior-year NMTC Allocations in 
a manner generally consistent with the representations made in the 
relevant Allocation Application (including, but not limited to, the 
proposed product offerings, QALICB type, fees and markets served); (b) 
issued QEIs and closed QLICIs in a timely manner; and (c) substantiated 
a need for additional NMTC Allocation authority. The CDFI Fund will use 
this information in determining whether to reject or reduce the 
allocation award amount of its NMTC Allocation Application.
    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's, if applicable): Principals; board members; 
management team; and other essential staff or contractors, with 
specific focus on: Experience in providing loans; equity investments or 
financial counseling and other services, including activities similar 
to those described in the Applicant's business strategy; asset 
management and risk management experience; experience with fulfilling 
compliance requirements of other governmental programs, including other 
tax credit programs; and the Applicant's (or its Controlling Entity's) 
financial health. CDFI Fund evaluators will also consider the extent to 
which an Applicant has protocols in place to ensure ongoing compliance 
with NMTC Program requirements and the Applicant's projected income and

[[Page 59859]]

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, has its most recent 
Community Reinvestment Act (CRA) rating as ``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 NMTC 
Allocations, or, if a prior Allocatee, the track record of the 
Applicant or its Affiliates in raising Qualified Equity Investments in 
the past five years; the Applicant's strategy for identifying 
additional investors, if necessary, including the Applicant's (or its 
Controlling Entity's) prior performance with raising equity from 
investors, particularly for-profit investors; the distribution of the 
economic benefits of the tax credit; and the extent to which the 
Applicant intends to invest the proceeds from the aggregate amount of 
its QEIs at a level that exceeds the requirements of IRC 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 and; (c) it generally demonstrates that the economic 
benefits of the tax credit will be passed through to a QALICB; and (d) 
it intends to invest the proceeds from the aggregate amount of its QEIs 
at a level that exceeds the requirements of IRC 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.
    6. Contacting Applicants: As a part of the substantive review 
process, the CDFI Fund may permit the NMTC Allocation recommendation 
panel member(s) to request information from Applicants for the sole 
purpose of obtaining, clarifying or confirming application information 
or omission of information. In no event shall such contact be construed 
to permit an Applicant to change any element of its application. At 
this point in the process, an Applicant may be required to submit 
additional information about its application in order to assist the 
CDFI Fund with its final evaluation process. If the Applicant (or the 
Controlling Entity or any Affiliate) has previously been awarded an 
NMTC Allocation, the CDFI Fund may also request information on the use 
of those NMTC Allocations, to the extent that this information has not 
already been reported to the CDFI Fund. Such requests must be responded 
to within the time parameters set by the CDFI Fund. The selecting 
official(s) will make a final allocation determination based on an 
Applicant's file, including, without limitation, eligibility under IRC 
Sec.  45D, the reviewers' scores and the amount of NMTC Allocation 
authority available.
    7. Award Decisions: The CDFI Fund will award allocations in 
descending order of the final rank score, subject to Applicants meeting 
all other eligibility requirements; provided, however, that the CDFI 
Fund, in its sole discretion, reserves the right to reject an 
application and/or adjust award amounts as appropriate based on 
information obtained during the review process.
    D. Allocations serving non-metropolitan counties: As provided for 
under Section 102(b) of the Tax Relief and Health Care Act of 2006 
(Pub. L. 109-432), the CDFI Fund shall ensure that Non-Metropolitan 
counties receive a proportional allocation of QEIs under the NMTC 
Program. The CDFI Fund will endeavor to ensure that 20 percent of the 
QLICIs to be made using QEI proceeds are invested in Non-Metropolitan 
counties. In addition, the CDFI Fund will ensure that the proportion of 
Allocatees that are Rural CDEs is, at a minimum, equal to the 
proportion of Applicants in the highly qualified pool that are Rural 
CDEs. A Rural CDE is one that has a track record of at least three 
years of direct financing experience, has dedicated at least 50 percent 
of its direct financing dollars to Non-Metropolitan counties over the 
past five years, and has committed that at least 50 percent of its NMTC 
financing dollars with this NMTC Allocation will be deployed in such 
areas. Non-Metropolitan counties are counties not contained within a 
Metropolitan Statistical Area, as such term is defined 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 descending order of their final rank 
score, until the appropriate percentage balance is achieved. In order 
to accommodate the additional Rural CDEs in the Allocatee pool within 
the available NMTC Allocation limitations, a formula reduction may be 
applied as uniformly as possible to the allocation amount for all 
Allocatees in the pool that have not committed to investing a minimum 
of 20 percent of their QLICIs in Non-Metropolitan counties.
    The CDFI Fund will then determine whether the pool of Allocatees 
will, in the aggregate, invest at least 20 percent of their QLICIs (as 
measured by dollar amount) in Non-Metropolitan counties. The CDFI Fund 
will first apply the ``minimum'' percentage of QLICIs that Allocatees 
indicated in their

[[Page 59860]]

applications would be targeted to Non-Metropolitan areas to the total 
NMTC Allocation award amount of each Allocatee (less whatever 
percentage the Allocatee indicated would be retained for non-QLICI 
activities), and total these figures for all Allocatees. If this 
aggregate total is greater than or equal to 20 percent of the QLICIs to 
be made by the Allocatees, then the pool is considered balanced and the 
CDFI Fund will proceed with the NMTC Allocation process. However, if 
the aggregate total is less than 20 percent of the QLICIs to be made by 
the Allocatees, the CDFI Fund will consider requiring any or all of the 
Allocatees to direct up to the ``maximum'' percentage of QLICIs that 
the Allocatees indicated would be targeted to Non-Metropolitan 
counties, taking into consideration their track record and ability to 
deploy dollars in Non-Metropolitan counties. If the CDFI Fund cannot 
meet the goal of 20 percent of QLICIs in Non-Metropolitan counties by 
requiring any or all Allocatees to commit up to the maximum percentage 
of QLICIs that they indicated would be targeted to Non-Metropolitan 
counties, the CDFI Fund may add additional highly qualified Rural CDEs 
(in descending order of final rank score) to the Allocatee pool. In 
order to accommodate any additional Allocatees within the allocation 
limitations, a formula reduction will be applied as uniformly as 
possible, to the allocation amount for all Allocatees in the pool that 
have not committed to investing a minimum of 20 percent of their QLICIs 
in Non-Metropolitan counties.
    E. Right of rejection: The CDFI Fund reserves the right to reject 
any NMTC Allocation Application in the case of a prior CDFI Fund award 
recipient, if such Applicant has failed to comply with the terms, 
conditions, and other requirements of the prior or existing assistance 
or award agreement(s) with the CDFI Fund. 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 NMTC Allocation(s) or 
such Applicant has been found by the IRS to have engaged in a 
transaction or series of transactions designed to achieve a result that 
is inconsistent with the purposes of IRC 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 (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 NMTC Allocation(s) or 
has been found by the IRS to have engaged in a transaction or series of 
transactions designed to achieve a result that is inconsistent with the 
purposes of IRC Sec.  45D.
    The CDFI Fund reserves the right to reject an NMTC Allocation 
Application if information (including, but not limited to, 
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, its Affiliate(s), or the 
Controlling Entity, if such fraud or mismanagement by the Affiliate(s) 
or Controlling Entity would hinder the Applicant's ability to perform 
under the Allocation Agreement. If the CDFI Fund determines that any 
portion of the application is incorrect in any material respect, the 
CDFI Fund reserves the right, in its sole discretion, to reject the 
application.
    The CDFI Fund reserves the right to reject any NMTC Allocation 
Application if additional information is obtained that, after further 
due diligence and in the discretion of the CDFI Fund, would hinder the 
Applicant's ability to effectively perform under the Allocation 
Agreement. In the case of Applicants (or the Controlling Entity, or 
Affiliates) that are regulated or receive oversight by the Federal 
government or a state agency (or comparable entity), the CDFI Fund may 
request additional information from the Applicant regarding Assurances 
and Certifications or other information about the ability of the 
Applicant to effectively perform under the Allocation Agreement. The 
NMTC Allocation recommendation panel or selecting official(s) 
reserve(s) the right to consult with and take into consideration the 
views of the appropriate Federal banking and other regulatory agencies. 
In the case of Applicants (or Affiliates of Applicants) that are also 
Small Business Investment Companies, Specialized Small Business 
Investment Companies or New Markets Venture Capital Companies, the CDFI 
Fund reserves the right to consult with and take into consideration the 
views of the Small Business Administration. An Applicant that is or is 
affiliated with an insured depository institution will not be awarded 
an NMTC Allocation if it has a composite rating of ``5'' on its most 
recent examination, performed in accordance with the Uniform Financial 
Institutions Rating System.
    Furthermore, the CDFI Fund will not award an NMTC Allocation to an 
Applicant that is an insured depository institution or is an Affiliate 
of an insured depository institution, if during the time period 
beginning with the application deadline and ending with the execution 
of the CY 2020 Allocation Agreement; the Applicant received any of the 
following:
    1. CRA assessment rating of below ``Satisfactory'' on its most 
recent examination;
    2. A going concern opinion on its most recent audit; or
    3. A Prompt Corrective Action directive from its regulator.
    The CDFI Fund reserves the right to conduct additional due 
diligence on all Applicants, as determined reasonable and appropriate 
by the CDFI Fund, in its sole discretion, related to the Applicant, 
Affiliates, the Applicant's Controlling Entity and the officers, 
directors, owners, partners and key employees of each. This includes 
the right to consult with the IRS if the Applicant (or the Controlling 
Entity, or Affiliates) has previously been awarded an NMTC Allocation.
    F. Allocation Announcement: Each Applicant will be informed of the 
CDFI Fund's award decision through an electronic notification whether 
selected for an allocation or not selected for an allocation, which may 
be for reasons of application incompleteness, ineligibility, or 
substantive issues. Eligible Applicants that are not selected for an 
allocation based on substantive issues will likely be given the 
opportunity to receive feedback on their

[[Page 59861]]

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.
    The CDFI Fund reserves the right, in its sole discretion, to 
rescind an allocation made under this NOAA, should an Allocatee be 
identified as ineligible due to pending or delinquent debt to the 
Federal government in the Do Not Pay database.
    There is no right to appeal the CDFI Fund's NMTC Allocation 
decisions. The CDFI Fund's NMTC Allocation decisions are final.

VI. Award Administration Information

    A. Allocation Award Compliance
    1. Failure to meet reporting requirements: If an Allocatee, or an 
Affiliate of an Allocatee, is a prior CDFI Fund award recipient or 
Allocatee under any CDFI Fund program and is not current on the 
reporting requirements set forth in the previously executed assistance, 
allocation, or award agreement(s) as of the date the CDFI Fund provides 
notification of an NMTC Allocation award or thereafter, the CDFI Fund 
reserves the right, in its sole discretion, to reject the application, 
delay entering into an Allocation Agreement, and/or impose limitations 
on an Allocatee's ability to issue QEIs to investors until said prior 
award recipient or Allocatee is current on the reporting requirements 
in the previously executed assistance, allocation, or award 
agreement(s). Please note that the automated systems the CDFI Fund uses 
for receipt of reports submitted electronically typically acknowledges 
only a report's receipt; such an acknowledgment does not warrant that 
the report received was complete and therefore met reporting 
requirements.
    2. Pending determination of noncompliance or default: If an 
Allocatee is a prior award recipient or Allocatee under any CDFI Fund 
program and if: (i) It has demonstrated noncompliance with a previous 
assistance or award agreement or a default under an Allocation 
Agreement; and (ii) the entity has been given a timeframe to cure the 
noncompliance or default the CDFI Fund reserves the right, in its sole 
discretion, to delay entering into an Allocation Agreement and/or to 
impose limitations on the Allocatee's ability to issue QEIs to 
investors, during the time period given for the entity to cure the 
noncompliance or default and until such time as the CDFI Fund makes a 
final determination that the entity is in noncompliance or default, and 
determination of remedies, if applicable, in the sole determination of 
the CDFI Fund. Further, if an Affiliate of an Allocatee is a prior CDFI 
Fund award recipient or Allocatee and if such entity: (i) Has 
demonstrated noncompliance under a previous assistance or award 
agreement or default under a previous Allocation Agreement; and (ii) 
the entity has been given a timeframe to cure the noncompliance or 
default, the CDFI Fund reserves the right, in its sole discretion, to 
delay entering into an Allocation Agreement and/or to impose 
limitations on the Allocatee's ability to issue QEIs to investors, 
during the time period given for the entity to cure the noncompliance 
or default and until such time as the CDFI Fund makes a final 
determination that the entity is in noncompliance or default, and 
determination of remedies, if applicable, in the sole determination of 
the CDFI Fund. If the prior award recipient or Allocatee in question is 
unable to satisfactorily resolve the issues of noncompliance or 
default, in the sole determination of the CDFI Fund, the CDFI Fund 
reserves the right, in its sole discretion, to terminate and rescind 
the award notification made under this NOAA.
    3. Determination of noncompliance or default status: If prior to 
entering into an Allocation Agreement through this NOAA, the CDFI Fund 
has made a final determination that an Allocatee that is a prior CDFI 
Fund award recipient or Allocatee under any CDFI Fund program is (i) 
noncompliant with a previously executed assistance or award agreement, 
or is in default of a previously executed Allocation Agreement; (ii) 
the CDFI Fund has provided written notification of such determination 
to such organization; and (iii) the noncompliance or default occurs 
during the time period beginning 12 months prior to the application 
deadline and ending with the execution of the CY 2020 Allocation 
Agreement, the CDFI Fund reserves the right, in its sole discretion, to 
delay entering into an Allocation Agreement and/or to impose 
limitations on the Allocatee's ability to issue QEIs to investors, or 
to terminate and rescind the NMTC Allocation made under this NOAA.
    Furthermore, if prior to entering into an Allocation Agreement 
through this NOAA: (i) The CDFI Fund has made a final determination 
that an Affiliate of an Allocatee that is a prior CDFI Fund award 
recipient or Allocatee under any CDFI Fund programs is in noncompliance 
of a previously executed assistance or award agreement or in default of 
a previously executed Allocation 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 12 months prior to the application deadline and ending with 
the execution of the CY 2020 Allocation Agreement, the CDFI Fund 
reserves the right, in its sole discretion, to delay entering into an 
Allocation Agreement and/or to impose limitations on the Allocatee's 
ability to issue QEIs to investors, or to terminate and rescind the 
NMTC Allocation made under this NOAA.
    B. Allocation Agreement: Each Allocatee (including their Subsidiary 
Allocatees) must enter into an Allocation Agreement with the CDFI Fund. 
The Allocation Agreement will set forth certain required terms and 
conditions of the NMTC Allocation which may include, but are not 
limited to, the following: (i) The amount of the awarded NMTC 
Allocation; (ii) the approved uses of the awarded NMTC Allocation 
(e.g., loans to or equity investments in QALICBs, loans to or equity 
investments in other CDEs); (iii) the approved service area(s) in which 
the proceeds of QEIs may be used, including the dollar amount of QLICIs 
that must be invested in Non-Metropolitan counties; (iv) commitments to 
specific ``innovative activities'' discussed by the Allocatee in its 
Allocation Application; (v) the time period by which the Allocatee may 
obtain QEIs from investors; (vi) reporting requirements for the 
Allocatee; and (vii) a requirement to maintain certification as a CDE 
throughout the term of the Allocation Agreement. If an Allocatee 
represented in its NMTC Allocation Application that it intends to 
invest substantially all of the proceeds from its investors in 
businesses in which persons unrelated to the Allocatee hold a majority 
equity interest, the Allocation Agreement will contain a covenant to 
that effect. In addition to entering into an Allocation Agreement, each 
Allocatee must furnish to the CDFI Fund an opinion from its legal 
counsel or a similar certification, the content of which will be 
further specified in the Allocation Agreement, to include, among other 
matters, an opinion that an Allocatee (and its Subsidiary Allocatees, 
if any): (i) Is duly formed and in good standing in the jurisdiction in 
which it was formed and the jurisdiction(s) in which it operates;

[[Page 59862]]

(ii) has the authority to enter into the Allocation Agreement and 
undertake the activities that are specified therein; (iii) has no 
pending or threatened litigation that would materially affect its 
ability to enter into and carry out the activities specified in the 
Allocation Agreement; and (iv) is not in default of its articles of 
incorporation, bylaws or other organizational documents, or any 
agreements with the Federal government.
    If an Allocatee identifies Subsidiary Allocatees, the CDFI Fund 
reserves the right to require an Allocatee to provide supporting 
documentation evidencing that it Controls such entities prior to 
entering into an Allocation Agreement with the Allocatee and its 
Subsidiary Allocatees. The CDFI Fund reserves the right, in its sole 
discretion, to rescind its NMTC Allocation award if the Allocatee fails 
to return the Allocation Agreement, signed by the authorized 
representative of the Allocatee, and/or provide the CDFI Fund with any 
other requested documentation, including an approved legal opinion, 
within the deadlines set by the CDFI Fund.
    C. Fees: The CDFI Fund reserves the right, in accordance with 
applicable Federal law and, if authorized, to charge allocation 
reservation and/or compliance monitoring fees to all entities receiving 
NMTC Allocations. Prior to imposing any such fee, the CDFI Fund will 
publish additional information concerning the nature and amount of the 
fee.
    D. Reporting: The CDFI Fund will collect information, on at least 
an annual basis from all Allocatees and/or CDEs that are recipients of 
QLICIs, including such audited financial statements and opinions of 
counsel as the CDFI Fund deems necessary or desirable, in its sole 
discretion. The CDFI Fund will require the Allocatee to retain 
information as the CDFI Fund deems necessary or desirable and shall 
provide such information to the CDFI Fund when requested to monitor 
each Allocatee's compliance with the provisions of its Allocation 
Agreement and to assess the impact of the NMTC Program in Low-Income 
Communities. The CDFI Fund may also provide such information to the IRS 
in a manner consistent with IRC 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 Mondays through Fridays, 
between the hours of 9:00 a.m. and 5:00 p.m. ET through the last day to 
contact the CDFI Fund. The CDFI Fund will not respond to phone calls or 
emails concerning the application that are received after the last day 
to contact the CDFI Fund. The CDFI Fund will respond to such phone 
calls or emails after the Allocation Application deadline in Table 1. 
Applications and other information regarding the CDFI Fund and its 
programs may be obtained from the CDFI Fund's website at https://www.cdfifund.gov. The CDFI Fund will post on its website responses to 
questions of general applicability regarding the NMTC Program.
    A. Information technology support: Technical support can be 
obtained by calling (202) 653-0422 or by submitting a Service Request 
in AMIS. People who have visual or mobility impairments that prevent 
them from accessing the Low-Income Community maps using the CDFI Fund's 
website should call (202) 653-0422 for assistance. These are not toll 
free numbers.
    B. Programmatic support: If you have any questions about the 
programmatic requirements of this NOAA, contact the CDFI Fund's NMTC 
Program Manager by submitting a Service Request in AMIS; or by 
telephone at (202) 653-0421. These are not toll free numbers.
    C. Administrative support: If you have any questions regarding the 
administrative requirements of this NOAA, contact the CDFI Fund's NMTC 
Program Manager by submitting a Service Request in AMIS, or by 
telephone at (202) 653-0421. These are not toll free numbers.
    D. IRS support: For questions regarding the tax aspects of the NMTC 
Program, contact 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 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.

Jodie L. Harris,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2020-20931 Filed 9-22-20; 8:45 am]
BILLING CODE 4810-70-P