Statutorily Mandated Designation of Difficult Development Areas and Qualified Census Tracts: Revision of Effective Date for 2019 and 2020 Designations, 35311-35314 [2021-14235]
Download as PDF
<![CDATA[
Federal Register / Vol. 86, No. 125 / Friday, July 2, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1
which a mortgagor seeks mortgage
insurance under the Act.’’
FHA Catalyst allows FHA-approved
multifamily lenders to submit electronic
applications for FHA multifamily
mortgage insurance and related
documents to HUD through a web-based
portal, and HUD staff are able to receive
and download the documents from the
portal. The system is designed to
streamline existing processes for
collecting information to administer
FHA multifamily mortgage insurance
programs; no new information will be
collected as a result of FHA Catalyst.
Prior to the COVID–19 pandemic,
multifamily lenders submitted
applications to HUD in USB and hard
copy format via mail. Due to the
pandemic, multifamily lenders are
currently submitting electronic
applications using various online filesharing platforms (e.g., Dropbox) as a
short-term solution. FHA Catalyst
provides multifamily lenders and MFH
with a central, secure portal and longterm solution for online application
submissions that will be used for the
duration of the COVID–19 pandemic
and beyond. Hard copies and/or
removable USB drives will no longer be
required for applications submitted
through FHA Catalyst once FHA
Catalyst becomes mandatory.
Respondents (i.e., affected public):
Business or other for-profit; individuals
or households; not-for-profit intuitions;
state, local, or tribal government.
Estimated Number of Respondents:
741.
Estimated Number of Responses: 741.
Frequency of Response: 1.
Average Hours per Response: 1.
Total Estimated Burden: 741.
B. Solicitation of Public Comment
This notice is soliciting comments
from members of the public and affected
parties concerning the collection of
information described in Section A on
the following:
(1) Whether the proposed collection
of information is necessary for the
proper performance of the functions of
the agency, including whether the
information will have practical utility;
(2) The accuracy of the agency’s
estimate of the burden of the proposed
collection of information;
(3) Ways to enhance the quality,
utility, and clarity of the information to
be collected; and
(4) Ways to minimize the burden of
the collection of information on those
who are to respond; including through
the use of appropriate automated
collection techniques or other forms of
information technology, e.g., permitting
electronic submission of responses.
VerDate Sep<11>2014
17:12 Jul 01, 2021
Jkt 253001
35311
HUD encourages interested parties to
submit comment in response to these
questions.
numbers.) Additional copies of this
notice are available through HUD User
at (800) 245–2691 for a small fee to
cover duplication and mailing costs.
C. Authority
Copies Available Electronically: This
Section 3507 of the Paperwork
notice and additional information about
Reduction Act of 1995, 44 U.S.C. 3507.
DDAs and QCTs are available
electronically on the internet at https://
Janet M. Golrick,
www.huduser.org/datasets/qct.html.
Acting, Chief of Staff for the Office of Housing,
SUPPLEMENTARY
INFORMATION:
Federal Housing Administration.
[FR Doc. 2021–14146 Filed 7–1–21; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–6275–N–01]
Statutorily Mandated Designation of
Difficult Development Areas and
Qualified Census Tracts: Revision of
Effective Date for 2019 and 2020
Designations
Office of the Assistant
Secretary for Policy Development and
Research, HUD.
ACTION: Notice.
AGENCY:
This document revises the
effective date for designations of
‘‘Difficult Development Areas’’ (DDAs)
and ‘‘Qualified Census Tracts’’ (QCTs)
for purposes of the Low-Income
Housing Tax Credit (LIHTC) under
Internal Revenue Code (IRC) Section 42
(26 U.S.C. 42) published on October 22,
2018, (83 FR 53282) and September 25,
2019, (84 FR 50465) in response to the
Presidentially-declared COVID–19
emergency. This notice extends from
730 days to 910 days the period for
which the 2019 and 2020 lists of QCTs
and DDAs are effective for projects (1)
located in an area not on subsequent
lists of DDAs or QCTs; and (2) that
submitted applications while the area
was a 2019 or 2020 QCT or DDA.
FOR FURTHER INFORMATION CONTACT: For
questions on how areas are designated
and on geographic definitions, contact
Michael K. Hollar, Senior Economist,
Economic Development and Public
Finance Division, Office of Policy
Development and Research, Department
of Housing and Urban Development,
451 Seventh Street SW, Room 8234,
Washington, DC 20410–6000; telephone
number (202) 402–5878, or send an
email to Michael.K.Hollar@hud.gov. For
specific legal questions, contact Branch
5, Office of the Associate Chief Counsel,
Passthroughs and Special Industries,
Internal Revenue Service, 1111
Constitution Avenue NW, Washington,
DC 20224; telephone number (202) 317–
4137, fax number (855) 591–7867.
(These are not toll-free telephone
SUMMARY:
PO 00000
Frm 00053
Fmt 4703
Sfmt 4703
Background
On March 13, 2020, the President
issued major disaster declarations under
the authority of the Stafford Act with
respect to all 50 States, the District of
Columbia, and 5 territories (American
Samoa, Guam, Puerto Rico, Northern
Mariana Islands, and the U.S. Virgin
Islands) to assist with additional needs
identified under the nationwide
emergency declaration for COVID–19. In
the context of a Presidentially-declared
Major Disaster, IRS Revenue Procedure
2014–49, 2014–37 I.R.B. 535, provides
temporary relief to housing finance
agencies (HFAs) and owners from
certain requirements of IRC Section 42.
Among the relief provided, if an owner
has a carryover allocation for a building
located in a Major Disaster Area and the
Major Disaster occurs on or after the
date of the carryover allocation, an HFA
may grant an extension to the placed-inservice requirement. Rev. Proc. 2014–
49, Section 6.03. This extension applies
only to properties receiving IRC Section
42 allocated credits and does not apply
or provide relief to properties receiving
credits associated with IRC Section 142
tax-exempt bond revenue. HUD is
revising the effective date of the 2019
and 2020 QCTs and DDAs at this time
to aid the ability of areas affected by
COVID–19 to place in service affordable
housing under both Section 42 and
Section 142.
I. This Notice
This notice extends from 730 days to
910 days the period for which the 2019
and 2020 lists of QCTs and DDAs are
effective for projects that are not located
in areas on subsequent lists of DDAs or
QCTs but submitted applications while
the area was a 2019 or 2020 QCT or
DDA. HUD published lists of DDAs and
QCTs for 2019 on October 22, 2018 (83
FR 53282); for 2020 on September 25,
2019 (84 FR 50465); and for 2021 on
September 24, 2020 (85 FR 60255). The
actual designations of 2019 and 2020
QCTs and DDAs are not affected by this
notice. HUD is revising the effective
date of the 2019 and 2020 QCTs and
DDAs at this time to aid the ability of
areas affected by COVID–19 to place in
service affordable housing.
E:\FR\FM\02JYN1.SGM
02JYN1
35312
Federal Register / Vol. 86, No. 125 / Friday, July 2, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1
II. Extension of 2019 DDA and QCT
Designations
For LIHTC and bond-financed
projects, the sections entitled ‘‘Effective
Date’’ and ‘‘Interpretive Examples of
Effective Date’’ of the 2019 DDA and
QCT designations as published October
22, 2018 (83 FR 53282) are hereby
revised to read as follows:
Effective Date
The 2019 lists of QCTs and DDAs are
effective:
(1) For allocations of credit after
December 31, 2018; or
(2) for purposes of IRC section
42(h)(4), if the bonds are issued and the
building is placed in service after
December 31, 2018.
If an area is not on a subsequent list
of DDAs, the 2019 lists are effective for
the area if:
(1) The allocation of credit to an
applicant is made no later than the end
of the 910-day period after the applicant
submits a complete application to the
LIHTC-allocating agency, and the
submission is made before the effective
date of the subsequent lists; or
(2) for purposes of IRC section
42(h)(4), if:
(a) The bonds are issued or the
building is placed in service no later
than the end of the 910-day period after
the applicant submits a complete
application to the bond-issuing agency,
and
(b) the submission is made before the
effective date of the subsequent lists,
provided that both the issuance of the
bonds and the placement in service of
the building occur after the application
is submitted.
An application is deemed to be
submitted on the date it is filed if the
application is determined to be
complete by the credit-allocating or
bond-issuing agency. A ‘‘complete
application’’ means that no more than
de minimis clarification of the
application is required for the agency to
make a decision about the allocation of
tax credits or issuance of bonds
requested in the application.
In the case of a ‘‘multiphase project,’’
the DDA or QCT status of the site of the
project that applies for all phases of the
project is that which applied when the
project received its first allocation of
LIHTC. For purposes of IRC section
42(h)(4), the DDA or QCT status of the
site of the project that applies for all
phases of the project is that which
applied when the first of the following
occurred: (a) The building(s) in the first
phase were placed in service, or (b) the
bonds were issued.
For purposes of this notice, a
‘‘multiphase project’’ is defined as a set
VerDate Sep<11>2014
17:12 Jul 01, 2021
Jkt 253001
of buildings to be constructed or
rehabilitated under the rules of the
LIHTC and meeting the following
criteria:
(1) The multiphase composition of the
project (i.e., total number of buildings
and phases in project, with a
description of how many buildings are
to be built in each phase and when each
phase is to be completed, and any other
information required by the agency) is
made known by the applicant in the
first application of credit for any
building in the project, and that
applicant identifies the buildings in the
project for which credit is (or will be)
sought;
(2) The aggregate amount of LIHTC
applied for on behalf of, or that would
eventually be allocated to, the buildings
on the site exceeds the one-year
limitation on credits per applicant, as
defined in the Qualified Allocation Plan
(QAP) of the LIHTC-allocating agency,
or the annual per-capita credit authority
of the LIHTC allocating agency, and is
the reason the applicant must request
multiple allocations over two or more
years; and
(3) All applications for LIHTC for
buildings on the site are made in
immediately consecutive years.
Members of the public are hereby
reminded that the Secretary of Housing
and Urban Development, or the
Secretary’s designee, has legal authority
to designate DDAs and QCTs, in
accordance with 26 U.S.C. 42(d)(5), by
publishing lists of geographic entities as
defined by, in the case of DDAs, the
Census Bureau, the several states and
the governments of the insular areas of
the United States and, in the case of
QCTs, by the Census Bureau; and to
establish the effective dates of such lists.
The Secretary of the Treasury, through
the IRS thereof, has sole legal authority
to interpret, and to determine and
enforce compliance with the IRC and
associated regulations, including
Federal Register notices published by
HUD for purposes of designating DDAs
and QCTs. Representations made by any
other entity as to the content of HUD
notices designating DDAs and QCTs that
do not precisely match the language
published by HUD should not be relied
upon by taxpayers in determining what
actions are necessary to comply with
HUD notices.
Interpretive Examples of Effective Date
For the convenience of readers of this
notice, interpretive examples are
provided below to illustrate the
consequences of the effective date in
areas that gain or lose DDA status. The
examples covering DDAs are equally
applicable to QCT designations.
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
(Case A) Project A is located in a 2019
DDA that is NOT a designated DDA in
2020, 2021, or 2022. A complete
application for tax credits for Project A
is filed with the allocating agency on
November 15, 2019. Credits are
allocated to Project A on January 30,
2022. Project A is eligible for the
increase in basis accorded a project in
a 2019 DDA because the application was
filed BEFORE January 1, 2020 (the
effective date for the 2020 DDA lists),
and because tax credits were allocated
no later than the end of the 910-day
period after the filing of the complete
application for an allocation of tax
credits.
(Case B) Project B is located in a 2019
DDA that is NOT a designated DDA in
2020, 2021, or 2022. A complete
application for tax credits for Project B
is filed with the allocating agency on
December 1, 2019. Credits are allocated
to Project B on June 30, 2022. Project B
is NOT eligible for the increase in basis
accorded a project in a 2019 DDA
because, although the application for an
allocation of tax credits was filed
BEFORE January 1, 2020 (the effective
date of the 2020 DDA lists), the tax
credits were allocated later than the end
of the 910-day period after the filing of
the complete application.
(Case C) Project C is located in a 2019
DDA that was not a DDA in 2018.
Project C was placed in service on
November 15, 2018. A complete
application for tax-exempt bond
financing for Project C is filed with the
bond-issuing agency on January 15,
2019. The bonds that will support the
permanent financing of Project C are
issued on September 30, 2019. Project C
is NOT eligible for the increase in basis
otherwise accorded a project in a 2019
DDA, because the project was placed in
service BEFORE January 1, 2019.
(Case D) Project D is located in an
area that is a DDA in 2019, but is NOT
a DDA in 2020, 2021, or 2022. A
complete application for tax-exempt
bond financing for Project D is filed
with the bond-issuing agency on
October 30, 2019. Bonds are issued for
Project D on January 30, 2022, but
Project D is not placed in service until
July 30, 2022. Project D is eligible for
the increase in basis available to
projects located in 2019 DDAs because:
(1) One of the two events necessary for
triggering the effective date for buildings
described in Section 42(h)(4)(B) of the
IRC (the two events being bonds issued
and buildings placed in service) took
place on January 30, 2022, within the
910-day period after a complete
application for tax-exempt bond
financing was filed, (2) the application
was filed during a time when the
E:\FR\FM\02JYN1.SGM
02JYN1
Federal Register / Vol. 86, No. 125 / Friday, July 2, 2021 / Notices
location of Project D was in a DDA, and
(3) both the issuance of the bonds and
placement in service of Project D
occurred after the application was
submitted.
lotter on DSK11XQN23PROD with NOTICES1
Extension of 2020 DDA and QCT
Designations
For LIHTC and bond-financed
projects, the sections entitled ‘‘Effective
Date’’ and ‘‘Interpretive Examples of
Effective Date’’ of the 2020 DDA and
QCT designations as published
September 25, 2019 (84 FR 50465) are
hereby revised to read as follows:
Effective Date
The 2020 lists of QCTs and DDAs are
effective:
(1) For allocations of credit after
December 31, 2019; or
(2) for purposes of IRC section
42(h)(4), if the bonds are issued and the
building is placed in service after
December 31, 2019.
If an area is not on a subsequent list
of DDAs, the 2020 lists are effective for
the area if:
(1) The allocation of credit to an
applicant is made no later than the end
of the 910-day period after the applicant
submits a complete application to the
LIHTC-allocating agency, and the
submission is made before the effective
date of the subsequent lists; or
(2) for purposes of IRC section
42(h)(4), if:
(a) The bonds are issued or the
building is placed in service no later
than the end of the 910-day period after
the applicant submits a complete
application to the bond-issuing agency,
and
(b) the submission is made before the
effective date of the subsequent lists,
provided that both the issuance of the
bonds and the placement in service of
the building occur after the application
is submitted.
An application is deemed to be
submitted on the date it is filed if the
application is determined to be
complete by the credit-allocating or
bond-issuing agency. A ‘‘complete
application’’ means that no more than
de minimis clarification of the
application is required for the agency to
make a decision about the allocation of
tax credits or issuance of bonds
requested in the application.
In the case of a ‘‘multiphase project,’’
the DDA or QCT status of the site of the
project that applies for all phases of the
project is that which applied when the
project received its first allocation of
LIHTC. For purposes of IRC section
42(h)(4), the DDA or QCT status of the
site of the project that applies for all
phases of the project is that which
VerDate Sep<11>2014
17:12 Jul 01, 2021
Jkt 253001
applied when the first of the following
occurred: (a) The building(s) in the first
phase were placed in service, or (b) the
bonds were issued.
For purposes of this notice, a
‘‘multiphase project’’ is defined as a set
of buildings to be constructed or
rehabilitated under the rules of the
LIHTC and meeting the following
criteria:
(1) The multiphase composition of the
project (i.e., total number of buildings
and phases in project, with a
description of how many buildings are
to be built in each phase and when each
phase is to be completed, and any other
information required by the agency) is
made known by the applicant in the
first application of credit for any
building in the project, and that
applicant identifies the buildings in the
project for which credit is (or will be)
sought;
(2) The aggregate amount of LIHTC
applied for on behalf of, or that would
eventually be allocated to, the buildings
on the site exceeds the one-year
limitation on credits per applicant, as
defined in the Qualified Allocation Plan
(QAP) of the LIHTC-allocating agency,
or the annual per-capita credit authority
of the LIHTC allocating agency, and is
the reason the applicant must request
multiple allocations over two or more
years; and
(3) All applications for LIHTC for
buildings on the site are made in
immediately consecutive years.
Members of the public are hereby
reminded that the Secretary of Housing
and Urban Development, or the
Secretary’s designee, has legal authority
to designate DDAs and QCTs, in
accordance with 26 U.S.C. 42(d)(5), by
publishing lists of geographic entities as
defined by, in the case of DDAs, the
Census Bureau, the several states and
the governments of the insular areas of
the United States and, in the case of
QCTs, by the Census Bureau; and to
establish the effective dates of such lists.
The Secretary of the Treasury, through
the IRS thereof, has sole legal authority
to interpret, and to determine and
enforce compliance with the IRC and
associated regulations, including
Federal Register notices published by
HUD for purposes of designating DDAs
and QCTs. Representations made by any
other entity as to the content of HUD
notices designating DDAs and QCTs that
do not precisely match the language
published by HUD should not be relied
upon by taxpayers in determining what
actions are necessary to comply with
HUD notices.
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
35313
Interpretive Examples of Effective Date
For the convenience of readers of this
notice, interpretive examples are
provided below to illustrate the
consequences of the effective date in
areas that gain or lose DDA status. The
examples covering DDAs are equally
applicable to QCT designations.
(Case A) Project A is located in a 2020
DDA that is NOT a designated DDA in
2021, 2022, or 2023. A complete
application for tax credits for Project A
is filed with the allocating agency on
November 15, 2020. Credits are
allocated to Project A on January 30,
2023. Project A is eligible for the
increase in basis accorded a project in
a 2020 DDA because the application was
filed BEFORE January 1, 2021 (the
effective date for the 2021 DDA lists),
and because tax credits were allocated
no later than the end of the 910-day
period after the filing of the complete
application for an allocation of tax
credits.
(Case B) Project B is located in a 2020
DDA that is NOT a designated DDA in
2021, 2022, or 2023. A complete
application for tax credits for Project B
is filed with the allocating agency on
December 1, 2020. Credits are allocated
to Project B on June 30, 2023. Project B
is NOT eligible for the increase in basis
accorded a project in a 2020 DDA
because, although the application for an
allocation of tax credits was filed
BEFORE January 1, 2021 (the effective
date of the 2021 DDA lists), the tax
credits were allocated later than the end
of the 910-day period after the filing of
the complete application.
(Case C) Project C is located in a 2020
DDA that was not a DDA in 2019.
Project C was placed in service on
November 15, 2019. A complete
application for tax-exempt bond
financing for Project C is filed with the
bond-issuing agency on January 15,
2020. The bonds that will support the
permanent financing of Project C are
issued on September 30, 2020. Project C
is NOT eligible for the increase in basis
otherwise accorded a project in a 2020
DDA, because the project was placed in
service BEFORE January 1, 2020.
(Case D) Project D is located in an
area that is a DDA in 2020, but is NOT
a DDA in 2021, 2022, or 2023. A
complete application for tax-exempt
bond financing for Project D is filed
with the bond-issuing agency on
October 30, 2020. Bonds are issued for
Project D on January 30, 2023, but
Project D is not placed in service until
July 30, 2023. Project D is eligible for
the increase in basis available to
projects located in 2020 DDAs because:
(1) One of the two events necessary for
E:\FR\FM\02JYN1.SGM
02JYN1
35314
Federal Register / Vol. 86, No. 125 / Friday, July 2, 2021 / Notices
triggering the effective date for buildings
described in Section 42(h)(4)(B) of the
IRC (the two events being bonds issued
and buildings placed in service) took
place on January 30, 2023, within the
910-day period after a complete
application for tax-exempt bond
financing was filed, (2) the application
was filed during a time when the
location of Project D was in a DDA, and
(3) both the issuance of the bonds and
placement in service of Project D
occurred after the application was
submitted.
Findings and Certifications
This notice involves the
establishment of fiscal requirements or
procedures that are related to rate and
cost determinations and do not
constitute a development decision
affecting the physical condition of
specific project areas or building sites.
Accordingly, under 40 CFR 1508.4 of
the regulations of the Council on
Environmental Quality and 24 CFR
50.19(c)(6) of HUD’s regulations, this
notice is categorically excluded from
environmental review under the
National Environmental Policy Act of
1969 (42 U.S.C. 4321).
B. Federalism Impact
Executive Order 13132 (entitled
‘‘Federalism’’) prohibits an agency from
publishing any policy document that
has federalism implications if the
document either imposes substantial
direct compliance costs on state and
local governments and is not required
by statute, or the document preempts
state law, unless the agency meets the
consultation and funding requirements
of section 6 of the executive order. This
notice merely designates DDAs and
QCTs as required under IRC Section 42,
as amended, for the use by political
subdivisions of the states in allocating
the LIHTC. As a result, this notice is not
subject to review under the order.
Kurt G. Usowski,
Deputy Assistant Secretary for Economic
Affairs.
[FR Doc. 2021–14235 Filed 7–1–21; 8:45 am]
lotter on DSK11XQN23PROD with NOTICES1
BILLING CODE 4210–67–P
17:12 Jul 01, 2021
[Docket No. FR–7038–N–11; OMB Control
No. 2502–0554]
60-Day Notice of Proposed Information
Collection: Request for Prepayment of
Section 202 or 202/8 Direct Loan
Project
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, HUD.
ACTION: Notice.
AGENCY:
HUD is seeking approval from
the Office of Management and Budget
(OMB) for the information collection
described below. In accordance with the
Paperwork Reduction Act, HUD is
requesting comment from all interested
parties on the proposed collection of
information. The purpose of this notice
is to allow for 60 days of public
comment.
SUMMARY:
A. Environmental Impact
VerDate Sep<11>2014
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Jkt 253001
DATES:
Comments Due Date: August 31,
2021.
Interested persons are
invited to submit comments regarding
this proposal. Comments should refer to
the proposal by name and/or OMB
Control Number and should be sent to:
Colette Pollard, Reports Management
Officer, Department of Housing and
Urban Development, 451 7th Street SW,
Room 4176, Washington, DC 20410–
5000; telephone 202–402–3400 (this is
not a toll-free number) or email at
Colette.Pollard@hud.gov for a copy of
the proposed forms or other available
information. Persons with hearing or
speech impairments may access this
number through TTY by calling the
Federal Relay Service at (800) 877–8339
(this is a toll-free number).
FOR FURTHER INFORMATION CONTACT:
Colette Pollard, Reports Management
Officer, QDAM, Department of Housing
and Urban Development, 451 7th Street
SW, Washington, DC 20410; email
Colette Pollard at Colette.Pollard@
hud.gov or telephone 202–402–3400
(this is not a toll-free number). Persons
with hearing or speech impairments
may access this number through TTY by
calling the Federal Relay Service at
(800) 877–8339 (this is a toll-free
number).
Copies of available documents
submitted to OMB may be obtained
from Ms. Pollard.
SUPPLEMENTARY INFORMATION: This
notice informs the public that HUD is
seeking approval from OMB for the
information collection described in
Section A.
ADDRESSES:
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
A. Overview of Information Collection
Title of Information Collection:
Request for Prepayment of Section 202
or 202/8 Project. OMB Approval
Number: 2502–0554.
Type of Request: Reinstatement, with
change, of previously approved
collection for which approval has
expired.
Form Number: HUD–9808.
Description of the need for the
information and proposed use: The
Owner must execute the Section 202
Prepayment Use Agreement provided as
Attachment 1 to this Notice that will
ensure the continued operation of the
project until at least 20 years following
the maturity date of the original loan
under terms at least as advantageous to
existing and future tenants as the terms
required by the original loan agreement.
The Use Agreement must be executed
by the Owner and the Department and
recorded upon HUD’s approval of the
prepayment transaction.
Respondents (i.e., affected public):
Business, Not for profit institutions.
Estimated Number of Respondents:
1,566.
Estimated Number of Responses:
1,566.
Frequency of Response: On occasion.
Average Hours per Response: 1 hours.
Total Estimated Burdens: 1,566.
B. Solicitation of Public Comment
This notice is soliciting comments
from members of the public and affected
parties concerning the collection of
information described in Section A on
the following:
(1) Whether the proposed collection
of information is necessary for the
proper performance of the functions of
the agency, including whether the
information will have practical utility;
(2) The accuracy of the agency’s
estimate of the burden of the proposed
collection of information;
(3) Ways to enhance the quality,
utility, and clarity of the information to
be collected; and
(4) Ways to minimize the burden of
the collection of information on those
who are to respond; including through
the use of appropriate automated
collection techniques or other forms of
information technology, e.g., permitting
electronic submission of responses.
HUD encourages interested parties to
submit comment in response to these
questions.
E:\FR\FM\02JYN1.SGM
02JYN1
]]>Agencies
[Federal Register Volume 86, Number 125 (Friday, July 2, 2021)]
[Notices]
[Pages 35311-35314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14235]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6275-N-01]
Statutorily Mandated Designation of Difficult Development Areas
and Qualified Census Tracts: Revision of Effective Date for 2019 and
2020 Designations
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, HUD.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This document revises the effective date for designations of
``Difficult Development Areas'' (DDAs) and ``Qualified Census Tracts''
(QCTs) for purposes of the Low-Income Housing Tax Credit (LIHTC) under
Internal Revenue Code (IRC) Section 42 (26 U.S.C. 42) published on
October 22, 2018, (83 FR 53282) and September 25, 2019, (84 FR 50465)
in response to the Presidentially-declared COVID-19 emergency. This
notice extends from 730 days to 910 days the period for which the 2019
and 2020 lists of QCTs and DDAs are effective for projects (1) located
in an area not on subsequent lists of DDAs or QCTs; and (2) that
submitted applications while the area was a 2019 or 2020 QCT or DDA.
FOR FURTHER INFORMATION CONTACT: For questions on how areas are
designated and on geographic definitions, contact Michael K. Hollar,
Senior Economist, Economic Development and Public Finance Division,
Office of Policy Development and Research, Department of Housing and
Urban Development, 451 Seventh Street SW, Room 8234, Washington, DC
20410-6000; telephone number (202) 402-5878, or send an email to
[email protected]. For specific legal questions, contact Branch
5, Office of the Associate Chief Counsel, Passthroughs and Special
Industries, Internal Revenue Service, 1111 Constitution Avenue NW,
Washington, DC 20224; telephone number (202) 317-4137, fax number (855)
591-7867. (These are not toll-free telephone numbers.) Additional
copies of this notice are available through HUD User at (800) 245-2691
for a small fee to cover duplication and mailing costs.
Copies Available Electronically: This notice and additional
information about DDAs and QCTs are available electronically on the
internet at https://www.huduser.org/datasets/qct.html.
SUPPLEMENTARY INFORMATION:
Background
On March 13, 2020, the President issued major disaster declarations
under the authority of the Stafford Act with respect to all 50 States,
the District of Columbia, and 5 territories (American Samoa, Guam,
Puerto Rico, Northern Mariana Islands, and the U.S. Virgin Islands) to
assist with additional needs identified under the nationwide emergency
declaration for COVID-19. In the context of a Presidentially-declared
Major Disaster, IRS Revenue Procedure 2014-49, 2014-37 I.R.B. 535,
provides temporary relief to housing finance agencies (HFAs) and owners
from certain requirements of IRC Section 42. Among the relief provided,
if an owner has a carryover allocation for a building located in a
Major Disaster Area and the Major Disaster occurs on or after the date
of the carryover allocation, an HFA may grant an extension to the
placed-in-service requirement. Rev. Proc. 2014-49, Section 6.03. This
extension applies only to properties receiving IRC Section 42 allocated
credits and does not apply or provide relief to properties receiving
credits associated with IRC Section 142 tax-exempt bond revenue. HUD is
revising the effective date of the 2019 and 2020 QCTs and DDAs at this
time to aid the ability of areas affected by COVID-19 to place in
service affordable housing under both Section 42 and Section 142.
I. This Notice
This notice extends from 730 days to 910 days the period for which
the 2019 and 2020 lists of QCTs and DDAs are effective for projects
that are not located in areas on subsequent lists of DDAs or QCTs but
submitted applications while the area was a 2019 or 2020 QCT or DDA.
HUD published lists of DDAs and QCTs for 2019 on October 22, 2018 (83
FR 53282); for 2020 on September 25, 2019 (84 FR 50465); and for 2021
on September 24, 2020 (85 FR 60255). The actual designations of 2019
and 2020 QCTs and DDAs are not affected by this notice. HUD is revising
the effective date of the 2019 and 2020 QCTs and DDAs at this time to
aid the ability of areas affected by COVID-19 to place in service
affordable housing.
[[Page 35312]]
II. Extension of 2019 DDA and QCT Designations
For LIHTC and bond-financed projects, the sections entitled
``Effective Date'' and ``Interpretive Examples of Effective Date'' of
the 2019 DDA and QCT designations as published October 22, 2018 (83 FR
53282) are hereby revised to read as follows:
Effective Date
The 2019 lists of QCTs and DDAs are effective:
(1) For allocations of credit after December 31, 2018; or
(2) for purposes of IRC section 42(h)(4), if the bonds are issued
and the building is placed in service after December 31, 2018.
If an area is not on a subsequent list of DDAs, the 2019 lists are
effective for the area if:
(1) The allocation of credit to an applicant is made no later than
the end of the 910-day period after the applicant submits a complete
application to the LIHTC-allocating agency, and the submission is made
before the effective date of the subsequent lists; or
(2) for purposes of IRC section 42(h)(4), if:
(a) The bonds are issued or the building is placed in service no
later than the end of the 910-day period after the applicant submits a
complete application to the bond-issuing agency, and
(b) the submission is made before the effective date of the
subsequent lists, provided that both the issuance of the bonds and the
placement in service of the building occur after the application is
submitted.
An application is deemed to be submitted on the date it is filed if
the application is determined to be complete by the credit-allocating
or bond-issuing agency. A ``complete application'' means that no more
than de minimis clarification of the application is required for the
agency to make a decision about the allocation of tax credits or
issuance of bonds requested in the application.
In the case of a ``multiphase project,'' the DDA or QCT status of
the site of the project that applies for all phases of the project is
that which applied when the project received its first allocation of
LIHTC. For purposes of IRC section 42(h)(4), the DDA or QCT status of
the site of the project that applies for all phases of the project is
that which applied when the first of the following occurred: (a) The
building(s) in the first phase were placed in service, or (b) the bonds
were issued.
For purposes of this notice, a ``multiphase project'' is defined as
a set of buildings to be constructed or rehabilitated under the rules
of the LIHTC and meeting the following criteria:
(1) The multiphase composition of the project (i.e., total number
of buildings and phases in project, with a description of how many
buildings are to be built in each phase and when each phase is to be
completed, and any other information required by the agency) is made
known by the applicant in the first application of credit for any
building in the project, and that applicant identifies the buildings in
the project for which credit is (or will be) sought;
(2) The aggregate amount of LIHTC applied for on behalf of, or that
would eventually be allocated to, the buildings on the site exceeds the
one-year limitation on credits per applicant, as defined in the
Qualified Allocation Plan (QAP) of the LIHTC-allocating agency, or the
annual per-capita credit authority of the LIHTC allocating agency, and
is the reason the applicant must request multiple allocations over two
or more years; and
(3) All applications for LIHTC for buildings on the site are made
in immediately consecutive years.
Members of the public are hereby reminded that the Secretary of
Housing and Urban Development, or the Secretary's designee, has legal
authority to designate DDAs and QCTs, in accordance with 26 U.S.C.
42(d)(5), by publishing lists of geographic entities as defined by, in
the case of DDAs, the Census Bureau, the several states and the
governments of the insular areas of the United States and, in the case
of QCTs, by the Census Bureau; and to establish the effective dates of
such lists. The Secretary of the Treasury, through the IRS thereof, has
sole legal authority to interpret, and to determine and enforce
compliance with the IRC and associated regulations, including Federal
Register notices published by HUD for purposes of designating DDAs and
QCTs. Representations made by any other entity as to the content of HUD
notices designating DDAs and QCTs that do not precisely match the
language published by HUD should not be relied upon by taxpayers in
determining what actions are necessary to comply with HUD notices.
Interpretive Examples of Effective Date
For the convenience of readers of this notice, interpretive
examples are provided below to illustrate the consequences of the
effective date in areas that gain or lose DDA status. The examples
covering DDAs are equally applicable to QCT designations.
(Case A) Project A is located in a 2019 DDA that is NOT a
designated DDA in 2020, 2021, or 2022. A complete application for tax
credits for Project A is filed with the allocating agency on November
15, 2019. Credits are allocated to Project A on January 30, 2022.
Project A is eligible for the increase in basis accorded a project in a
2019 DDA because the application was filed BEFORE January 1, 2020 (the
effective date for the 2020 DDA lists), and because tax credits were
allocated no later than the end of the 910-day period after the filing
of the complete application for an allocation of tax credits.
(Case B) Project B is located in a 2019 DDA that is NOT a
designated DDA in 2020, 2021, or 2022. A complete application for tax
credits for Project B is filed with the allocating agency on December
1, 2019. Credits are allocated to Project B on June 30, 2022. Project B
is NOT eligible for the increase in basis accorded a project in a 2019
DDA because, although the application for an allocation of tax credits
was filed BEFORE January 1, 2020 (the effective date of the 2020 DDA
lists), the tax credits were allocated later than the end of the 910-
day period after the filing of the complete application.
(Case C) Project C is located in a 2019 DDA that was not a DDA in
2018. Project C was placed in service on November 15, 2018. A complete
application for tax-exempt bond financing for Project C is filed with
the bond-issuing agency on January 15, 2019. The bonds that will
support the permanent financing of Project C are issued on September
30, 2019. Project C is NOT eligible for the increase in basis otherwise
accorded a project in a 2019 DDA, because the project was placed in
service BEFORE January 1, 2019.
(Case D) Project D is located in an area that is a DDA in 2019, but
is NOT a DDA in 2020, 2021, or 2022. A complete application for tax-
exempt bond financing for Project D is filed with the bond-issuing
agency on October 30, 2019. Bonds are issued for Project D on January
30, 2022, but Project D is not placed in service until July 30, 2022.
Project D is eligible for the increase in basis available to projects
located in 2019 DDAs because: (1) One of the two events necessary for
triggering the effective date for buildings described in Section
42(h)(4)(B) of the IRC (the two events being bonds issued and buildings
placed in service) took place on January 30, 2022, within the 910-day
period after a complete application for tax-exempt bond financing was
filed, (2) the application was filed during a time when the
[[Page 35313]]
location of Project D was in a DDA, and (3) both the issuance of the
bonds and placement in service of Project D occurred after the
application was submitted.
Extension of 2020 DDA and QCT Designations
For LIHTC and bond-financed projects, the sections entitled
``Effective Date'' and ``Interpretive Examples of Effective Date'' of
the 2020 DDA and QCT designations as published September 25, 2019 (84
FR 50465) are hereby revised to read as follows:
Effective Date
The 2020 lists of QCTs and DDAs are effective:
(1) For allocations of credit after December 31, 2019; or
(2) for purposes of IRC section 42(h)(4), if the bonds are issued
and the building is placed in service after December 31, 2019.
If an area is not on a subsequent list of DDAs, the 2020 lists are
effective for the area if:
(1) The allocation of credit to an applicant is made no later than
the end of the 910-day period after the applicant submits a complete
application to the LIHTC-allocating agency, and the submission is made
before the effective date of the subsequent lists; or
(2) for purposes of IRC section 42(h)(4), if:
(a) The bonds are issued or the building is placed in service no
later than the end of the 910-day period after the applicant submits a
complete application to the bond-issuing agency, and
(b) the submission is made before the effective date of the
subsequent lists, provided that both the issuance of the bonds and the
placement in service of the building occur after the application is
submitted.
An application is deemed to be submitted on the date it is filed if
the application is determined to be complete by the credit-allocating
or bond-issuing agency. A ``complete application'' means that no more
than de minimis clarification of the application is required for the
agency to make a decision about the allocation of tax credits or
issuance of bonds requested in the application.
In the case of a ``multiphase project,'' the DDA or QCT status of
the site of the project that applies for all phases of the project is
that which applied when the project received its first allocation of
LIHTC. For purposes of IRC section 42(h)(4), the DDA or QCT status of
the site of the project that applies for all phases of the project is
that which applied when the first of the following occurred: (a) The
building(s) in the first phase were placed in service, or (b) the bonds
were issued.
For purposes of this notice, a ``multiphase project'' is defined as
a set of buildings to be constructed or rehabilitated under the rules
of the LIHTC and meeting the following criteria:
(1) The multiphase composition of the project (i.e., total number
of buildings and phases in project, with a description of how many
buildings are to be built in each phase and when each phase is to be
completed, and any other information required by the agency) is made
known by the applicant in the first application of credit for any
building in the project, and that applicant identifies the buildings in
the project for which credit is (or will be) sought;
(2) The aggregate amount of LIHTC applied for on behalf of, or that
would eventually be allocated to, the buildings on the site exceeds the
one-year limitation on credits per applicant, as defined in the
Qualified Allocation Plan (QAP) of the LIHTC-allocating agency, or the
annual per-capita credit authority of the LIHTC allocating agency, and
is the reason the applicant must request multiple allocations over two
or more years; and
(3) All applications for LIHTC for buildings on the site are made
in immediately consecutive years.
Members of the public are hereby reminded that the Secretary of
Housing and Urban Development, or the Secretary's designee, has legal
authority to designate DDAs and QCTs, in accordance with 26 U.S.C.
42(d)(5), by publishing lists of geographic entities as defined by, in
the case of DDAs, the Census Bureau, the several states and the
governments of the insular areas of the United States and, in the case
of QCTs, by the Census Bureau; and to establish the effective dates of
such lists. The Secretary of the Treasury, through the IRS thereof, has
sole legal authority to interpret, and to determine and enforce
compliance with the IRC and associated regulations, including Federal
Register notices published by HUD for purposes of designating DDAs and
QCTs. Representations made by any other entity as to the content of HUD
notices designating DDAs and QCTs that do not precisely match the
language published by HUD should not be relied upon by taxpayers in
determining what actions are necessary to comply with HUD notices.
Interpretive Examples of Effective Date
For the convenience of readers of this notice, interpretive
examples are provided below to illustrate the consequences of the
effective date in areas that gain or lose DDA status. The examples
covering DDAs are equally applicable to QCT designations.
(Case A) Project A is located in a 2020 DDA that is NOT a
designated DDA in 2021, 2022, or 2023. A complete application for tax
credits for Project A is filed with the allocating agency on November
15, 2020. Credits are allocated to Project A on January 30, 2023.
Project A is eligible for the increase in basis accorded a project in a
2020 DDA because the application was filed BEFORE January 1, 2021 (the
effective date for the 2021 DDA lists), and because tax credits were
allocated no later than the end of the 910-day period after the filing
of the complete application for an allocation of tax credits.
(Case B) Project B is located in a 2020 DDA that is NOT a
designated DDA in 2021, 2022, or 2023. A complete application for tax
credits for Project B is filed with the allocating agency on December
1, 2020. Credits are allocated to Project B on June 30, 2023. Project B
is NOT eligible for the increase in basis accorded a project in a 2020
DDA because, although the application for an allocation of tax credits
was filed BEFORE January 1, 2021 (the effective date of the 2021 DDA
lists), the tax credits were allocated later than the end of the 910-
day period after the filing of the complete application.
(Case C) Project C is located in a 2020 DDA that was not a DDA in
2019. Project C was placed in service on November 15, 2019. A complete
application for tax-exempt bond financing for Project C is filed with
the bond-issuing agency on January 15, 2020. The bonds that will
support the permanent financing of Project C are issued on September
30, 2020. Project C is NOT eligible for the increase in basis otherwise
accorded a project in a 2020 DDA, because the project was placed in
service BEFORE January 1, 2020.
(Case D) Project D is located in an area that is a DDA in 2020, but
is NOT a DDA in 2021, 2022, or 2023. A complete application for tax-
exempt bond financing for Project D is filed with the bond-issuing
agency on October 30, 2020. Bonds are issued for Project D on January
30, 2023, but Project D is not placed in service until July 30, 2023.
Project D is eligible for the increase in basis available to projects
located in 2020 DDAs because: (1) One of the two events necessary for
[[Page 35314]]
triggering the effective date for buildings described in Section
42(h)(4)(B) of the IRC (the two events being bonds issued and buildings
placed in service) took place on January 30, 2023, within the 910-day
period after a complete application for tax-exempt bond financing was
filed, (2) the application was filed during a time when the location of
Project D was in a DDA, and (3) both the issuance of the bonds and
placement in service of Project D occurred after the application was
submitted.
Findings and Certifications
A. Environmental Impact
This notice involves the establishment of fiscal requirements or
procedures that are related to rate and cost determinations and do not
constitute a development decision affecting the physical condition of
specific project areas or building sites. Accordingly, under 40 CFR
1508.4 of the regulations of the Council on Environmental Quality and
24 CFR 50.19(c)(6) of HUD's regulations, this notice is categorically
excluded from environmental review under the National Environmental
Policy Act of 1969 (42 U.S.C. 4321).
B. Federalism Impact
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any policy document that has federalism implications if
the document either imposes substantial direct compliance costs on
state and local governments and is not required by statute, or the
document preempts state law, unless the agency meets the consultation
and funding requirements of section 6 of the executive order. This
notice merely designates DDAs and QCTs as required under IRC Section
42, as amended, for the use by political subdivisions of the states in
allocating the LIHTC. As a result, this notice is not subject to review
under the order.
Kurt G. Usowski,
Deputy Assistant Secretary for Economic Affairs.
[FR Doc. 2021-14235 Filed 7-1-21; 8:45 am]
BILLING CODE 4210-67-P
