Funding Opportunity Title: Notice of Allocation Availability (NOAA) Inviting Applications for the Calendar Year (CY) 2022 Allocation Round of the New Markets Tax Credit (NMTC) Program, 71409-71419 [2022-25116]
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Federal Register / Vol. 87, No. 224 / Tuesday, November 22, 2022 / Notices
71409
Dates:
DEPARTMENT OF THE TREASURY
Community Development Financial
Institutions Fund
Funding Opportunity Title: Notice of
Allocation Availability (NOAA) Inviting
Applications for the Calendar Year
(CY) 2022 Allocation Round of the New
Markets Tax Credit (NMTC) Program
Announcement type: Announcement
of NMTC Allocation availability.
TABLE 1—CY 2022 ALLOCATION ROUND NMTC PROGRAM CRITICAL DEADLINES FOR APPLICANTS
Description
Submission method
Community Development Entity (CDE) Certification Application .........
December 2,
2022.
11:59 p.m. ET ...
Request to modify CDE certification service area ................................
December 2,
2022.
December 2,
2022.
December 15,
2022.
January 24,
2023.
January 26,
2023.
March 6, 2023 ...
11:59 p.m. ET ...
Electronically via the Awards
Management Information System (AMIS).
Electronically via AMIS.
11:59 p.m. ET ...
Electronically via AMIS.
5:00 p.m. ET .....
Electronically via AMIS.
5:00 p.m. ET .....
Electronically via AMIS.
5:00 p.m. ET .....
Electronically via AMIS.
11:59 p.m. ET ...
Electronically via AMIS.
March 6, 2023 ...
11:59 p.m. ET ...
Electronically via AMIS.
May 4, 2023 ......
11:59 p.m. ET ...
Not Applicable.
May 11, 2023 ....
11:59 p.m. ET ...
Electronically via AMIS.
Subsidiary CDE Certification Application for meeting Qualified Equity
Investment (QEI) issuance thresholds.
CY 2022 Application Registration .........................................................
Last date to contact CDFI Fund staff ...................................................
CY 2022 Allocation Application (including required Attachments) .......
Amendment request to add Subsidiary CDEs to Allocation Agreements for meeting QEI issuance thresholds.
Amendment request to remove a Controlling Entity from Allocation
Agreement(s).
QEI Issuance and making Qualified Low Income Community Investments (QLICIs) by.
Report QEIs and certify QLICIs by .......................................................
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Time
(eastern
time—ET)
Deadline/date
Executive Summary: This NOAA is
issued in connection with the CY 2022
allocation round (Allocation Round) of
the New Markets Tax Credit Program
(NMTC Program), as authorized by Title
I, subtitle C, section 121 of the
Community Renewal Tax Relief Act of
2000 (Pub. L. 106–554) as amended.
Through the NMTC Program, the
Community Development Financial
Institutions Fund (CDFI Fund) provides
authority to certified CDEs to offer an
incentive to investors in the form of tax
credits over seven years, which is
expected to stimulate the provision of
private investment capital that, in turn,
will facilitate economic and community
development in Low-Income
Communities. Through this NOAA, the
CDFI Fund announces the availability of
$5 billion of NMTC Allocation authority
in this Allocation Round. In this NOAA,
the CDFI Fund specifically addresses
how a CDE may apply to receive an
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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
2021 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 2021 NOAA. See
Section III. A.5(a) of this NOAA for
additional details.
II. Allocation Information
A. Allocation amounts: Pursuant to
the Taxpayer Certainty and Disaster Tax
Relief Act of 2020, the CDFI Fund
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expects that it may allocate to CDEs the
authority to issue to their investors the
aggregate amount of $5 billion in equity
as to which NMTCs may be claimed, as
permitted under IRC § 45D(f)(1)(D).
Pursuant to this NOAA, the CDFI Fund
anticipates that it may issue up to $100
million in tax credit investment
authority per Allocatee. The CDFI Fund,
in its sole discretion, reserves the right
to allocate amounts in excess of or less
than the anticipated maximum
allocation amount should the CDFI
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.
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C. Program guidance and regulations:
This NOAA describes application and
NMTC Allocation requirements for this
Allocation Round of the NMTC Program
and should be read in conjunction with:
(i) the final NMTC Program Income Tax
Regulations issued by the Internal
Revenue Service (IRS) (26 CFR 1.45D–
1, published on December 28, 2004), as
amended and related guidance, notices
and other publications; and (ii) the
application and related materials for
this Allocation Round. All such
materials may be found on the CDFI
Fund’s website at https://
www.cdfifund.gov. The CDFI Fund
requires Applicants to review these
documents. Capitalized terms used, but
not defined, in this NOAA have the
respective meanings assigned to them in
the NMTC Program Allocation
Application, Internal Revenue Code
(IRC) § 45D or the IRS NMTC
regulations. In the event of any
inconsistency between this NOAA, the
Allocation Application, and guidance
issued by the CDFI Fund thereto, IRC
§ 45D or the IRS NMTC Regulations, the
provisions of IRC § 45D and the IRS
NMTC Regulations shall govern.
D. Allocation Agreement: Each
Allocatee must sign an Allocation
Agreement, which must be
countersigned by the CDFI Fund, before
the NMTC Allocation is effective. The
Allocation Agreement contains the
terms and conditions of the NMTC
Allocation. For further information, see
Section VI.B of this NOAA.
E. Statutory and national policy
requirements: The CDFI Fund will
manage and administer the NMTC
Program in a manner so as to ensure that
NMTC Allocations associated programs
are implemented in full accordance
with the U.S. Constitution, Federal Law,
statutory, and public policy
requirements: including, but not limited
to, those protecting free speech;
religious liberty; public welfare; the
environment; and prohibiting
discrimination.
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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
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consider an application for an allocation
of NMTCs unless: (a) the Applicant is
certified as a CDE at the time the CDFI
Fund receives its NMTC Program
Allocation Application; or (b) the
Applicant submits an application for
certification as a CDE through AMIS by
the deadline in Table 1. Applicants for
CDE certification may obtain
information regarding CDE certification
and the CDE Certification Application
process in AMIS on the CDFI Fund’s
website at https://www.cdfifund.gov/
programs-training/certification/cde/
Pages/default.aspx.
The CDFI Fund will not provide
NMTC Allocation authority to
Applicants that are not certified as CDEs
or to entities that are certified as
Subsidiary CDEs.
If an Applicant that has already been
certified as a CDE wishes to change its
designated CDE Service Area for this
Allocation Round, then it must submit
a CDE Service Area Amendment
Application to request such a change
from the CDFI Fund, and the
application must be received by the
CDFI Fund by the deadline listed in
Table 1. A request to change a CDE’s
Service Area will need to include the
revised service area designation and
updated accountability information that
demonstrates that the CDE has the
required representation from 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
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
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indirectly, to the debt or equity provider
or an Affiliate of the debt or equity
provider.
3. Do Not Pay: The CDFI Fund will
contact the Do Not Pay Business Center
to ensure that an Applicant, its
Controlling Entity, and any Affiliate(s)
are not prohibited from receiving federal
funds. An Applicant, its Controlling
Entity, and any Affiliate(s) reported by
the Do Not Pay Business Center as
having a pending or delinquent debt to
the Federal government will be required
to demonstrate that it has resolved such
pending or delinquent debt. Applicants
that fail to demonstrate resolution of
such pending or delinquent debt to the
Federal government will be found
ineligible to receive an allocation.
4. Controlling Entities: An
organization that was a Controlling
Entity to an Allocatee in a prior round(s)
and subsequently separated from that
Allocatee, as a result of an amendment
to the Allocation Agreement(s), may not
claim the NMTC-related track record of
such Allocatee.
5. Prior award recipients or
Allocatees: Applicants must be aware
that success in a prior application or
allocation round of any of the CDFI
Fund’s programs is not indicative of
success under this NOAA. For purposes
of this NOAA, and eligibility
determinations, the CDFI Fund will
consider an Affiliate to be any entity
that meets the definition of Affiliate as
defined in the NMTC Allocation
Application materials, or any entity
otherwise identified as an Affiliate by
the Applicant in its NMTC Allocation
Application materials.
Prior award recipients of any CDFI
Fund program are eligible to apply
under this NOAA, except as follows:
(a) Prior Allocatees and Qualified
Equity Investment (QEI) issuance and
Qualified Low Income Community
Investment (QLICI) requirements: CDEs
that are Allocatees under the CY 2017
to the CY 2021 rounds must finalize at
least the percentage of QEIs noted in
Table 2 for each NMTC Allocation
round and use at least the percentage of
those QEIs designated in Schedule 1,
section 3.2(j) of their Allocation
Agreements to make QLICIs by the
deadline in Table 1. CDEs that are
Allocatees under the CY 2017 to the CY
2021 allocation rounds and CDEs that
are Allocatees designated as Rural CDEs
in their CY 2021 Allocation Agreement
must meet the following thresholds.
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TABLE 2—QEI ISSUANCE AND QLICI REQUIREMENTS
Prior round allocation
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CY
CY
CY
CY
CY
2017
2018
2019
2020
2021
Rural CDE
finalized QEI
requirement
(percent)
Finalized QEI
requirement
(percent)
.......................
.......................
.......................
.......................
.......................
100
90
70
40
20
In addition to the requirements noted
above, a CDE is not eligible to receive
an NMTC Allocation pursuant to this
NOAA if an Affiliate of the Applicant is
a prior Allocatee and has not met the
minimum QEI issuance and QLICI
thresholds as set forth in Table 2 for
Allocatees in the prior allocation rounds
of the NMTC Program.
For purposes of this section of the
NOAA, the CDFI Fund will only
recognize as ‘‘finalized’’ those QEIs that
have been properly reported in AMIS
Allocation and QEI Tracking System for
Qualified Equity Investments (AQEIs)
by the deadline in Table 1. Allocatees
and their Subsidiary Allocatees, if any,
are advised to access AMIS to record
each QEI that they issue to an investor
in exchange for cash. Furthermore, the
CDFI Fund will only recognize QLICIs
that have been certified in AMIS by the
deadline in Table 1. Instructions on
recording a QEI and QLICIs in AMIS are
available at https://www.cdfifund.gov/
amisreporting. Applicants may be
required, upon notification from the
CDFI Fund, to submit documentation to
substantiate the required QEI issuance
and QLICI thresholds.
Any prior Allocatee that requires
action by the CDFI Fund (i.e., certifying
a subsidiary entity as a CDE; adding a
subsidiary CDE to an Allocation
Agreement; etc.) in order to meet the
QEI issuance requirements above must
submit a CDE Certification Application
for Subsidiary CDEs and/or Allocation
Agreement amendment requests by the
respective deadlines in Table 1, in order
to guarantee that the CDFI Fund
completes all necessary approvals prior
to the QEI issuance deadline in Table 1.
Applicants for Subsidiary CDE
certification may obtain information
regarding CDE certification and the CDE
Certification Application process in
AMIS on the CDFI Fund’s website at
https://www.cdfifund.gov/programstraining/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
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100
90
70
40
0
QLICIs
As stated in Schedule 1, Section 3.2(j) of the applicable Allocation Agreement.
program and if: (i) it has demonstrated
noncompliance with a previous
assistance or award agreement or default
under a previous Allocation Agreement
or pursuant to any other agreement
under any CDFI Fund program; and (ii)
the entity has been given a timeframe to
cure the noncompliance or default, the
CDFI Fund will consider the
Applicant’s application under this
NOAA during the time period given for
the entity to cure the noncompliance or
default, and until such time as the CDFI
Fund makes a final determination that
the entity is in noncompliance or
default. Further, if an Affiliate of the
Applicant is a prior CDFI Fund award
recipient or Allocatee and if such entity:
(i) has demonstrated noncompliance
with a previous assistance or award
agreement or default under a previous
Allocation Agreement or pursuant to
any other agreement under any CDFI
Fund program; and (ii) the entity has
been given a timeframe to cure the
noncompliance or default, then the
CDFI Fund will consider the
Applicant’s application under this
NOAA during the time period given for
the entity to cure the noncompliance or
default, and until such time as the CDFI
Fund makes a final determination that
the entity is in noncompliance or
default.
(c) Noncompliance or default status:
The CDFI Fund will not consider an
application submitted by an Applicant
that is a prior CDFI Fund award
recipient or Allocatee under any CDFI
Fund program if, as of the application
deadline of this NOAA: (i) the CDFI
Fund has made a final determination
that such Applicant is noncompliant
with a previously executed assistance or
award agreement, or in default of a
previously executed Allocation
Agreement or any other agreement
under any CDFI Fund program; and (ii)
the CDFI Fund has provided written
notification of such final determination
to the Applicant; and (iii) the default
occurs during the time period beginning
12 months prior to the application
deadline and ending with the CY 2022
allocation award announcement.
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Further, the CDFI Fund will not
consider an application submitted by an
Applicant with an Affiliate that is a
prior award recipient or Allocatee under
any CDFI Fund Program if, as of the
application deadline of this NOAA: (i)
the CDFI Fund has made a final
determination that such Affiliate is
noncompliant with a previously
executed assistance or award agreement,
or in default of a previously executed
Allocation Agreement or any other
agreement under any CDFI Fund
program; (ii) the CDFI Fund has
provided written notification of such
final determination to the Affiliate; and
(iii) the noncompliance or default
occurs during the time period beginning
12 months prior to the application
deadline and ending with the CY 2022
allocation award announcement.
(d) Contacting the CDFI Fund:
Accordingly, Applicants that are prior
award recipients and/or Allocatees
under any CDFI Fund program are
advised to comply with the
requirements specified in assistance,
allocation and/or award agreement(s).
All outstanding reports and compliance
questions should be directed to the
Office of Compliance Monitoring and
Evaluation (OCME) through a Service
Request initiated in AMIS. Requests
submitted less than 30 calendar days
prior to the application deadline may
not receive a response before the
application deadline.
The CDFI Fund will respond to
Applicants’ reporting, compliance and
CDE certification inquiries Monday
through Friday, between the hours of
9:00 a.m. and 5:00 p.m. ET, starting the
date of publication of this NOAA
through the ‘‘Last date to contact CDFI
Fund staff’’ specified in Table 1.
Inquiries received after the ‘‘Last date to
contact the CDFI Fund staff’’ will be
responded to after the Allocation
Application deadline.
6. Failure to accurately respond to a
question in the Assurances and
Certifications section of the application,
submit the required written explanation,
or provide any updates: In its sole
discretion, the CDFI Fund may deem the
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Applicant’s application ineligible, if the
CDFI Fund determines that the
Applicant inaccurately responded to a
question, accurately responded to a
question, but failed to submit a required
written explanation, or failed to notify
the CDFI Fund of any changes to the
information submitted between the date
of application and the date the Allocatee
executes the Allocation Agreement,
with respect to the Assurances and
Certifications. In making this
determination, the CDFI Fund will take
into consideration, among other factors,
the materiality of the question, the
substance of any supplemental
responses provided, and whether the
information in the Applicant’s
supplemental responses would have a
material adverse effect on the Applicant,
its financial condition or its ability to
perform under an Allocation
Agreement, should the Applicant
receive an allocation.
7. Entities that propose to transfer
NMTCs to Subsidiary CDEs: Both 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 an
NMTC Allocation must demonstrate,
prior to entering into an Allocation
Agreement with the CDFI Fund, that: (i)
it controls one or more Subsidiary CDEs
that are for-profit entities; and (ii) it
intends to transfer the full amount of
any NMTC Allocation it receives to said
Subsidiary CDEs.
An Applicant wishing to transfer all
or a portion of its NMTC Allocation to
a Subsidiary CDE is not required to
create the Subsidiary prior to submitting
an NMTC Allocation Application to the
CDFI Fund. However, the Subsidiary
entities must be certified as CDEs by the
CDFI Fund, and enjoined as parties to
the Allocation Agreement at closing or
by amendment to the Allocation
Agreement after closing.
The CDFI Fund requires a non-profit
Applicant to submit a CDE Certification
Application to the CDFI Fund on behalf
of at least one for-profit Subsidiary
within 45 days after the non-profit
Applicant receives notification from the
CDFI Fund of its allocation award, as
such Subsidiary must be certified as a
CDE prior to entering into an Allocation
Agreement with the CDFI Fund. The
CDFI Fund reserves the right to rescind
the award if a non-profit Applicant that
does not already have a certified 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.
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8. Entities that submit applications
together with Affiliates; applications
from common enterprises:
(a) As part of the Allocation
Application review process, the CDFI
Fund will evaluate whether Applicants
are Affiliates, as such term is defined in
the Allocation Application. If an
Applicant and its Affiliate(s) wish to
submit Allocation Applications, they
must do so collectively, in one
application; an Applicant and its
Affiliate(s) may not submit separate
Allocation Applications. If Affiliated
entities submit multiple applications,
the CDFI Fund will reject all such
applications received, except for those
state-owned or state-controlled
governmental Affiliated entities. In the
case of state-owned or state-controlled
governmental entities, the CDFI Fund
may accept applications submitted by
different government bodies within the
same state, but only to the extent the
CDFI Fund determines that the business
strategies and/or activities described in
such applications, submitted by
separate entities, are distinctly
dissimilar and/or are operated and/or
managed by distinctly dissimilar
personnel, including staff, board
members and identified consultants. In
such cases, the CDFI Fund reserves the
right to limit award amounts to such
entities to ensure that the entities do not
collectively receive more than the $100
million cap.
If the CDFI Fund determines that the
applications submitted by different
government bodies in the same state are
not distinctly dissimilar and/or operated
and/or managed by distinctly dissimilar
personnel, it will reject all such
applications.
(b) For purposes of this NOAA, the
CDFI Fund will also evaluate whether
each Applicant is operated or managed
as a ‘‘common enterprise’’ with another
Applicant in this Allocation Round
using the following indicia, among
others: (i) whether different Applicants
have the same individual(s), including
the Authorized Representative, staff,
board members and/or consultants,
involved in day-to-day management,
operations and/or investment
responsibilities; (ii) whether the
Applicants have business strategies and/
or proposed activities that are so similar
or so closely related that, in fact or
effect, they may be viewed as a single
entity; and/or (iii) whether the
applications submitted by separate
Applicants contain significant narrative,
textual or other similarities such that
they may, in fact or effect, be viewed as
substantially identical applications. In
such cases, the CDFI Fund will reject all
applications received from such entities.
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(c) Furthermore, an Applicant that
receives an NMTC Allocation in this
Allocation Round (or its Subsidiary
Allocatee) may not become an Affiliate
of or member of a common enterprise
(as defined above) with another
Applicant that receives an NMTC
Allocation in this Allocation Round (or
its Subsidiary Allocatee) at any time
after the submission of an Allocation
Application under this NOAA. This
prohibition, however, generally does not
apply to entities that are commonly
controlled solely because of common
ownership by QEI investors. This
requirement will also be a term and
condition of the Allocation Agreement
(see Section VI.B of this NOAA and
additional application guidance
materials on the CDFI Fund’s website at
https://www.cdfifund.gov for more
details).
9. Entities created as a series of funds:
An Applicant whose business structure
consists of an entity with a series of
funds must apply for CDE certification
for each fund. If such an Applicant
represents that it is properly classified
for Federal tax purposes as a single
partnership or corporation, it may apply
for CDE certification as a single entity.
If an Applicant represents that it is
properly classified for Federal tax
purposes as multiple partnerships or
corporations, then it must submit a CDE
Certification Application for the
Applicant and each fund it would like
to participate in the NMTC Program,
and each fund must be separately
certified as a CDE. Applicants should
note, however, that receipt of CDE
certification as a single entity or as
multiple entities is not a determination
that an Applicant and its related funds
are properly classified as a single entity
or as multiple entities for Federal tax
purposes. Regardless of whether the
series of funds is classified as a single
partnership or corporation or as
multiple partnerships or corporations,
an Applicant may not transfer any
NMTC Allocations it receives to one or
more of its funds unless the fund is a
certified CDE that is a Subsidiary of the
Applicant, enjoined to the Allocation
Agreement as a Subsidiary Allocatee.
10. Entities that are Bank Enterprise
Award Program (BEA Program) award
recipients: An insured depository
institution investor (and its Affiliates
and Subsidiaries) may not receive an
NMTC Allocation in addition to a BEA
Program award for the same investment
in a CDE. Likewise, an insured
depository institution investor (and its
Affiliates and Subsidiaries) may not
receive a BEA Program award in
addition to an NMTC Allocation for the
same investment in a CDE.
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IV. Application and Submission
Information
A. Address to request application
package: Applicants must submit
applications electronically under this
NOAA, through the CDFI Fund’s AMIS.
Following the publication of this
NOAA, the CDFI Fund will make the
electronic Allocation Application
available on its website at https://
www.cdfifund.gov.
B. Application content requirements:
Detailed application content
requirements are found in the
application related to this NOAA.
Applicants must submit all materials
described in and required by the
application by the applicable deadlines.
Applicants will not be afforded an
opportunity to provide any missing
materials or documentation, except, if
necessary and at the request of the CDFI
Fund. Electronic applications must be
submitted solely by using the format
made available via AMIS. Additional
information, including instructions
relating to the submission of supporting
information (e.g., the Controlling
Entity’s representative signature page,
Assurances and Certifications
supporting documents, investor letters,
organizational charts), is set forth in
further detail in the CY 2022 NMTC
Application—AMIS Navigation Guide
for this Allocation Round. An
application must include a valid and
current Employer Identification Number
(EIN) issued by the Internal Revenue
Service (IRS) and assigned to the
Applicant and, if applicable, its
Controlling Entity. Electronic
applications without a valid EIN are
incomplete and cannot be transmitted to
the CDFI Fund. For more information on
obtaining an EIN, please contact the IRS
at (800) 829–4933 or www.irs.gov. Do
not include any personal Social Security
Numbers as part of the application.
C. NMTC Application Registration
(Application Registration): CY 2022
Allocation Round Applicants are first
required to complete and save the
Application Registration section of the
NMTC Allocation Application in AMIS
by the Application Registration deadline
in order to be able to submit the
remaining sections of the CY 2022
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
2022 Allocation Application in AMIS.
An Applicant may not submit more
than one application in response to this
NOAA. In addition, as stated in Section
III.A.8 of this NOAA, an Applicant and
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its Affiliates must collectively submit
only one Allocation Application; an
Applicant and its Affiliates may not
submit separate Allocation Applications
except as outlined in Section III.A.8
above. Once an application is
submitted, an Applicant will not be
allowed to change any element of its
application.
D. Form of application submission:
Applicants may only submit
applications under this NOAA
electronically via AMIS. Applications
and required attachments sent by mail,
facsimile, or email will not be accepted.
Submission of an electronic application
will facilitate the processing and review
of applications and the selection of
Allocatees; further, it will assist the
CDFI Fund in the implementation of
electronic reporting requirements.
Electronic applications must be
submitted solely by using the CDFI
Fund’s website and must be sent in
accordance with the submission
instructions provided in the CY 2022
NMTC Application—AMIS Navigation
Guide for this Allocation Round. AMIS
will only permit the submission of
applications in which all required
questions and tables are fully
completed. Additional information,
including instructions relating to the
submission of supporting information
(e.g., the Controlling Entity’s
representative signature page,
Assurances and Certifications
supporting documents, investor letters,
and organizational charts) is set forth in
further detail in the CY 2022 NMTC
Application—AMIS Navigation Guide
for this Allocation Round.
E. Application submission dates and
times: Electronic applications must be
received by the Allocation Application
deadline in Table 1. Electronic
applications cannot be transmitted or
received after Allocation Application
deadline in Table 1. In addition,
Applicants must electronically submit
supporting information (e.g., the
Controlling Entity’s representative
signature page, investor letters, and
organizational charts). The Controlling
Entity’s representative signature page,
investor letters, and organizational
charts must be submitted on or before
the Application deadline in Table 1. For
details, see the instructions provided in
the CY 2022 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.
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F. Intergovernmental Review: Not
applicable.
G. Funding Restrictions: For allowable
uses of investment proceeds related to
an NMTC Allocation, please see 26
U.S.C. 45D and the final regulations
issued by the Internal Revenue Service
(26 CFR 1.45D–1, published December
28, 2004 and as amended) and related
guidance. Please see Section I, above,
for the Programmatic Changes of this
NOAA.
H. Paperwork Reduction: Under the
Paperwork Reduction Act (44 U.S.C.
chapter 35), an agency may not conduct
or sponsor a collection of information,
and an individual is not required to
respond to a collection of information,
unless it displays a valid OMB control
number. Pursuant to the Paperwork
Reduction Act, the application has been
assigned the following control number:
1559–0016.
V. Application Review Information
A. Review and selection process: All
Allocation Applications will be
reviewed for eligibility and
completeness. To be complete, the
application must contain, at a
minimum, all information described as
required in the application form. An
incomplete application will be rejected.
Once the application has been
determined to be eligible and complete,
the CDFI Fund will conduct the
substantive review of each application
in two parts (Phase 1 and Phase 2) in
accordance with the criteria and
procedures generally described in this
NOAA and the Allocation Application.
In Phase 1, two reviewers will
evaluate and score the Business Strategy
and Community Outcomes sections of
each application. An Applicant must
exceed a minimum overall aggregate
base score threshold and exceed a
minimum aggregate section score
threshold in each scored section in
order to advance from the Phase 1 to the
Phase 2 part of the substantive review
process. In Phase 2, the CDFI Fund will
rank Applicants and determine the
dollar amount of allocation authority
awarded in accordance with the
procedures set forth below.
B. Criteria:
1. Business Strategy (25-point
maximum):
(a) When assessing an Applicant’s
business strategy, reviewers will
consider, among other things: the
Applicant’s products, services and
investment criteria; a pipeline of
potential business loans or investments
consistent with an Applicant’s request
for an NMTC Allocation; the prior
performance of the Applicant or its
Controlling Entity, particularly as it
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relates to making similar kinds of
investments as those it proposes to
make with the proceeds of QEIs; the
Applicant’s prior performance in
providing capital or technical assistance
to disadvantaged businesses or
communities; and the extent to which
the Applicant intends to make QLICIs in
one or more businesses in which
persons unrelated to the entity hold a
majority equity interest.
Under the Business Strategy criterion,
an Applicant will generally score well
to the extent that it will deploy debt or
investment capital in products or
services which are flexible or 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
describes the due diligence it will
conduct prior to making QLICIs to
determine whether a QALICB will
remain financially viable and
operational; (iii) it has a track record of
successfully deploying loans or equity
investments and providing services
similar to those it intends to provide
with the proceeds of QEIs; (iv) its
projected dollar volume of NMTC
Allocation deployment is supported by
its track record of deployment; and (v)
in the case of an Applicant proposing to
purchase loans from CDEs, the
Applicant will require the CDE selling
such loans to re-invest the proceeds of
the loan sale to provide additional
products and services to Low-Income
Communities.
(b) Priority Points: In addition, as
provided by IRC § 45D(f)(2), the CDFI
Fund will ascribe additional points to
entities that meet one or both of the
statutory priorities. First, the CDFI Fund
will give up to five additional points to
any Applicant that has a record of
having successfully provided capital or
technical assistance to disadvantaged
businesses or communities. Second, the
CDFI Fund will give five additional
points to any Applicant that intends to
satisfy the requirement of IRC
§ 45D(b)(1)(B) by making QLICIs in one
or more businesses in which persons
unrelated (within the meaning of IRC
§ 267(b) or IRC § 707(b)(1)) to an
Applicant (and the Applicant’s
Subsidiary CDEs, if the Subsidiary
Allocatee makes the QLICI) hold the
majority equity interest. Applicants may
earn points for one or both statutory
priorities. Thus, Applicants that meet
the requirements of both priority
categories can receive up to a total of ten
additional points. A record of having
successfully provided capital or
technical assistance to disadvantaged
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businesses or communities may be
demonstrated either by the past actions
of an Applicant itself or by its
Controlling Entity (e.g., where a new
CDE is established by a nonprofit
corporation with a history of providing
assistance to disadvantaged
communities). An Applicant that
receives additional points for intending
to make investments in unrelated
businesses and is awarded an NMTC
Allocation must meet the requirements
of IRC § 45D(b)(1)(B) by investing
substantially all of the proceeds from its
QEIs in unrelated businesses. The CDFI
Fund will include an Applicant’s
priority points when ranking Applicants
during Phase 2 of the review process, as
described below.
2. Community Outcomes (25-point
maximum): In assessing the potential
benefits to Low-Income Communities
that may result from the Applicant’s
proposed investments, reviewers will
consider, among other things, the degree
to which the Applicant is likely to: (i)
achieve significant and measurable
community development outcomes in
its Low-Income Communities; (ii) invest
in particularly economically distressed
markets including areas identified in the
Allocation Application; (iii) engage with
local communities regarding
investments; and (iv) involve
community representatives in the
governing board and/or advisory board
in approving investment criteria or
decisions.
An Applicant will generally score
well under this section to the extent
that, among other things: (a) it will
generate clear and well supported
community development outcomes; (b)
it has a track record of producing
quantitative and qualitative community
outcomes that are similar to those
projected to be achieved with an NMTC
Allocation; (c) it 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; and
(f) it ensures that an NMTC investment
into a project or business is supported
by and will be beneficial to Low-Income
Persons and residents of Low-Income
Communities.
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
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application, a reviewer’s total base score
or section score(s) (in one or more of the
two application scored sections) varies
significantly from the other reviewer’s
total base scores or section scores for
such application, the CDFI Fund may,
in its sole discretion, obtain the
evaluation and numeric scoring of an
additional third reviewer to determine
whether the anomalous score should be
replaced with the score of the additional
third reviewer.
2. Late Reports: In the case of an
Applicant or any Affiliates that have
previously received an award or NMTC
Allocation from the CDFI Fund through
any CDFI Fund program, the CDFI Fund
will deduct up to five points from the
Applicant’s rank score for the
Applicant’s (or its Affiliate’s) failure to
meet any of the reporting deadlines set
forth in any assistance, award or
Allocation Agreement(s), if the reporting
deadlines occurred during the period
from January 14, 2022 to the application
deadline in this NOAA.
3. Prior Year Allocatees: In the case of
Applicants (or their Affiliates) that are
prior year Allocatees, the CDFI Fund
will review the activities of the prior
year Allocatee to determine whether the
entity has: (a) effectively utilized its
prior-year NMTC Allocations in a
manner generally consistent with the
representations made in the relevant
Allocation Application (including, but
not limited to, the proposed product
offerings, business type, fees and
markets served (i.e. service area) and
notable relationships); (b) issued QEIs
and closed QLICIs in a timely manner;
and (c) substantiated a need for
additional NMTC Allocation authority.
The CDFI Fund will use this
information in determining whether to
reject or reduce the allocation award
amount of its NMTC Allocation
Application.
An Applicant will be evaluated more
favorably under Part V. of the
Application to the extent that it clearly
explains: (i) how it ensures that the
NMTCs allocated to QALICBs did not
exceed the amount necessary to assure
QALICB feasibility; (ii) the community
outcomes or benefits that were
generated as a result of the transaction;
(iii) source(s) and amount(s) of
leveraged debt from all sources; (iv) the
NMTC-related fees and third-party
expenses paid by the QALICB or the
QALICB’s Affiliates, including actions
taken to control expenses paid by
QALICBs and investors; and (v)
quantifies the value of the investment
acquired by the QALICBs at the end of
the seven-year credit period, to the
extent the Applicant’s past transactions
have been structured to allow QALICBs
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to acquire a portion of QLICIs at the end
of the seven-year credit period. An
Applicant will also be evaluated
favorably to the extent the activities
undertaken with the NMTC dollars are
consistent with the business strategy
presented in the relevant Allocation
Application (e.g. product offerings;
business type; fees and markets served;
notable relationships, etc.).
4. Management Capacity: In assessing
an Applicant’s management capacity,
the CDFI Fund will consider, among
other things, the current and planned
roles, as well as qualifications of the
Applicant’s (and Controlling Entity’s, if
applicable): principals; board members;
management team; and other essential
staff or contractors, with specific focus
on: experience in providing loans;
equity investments or financial
counseling and other services, including
activities similar to those described in
the Applicant’s business strategy; asset
management and risk management
experience; experience with fulfilling
compliance requirements of other
governmental programs, including other
tax credit programs; and the Applicant’s
(or its Controlling Entity’s) financial
health. CDFI Fund evaluators will also
consider the extent to which an
Applicant has protocols in place to
ensure ongoing compliance with NMTC
Program requirements and the
Applicant’s projected income and
expenses related to managing an NMTC
Allocation.
An Applicant will be generally
evaluated more favorably under this
section to the extent that its
management team or other essential
personnel have experience in: (a)
identifying and underwriting loans and/
or equity investments or providing
financial counseling and other services
in Low-Income Communities, if
applicable, particularly those likely to
be served with QLICIs from the
Applicant; (b) asset and risk
management; and (c) fulfilling
government compliance requirements,
particularly tax credit program
compliance. An Applicant will also be
evaluated favorably to the extent it
clearly explains its due diligence when
providing businesses with financing or
investment; demonstrates strong
financial health and a high likelihood of
remaining a going-concern, including
support from the Controlling Entity, if
applicable; it clearly explains its NMTC
fees as well as levels of income and
expenses; has policies and systems in
place to ensure portfolio quality,
ongoing compliance with NMTC
Program requirements; and, if it is a
Federally-insured financial institution,
has its most recent Community
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Reinvestment Act (CRA) rating as
‘‘outstanding.’’
5. Capitalization Strategy: When
assessing an Applicant’s capitalization
strategy, the CDFI Fund will consider,
among other things: the key personnel
of the Applicant (or Controlling Entity)
and their track record of raising capital,
particularly from for-profit investors;
the extent to which the Applicant has
secured investments or commitments to
invest in NMTC (if applicable), or
indications of investor interest
commensurate with its requested
amount of NMTC Allocations, or, if a
prior Allocatee, the track record of the
Applicant or its Affiliates in raising
Qualified Equity Investments in the past
five years; the Applicant’s strategy for
identifying additional investors, if
necessary, including the Applicant’s (or
its Controlling Entity’s) prior
performance with raising equity from
investors, particularly for-profit
investors; the distribution of the
economic benefits of the tax credit; and
the extent to which the Applicant
intends to invest the proceeds from the
aggregate amount of its QEIs at a level
that exceeds the requirements of IRC
§ 45D(b)(1)(B) and the IRS regulations.
An Applicant will be evaluated more
favorably under this section to the
extent that: (a) it or its Controlling
Entity demonstrate a track record of
raising investment capital; (b) it has
secured investor commitments, or has a
reasonable strategy for obtaining such
commitments, or, if it or its Affiliates is
a prior Allocatee with a track record in
the past five years of raising Qualified
Equity Investments and; (c) it generally
demonstrates that the economic benefits
of the tax credit will be passed through
to a QALICB; and (d) it intends to invest
the proceeds from the aggregate amount
of its QEIs at a level that exceeds the
requirements of IRC § 45D(b)(1)(B) and
the IRS regulations. In the case of an
Applicant proposing to raise investor
funds from organizations that also will
identify or originate transactions for the
Applicant or from Affiliated entities,
said Applicant will be evaluated more
favorably to the extent that it will offer
products with more favorable rates or
terms than those currently offered by its
investor(s) or Affiliated entities and/or
will target its activities to areas of
greater economic distress than those
currently targeted by the investor or
Affiliated entities.
6. Contacting Applicants: As a part of
the substantive review process, the CDFI
Fund may permit the NMTC Allocation
recommendation panel member(s) to
request information from Applicants for
the sole purpose of obtaining, clarifying
or confirming application information
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71415
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
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
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that meet the minimum scoring
thresholds will be advanced to Phase 2
review and will be provided with
‘‘preliminary’’ awards, in descending
order of final rank score, until the
available allocation authority is
fulfilled. Once these ‘‘preliminary’’
award amounts are determined, the
CDFI Fund will then analyze the
Allocatee pool to determine whether the
two Non-Metropolitan proportionality
objectives have been met.
The CDFI Fund will first examine the
‘‘preliminary’’ awards and Allocatees to
determine whether the percentage of
Allocatees that are Rural CDEs is, at a
minimum, equal to the percentage of
Applicants in the highly qualified pool
that are Rural CDEs. If this objective is
not achieved, the CDFI Fund will
provide awards to additional Rural
CDEs from the highly qualified pool, in
descending order of their final rank
score, until the appropriate percentage
balance is achieved. In order to
accommodate the additional Rural CDEs
in the Allocatee pool within the
available NMTC Allocation limitations,
a formula reduction may be applied as
uniformly as possible to the allocation
amount for all Allocatees in the pool
that have not committed to investing a
minimum of 20 percent of their QLICIs
in Non-Metropolitan counties.
The CDFI Fund will then determine
whether the pool of Allocatees will, in
the aggregate, invest at least 20 percent
of their QLICIs (as measured by dollar
amount) in Non-Metropolitan counties.
The CDFI Fund will first apply the
‘‘minimum’’ percentage of QLICIs that
Allocatees indicated in their
applications would be targeted to 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
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of QLICIs that they indicated would be
targeted to Non-Metropolitan counties,
the CDFI Fund may add additional
highly qualified Rural CDEs (in
descending order of final rank score) to
the Allocatee pool. In order to
accommodate any additional Allocatees
within the allocation limitations, a
formula reduction will be applied as
uniformly as possible, to the allocation
amount for all Allocatees in the pool
that have not committed to investing a
minimum of 20 percent of their QLICIs
in Non-Metropolitan counties.
E. Right of rejection: The CDFI Fund
reserves the right to reject any NMTC
Allocation Application in the case of a
prior CDFI Fund award recipient, if
such Applicant has failed to comply
with the terms, conditions, and other
requirements of the prior or existing
assistance or award agreement(s) with
the CDFI Fund or any other agreement
under any CDFI Fund program.
The CDFI Fund reserves the right to
reject any NMTC Allocation Application
in the case of a prior CDFI Fund
Allocatee, if such Applicant has failed
to comply with the terms, conditions,
and other requirements of its prior or
existing Allocation Agreement(s) with
the CDFI Fund.
The CDFI Fund reserves the right to
reject any NMTC Allocation Application
in the case of any Applicant, if an
Affiliate of the Applicant has failed to
meet the terms, conditions and other
requirements of any prior or existing
assistance agreement, award agreement,
Allocation Agreement, or any other
agreement under any CDFI Fund
program with the CDFI Fund.
The CDFI Fund reserves the right to
reject or reduce the allocation award
amount of any NMTC Allocation
Application in the case of a prior
Allocatee, if such Applicant has failed
to use its prior NMTC Allocation(s) in
a manner that is generally consistent
with the business strategy (including,
but not limited to, the proposed product
offerings, business type, fees, markets
served (i.e. service area), and notable
relationships) set forth in the Allocation
Application(s) related to such prior
NMTC Allocation(s) or such Applicant
has been found by the IRS to have
engaged in a transaction or series of
transactions designed to achieve a result
that is inconsistent with the purposes of
IRC § 45D. The CDFI Fund also reserves
the right to reject or reduce the
allocation award amount of any NMTC
Allocation Application in the case of an
Affiliate of the Applicant that is a prior
Allocatee and has failed to use its prior
NMTC Allocation(s) in a manner that is
generally consistent with the business
strategy (including, but not limited to,
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the proposed product offerings, business
type, fees, markets served (i.e., service
area), and notable relationships) set
forth in the Allocation Application(s)
related to such prior NMTC
Allocation(s) or has been found by the
IRS to have engaged in a transaction or
series of transactions designed to
achieve a result that is inconsistent with
the purposes of IRC § 45D.
The CDFI Fund reserves the right to
reject an NMTC Allocation Application
if information (including, but not
limited to, administrative errors;
submission of inaccurate information; or
omission of information) comes to the
attention of the CDFI Fund that
adversely affects an Applicant’s
eligibility for an award, adversely affects
the CDFI Fund’s evaluation or scoring of
an application, adversely affects the
CDFI Fund’s prior determinations of
CDE certification, or indicates fraud or
mismanagement on the part of an
Applicant, its Affiliate(s), or the
Controlling Entity, if such fraud or
mismanagement by the Affiliate(s) or
Controlling Entity would hinder the
Applicant’s ability to perform under the
Allocation Agreement. If the CDFI Fund
determines that any portion of the
application is incorrect in any material
respect, the CDFI Fund reserves the
right, in its sole discretion, to reject the
application.
The CDFI Fund reserves the right to
reject any NMTC Allocation Application
if additional information is obtained
that, after further due diligence and in
the discretion of the CDFI Fund, would
hinder the Applicant’s ability to
effectively perform under the Allocation
Agreement. In the case of Applicants (or
the Controlling Entity, or Affiliates) that
are regulated or receive oversight by the
Federal government or a state agency (or
comparable entity), the CDFI Fund may
request additional information from the
Applicant regarding Assurances and
Certifications or other information about
the ability of the Applicant to effectively
perform under the Allocation
Agreement. The NMTC Allocation
recommendation panel or selecting
official(s) reserve(s) the right to consult
with and take into consideration the
views of the appropriate Federal
banking and other regulatory agencies.
In the case of Applicants (or Affiliates
of Applicants) that are also Small
Business Investment Companies,
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
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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 2022 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
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
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CDFI Fund’s NMTC Allocation
decisions are final.
VI. Award Administration Information
A. Allocation Award Compliance:
1. Failure to meet reporting
requirements: If an Allocatee, or an
Affiliate of an Allocatee, is a prior CDFI
Fund award recipient or Allocatee
under any CDFI Fund program and is
not current on the reporting
requirements set forth in the previously
executed assistance, allocation, or
award agreement(s) or any other
agreement under any CDFI Fund
program as of the date the CDFI Fund
provides notification of an NMTC
Allocation award or thereafter, the CDFI
Fund reserves the right, in its sole
discretion, to reject the application,
delay entering into an Allocation
Agreement, and/or impose limitations
on an Allocatee’s ability to issue QEIs to
investors until said prior award
recipient or Allocatee is current on the
reporting requirements in the previously
executed assistance, allocation, or
award agreement(s) or any other
agreement under any CDFI Fund
program. Please note that the automated
systems the CDFI Fund uses for receipt
of reports submitted electronically
typically acknowledges only a report’s
receipt; such an acknowledgment does
not warrant that the report received was
complete and therefore met reporting
requirements.
2. Pending determination of
noncompliance or default: If an
Allocatee is a prior award recipient or
Allocatee under any CDFI Fund
program and if: (i) it has demonstrated
noncompliance with a previous
assistance or award agreement or a
default under an Allocation Agreement
or any other agreement under any CDFI
Fund program; and (ii) the entity has
been given a timeframe to cure the
noncompliance or default, the CDFI
Fund reserves the right, in its sole
discretion, to delay entering into an
Allocation Agreement and/or to impose
limitations on the Allocatee’s ability to
issue QEIs to investors, during the time
period given for the entity to cure the
noncompliance or default and until
such time as the CDFI Fund makes a
final determination that the entity is in
noncompliance or default, and
determination of remedies, if applicable,
in the sole determination of the CDFI
Fund. Further, if an Affiliate of an
Allocatee is a prior CDFI Fund award
recipient or Allocatee and if such entity:
(i) has demonstrated noncompliance
under a previous assistance or award
agreement or default under a previous
Allocation Agreement or any other
agreement under any CDFI Fund
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Sfmt 4703
71417
program; and (ii) the entity has been
given a timeframe to cure the
noncompliance or default, the CDFI
Fund reserves the right, in its sole
discretion, to delay entering into an
Allocation Agreement and/or to impose
limitations on the Allocatee’s ability to
issue QEIs to investors, during the time
period given for the entity to cure the
noncompliance or default and until
such time as the CDFI Fund makes a
final determination that the entity is in
noncompliance or default, and
determination of remedies, if applicable,
in the sole determination of the CDFI
Fund. If the prior award recipient,
Allocatee or Affiliate of the Allocatee in
question is unable to satisfactorily
resolve the issues of noncompliance or
default, in the sole determination of the
CDFI Fund, the CDFI Fund reserves the
right, in its sole discretion, to terminate
and rescind the award notification made
under this NOAA.
3. Determination of noncompliance or
default status: If prior to entering into
an Allocation Agreement through this
NOAA, the CDFI Fund has made a final
determination that an Allocatee that is
a prior CDFI Fund award recipient or
Allocatee under any CDFI Fund
program is (i) noncompliant with a
previously executed assistance or award
agreement, or is in default of a
previously executed Allocation
Agreement or any other agreement
under any CDFI Fund program; (ii) the
CDFI Fund has provided written
notification of such determination to
such organization; and (iii) the
noncompliance or default occurs during
the time period beginning 12 months
prior to the application deadline and
ending with the execution of the CY
2022 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) or any other
agreement under any CDFI Fund
program; (ii) the CDFI Fund has
provided written notification of such
determination to such organization; and
(iii) the default occurs during the time
period beginning 12 months prior to the
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application deadline and ending with
the execution of the CY 2022 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
investments discussed by the Allocatee
in its Allocation Application; (v) the
time period by which the Allocatee may
obtain QEIs from investors; (vi)
reporting requirements for the
Allocatee; and (vii) a requirement to
maintain certification as a CDE
throughout the term of the Allocation
Agreement. If an Allocatee represented
in its NMTC Allocation Application that
it intends to invest substantially all of
the proceeds from its investors in
businesses in which persons unrelated
to the Allocatee hold a majority equity
interest, the Allocation Agreement will
contain a covenant to that effect.
In addition to entering into an
Allocation Agreement, each Allocatee
must furnish to the CDFI Fund an
opinion from its legal counsel or a
similar certification, the content of
which will be further specified in the
Allocation Agreement, to include,
among other matters, an opinion that an
Allocatee (and its Subsidiary Allocatees,
if any): (i) is duly formed and in good
standing in the jurisdiction in which it
was formed and the jurisdiction(s) in
which it operates; (ii) has the authority
to enter into the Allocation Agreement
and undertake the activities that are
specified therein; (iii) has no pending or
threatened litigation that would
materially affect its ability to enter into
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and carry out the activities specified in
the Allocation Agreement; and (iv) is
not in default of its articles of
incorporation, bylaws or other
organizational documents, or any
agreements with the Federal
government.
If an Allocatee identifies Subsidiary
Allocatees, the CDFI Fund reserves the
right to require an Allocatee to provide
supporting documentation evidencing
that it Controls such entities prior to
entering into an Allocation Agreement
with the Allocatee and its Subsidiary
Allocatees. The CDFI Fund reserves the
right, in its sole discretion, to rescind its
NMTC Allocation award if the Allocatee
fails to return the Allocation Agreement,
signed by the authorized representative
of the Allocatee, and/or provide the
CDFI Fund with any other requested
documentation, including an approved
legal opinion, within the deadlines set
by the CDFI Fund.
C. Fees: The CDFI Fund reserves the
right, in accordance with applicable
Federal law and, if authorized, to charge
allocation reservation and/or
compliance monitoring fees to all
entities receiving NMTC Allocations.
Prior to imposing any such fee, the CDFI
Fund will publish additional
information concerning the nature and
amount of the fee.
D. Reporting: The CDFI Fund will
collect information, on at least an
annual basis from all Allocatees and/or
CDEs that are recipients of QLICIs,
including such audited financial
statements and opinions of counsel as
the CDFI Fund deems necessary or
desirable, in its sole discretion. The
CDFI Fund will require the Allocatee to
retain information as the CDFI Fund
deems necessary or desirable and shall
provide such information to the CDFI
Fund when requested to monitor each
Allocatee’s compliance with the
provisions of its Allocation Agreement
and to assess the impact of the NMTC
Program in Low-Income Communities.
The CDFI Fund may also provide such
information to the IRS in a manner
consistent with IRC § 6103 so that the
IRS may determine, among other things,
whether the Allocatee has used
substantially all of the proceeds of each
QEI raised through its NMTC Allocation
to make QLICIs. The Allocation
Agreement shall further describe the
Allocatee’s reporting requirements.
The CDFI Fund reserves the right, in
its sole discretion, to modify these
reporting requirements if it determines
it to be appropriate and necessary;
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however, such reporting requirements
will be modified only after due notice
to Allocatees.
VII. Agency Contacts
The CDFI Fund will provide
programmatic and information
technology support related to the
Allocation Application Mondays
through Fridays, between the hours of
9:00 a.m. and 5:00 p.m. ET through the
last day to contact the CDFI Fund. The
CDFI Fund will not respond to phone
calls emails, or Service Requests in
AMIS concerning the application that
are received after the last day to contact
the CDFI Fund. The CDFI Fund will
respond to such phone calls, emails, or
Service Requests in AMIS after the
Allocation Application deadline in
Table 1. Applications and other
information regarding the CDFI Fund
and its programs may be obtained from
the CDFI Fund’s website at https://
www.cdfifund.gov. The CDFI Fund will
post on its website responses to
questions of general applicability
regarding the NMTC Program.
A. Information technology support:
Technical support can be obtained by
calling (202) 653–0422 or by submitting
a Service Request in AMIS. People who
have visual or mobility impairments
that prevent them from accessing the
Low-Income Community maps using the
CDFI Fund’s website should call (202)
653–0422 for assistance. These are not
toll free numbers.
B. Programmatic support: If you have
any questions about the programmatic
requirements of this NOAA, contact the
CDFI Fund’s NMTC Program Manager
by submitting a Service Request in
AMIS; or by telephone at (202) 653–
0421. These are not toll free numbers.
C. Administrative support: If you have
any questions regarding the
administrative requirements of this
NOAA, contact the CDFI Fund’s NMTC
Program Manager by submitting a
Service Request in AMIS, or by
telephone at (202) 653–0421. These are
not toll free numbers.
D. IRS support: For questions
regarding the tax aspects of the NMTC
Program, contact James Holmes and
Dillon Taylor, Office of the Chief
Counsel (Passthroughs and Special
Industries), IRS, by telephone at (202)
317–4137, or by facsimile at (855) 591–
7867. These are not toll free numbers.
Applicants wishing for a formal ruling
request should see IRS Internal Revenue
Bulletin 2020–1, issued January 4, 2020.
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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. 2022–25116 Filed 11–21–22; 8:45 am]
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]]>Agencies
[Federal Register Volume 87, Number 224 (Tuesday, November 22, 2022)]
[Notices]
[Pages 71409-71419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25116]
[[Page 71409]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Funding Opportunity Title: Notice of Allocation Availability
(NOAA) Inviting Applications for the Calendar Year (CY) 2022 Allocation
Round of the New Markets Tax Credit (NMTC) Program
Announcement type: Announcement of NMTC Allocation availability.
Dates:
Table 1--CY 2022 Allocation Round NMTC Program Critical Deadlines for Applicants
----------------------------------------------------------------------------------------------------------------
Time (eastern time--
Description Deadline/date ET) Submission method
----------------------------------------------------------------------------------------------------------------
Community Development Entity (CDE) December 2, 2022....... 11:59 p.m. ET.......... Electronically via the
Certification Application. Awards Management
Information System
(AMIS).
Request to modify CDE certification December 2, 2022....... 11:59 p.m. ET.......... Electronically via
service area. AMIS.
Subsidiary CDE Certification December 2, 2022....... 11:59 p.m. ET.......... Electronically via
Application for meeting Qualified AMIS.
Equity Investment (QEI) issuance
thresholds.
CY 2022 Application Registration..... December 15, 2022...... 5:00 p.m. ET........... Electronically via
AMIS.
Last date to contact CDFI Fund staff. January 24, 2023....... 5:00 p.m. ET........... Electronically via
AMIS.
CY 2022 Allocation Application January 26, 2023....... 5:00 p.m. ET........... Electronically via
(including required Attachments). AMIS.
Amendment request to add Subsidiary March 6, 2023.......... 11:59 p.m. ET.......... Electronically via
CDEs to Allocation Agreements for AMIS.
meeting QEI issuance thresholds.
Amendment request to remove a March 6, 2023.......... 11:59 p.m. ET.......... Electronically via
Controlling Entity from Allocation AMIS.
Agreement(s).
QEI Issuance and making Qualified Low May 4, 2023............ 11:59 p.m. ET.......... Not Applicable.
Income Community Investments
(QLICIs) by.
Report QEIs and certify QLICIs by.... May 11, 2023........... 11:59 p.m. ET.......... Electronically via
AMIS.
----------------------------------------------------------------------------------------------------------------
Executive Summary: This NOAA is issued in connection with the CY
2022 allocation round (Allocation Round) of the New Markets Tax Credit
Program (NMTC Program), as authorized by Title I, subtitle C, section
121 of the Community Renewal Tax Relief Act of 2000 (Pub. L. 106-554)
as amended. Through the NMTC Program, the Community Development
Financial Institutions Fund (CDFI Fund) provides authority to certified
CDEs to offer an incentive to investors in the form of tax credits over
seven years, which is expected to stimulate the provision of private
investment capital that, in turn, will facilitate economic and
community development in Low-Income Communities. Through this NOAA, the
CDFI Fund announces the availability of $5 billion of NMTC Allocation
authority in this Allocation Round. In this NOAA, the CDFI Fund
specifically addresses how a CDE may apply to receive an allocation of
NMTCs, the competitive procedure through which NMTC Allocations will be
made, and the actions that will be taken to ensure that proper
allocations are made to appropriate entities.
I. Allocation Availability Description
A. Programmatic changes from the CY 2021 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 2021 NOAA. See
Section III. A.5(a) of this NOAA for additional details.
II. Allocation Information
A. Allocation amounts: Pursuant to the Taxpayer Certainty and
Disaster Tax Relief Act of 2020, the CDFI Fund expects that it may
allocate to CDEs the authority to issue to their investors the
aggregate amount of $5 billion in equity as to which NMTCs may be
claimed, as permitted under IRC 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.
[[Page 71410]]
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.B of this NOAA.
E. Statutory and national policy requirements: The CDFI Fund will
manage and administer the NMTC Program in a manner so as to ensure that
NMTC Allocations associated programs are implemented in full accordance
with the U.S. Constitution, Federal Law, statutory, and public policy
requirements: including, but not limited to, those protecting free
speech; religious liberty; public welfare; the environment; and
prohibiting discrimination.
III. Eligibility
A. Eligible Applicants: IRC 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 AMIS by the deadline in
Table 1. Applicants for CDE certification may obtain information
regarding CDE certification and the CDE Certification Application
process in AMIS on the CDFI Fund's website at https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx.
The CDFI Fund will not provide NMTC Allocation authority to
Applicants that are not certified as CDEs or to entities that are
certified as Subsidiary CDEs.
If an Applicant that has already been certified as a CDE wishes to
change its designated CDE Service Area for this Allocation Round, then
it must submit a CDE Service Area Amendment Application to request such
a change from the CDFI Fund, and the application must be received by
the CDFI Fund by the deadline listed in Table 1. A request to change a
CDE's Service Area will need to include the revised service area
designation and updated accountability information that demonstrates
that the CDE has the required representation from Low-Income
Communities in the revised CDE Service Area.
2. Repayment or Refinancing of QEI with QLICI Proceeds: An
applicant must commit that it will not permit the use of the proceeds
of QEIs to make QLICIs in Qualified Active Low-Income Community
Businesses (QALICBs) where QLICI proceeds are used, in whole or in
part, to repay or refinance a debt or equity provider whose capital was
used to fund the QEI, or are used to repay or refinance any Affiliate
of such a debt or equity provider, except where: (i) the QLICI proceeds
are used to repay or refinance documented reasonable expenditures that
are directly attributable to the qualified business of the QALICB, and
such reasonable expenditures were incurred no more than 24 months prior
to the QLICI closing date; or (ii) no more than five percent of the
total QLICI proceeds from the QEI are used to repay or refinance
documented reasonable expenditures that are directly attributable to
the qualified business of the QALICB. Refinance includes transferring
cash or property, directly or indirectly, to the debt or equity
provider or an Affiliate of the debt or equity provider.
3. Do Not Pay: The CDFI Fund will contact the Do Not Pay Business
Center to ensure that an Applicant, its Controlling Entity, and any
Affiliate(s) are not prohibited from receiving federal funds. An
Applicant, its Controlling Entity, and any Affiliate(s) reported by the
Do Not Pay Business Center as having a pending or delinquent debt to
the Federal government will be required to demonstrate that it has
resolved such pending or delinquent debt. Applicants that fail to
demonstrate resolution of such pending or delinquent debt to the
Federal government will be found ineligible to receive an allocation.
4. Controlling Entities: An organization that was a Controlling
Entity to an Allocatee in a prior round(s) and subsequently separated
from that Allocatee, as a result of an amendment to the Allocation
Agreement(s), may not claim the NMTC-related track record of such
Allocatee.
5. Prior award recipients or Allocatees: Applicants must be aware
that success in a prior application or allocation round of any of the
CDFI Fund's programs is not indicative of success under this NOAA. For
purposes of this NOAA, and eligibility determinations, the CDFI Fund
will consider an Affiliate to be any entity that meets the definition
of Affiliate as defined in the NMTC Allocation Application materials,
or any entity otherwise identified as an Affiliate by the Applicant in
its NMTC Allocation Application materials.
Prior award recipients of any CDFI Fund program are eligible to
apply under this NOAA, except as follows:
(a) Prior Allocatees and Qualified Equity Investment (QEI) issuance
and Qualified Low Income Community Investment (QLICI) requirements:
CDEs that are Allocatees under the CY 2017 to the CY 2021 rounds must
finalize at least the percentage of QEIs noted in Table 2 for each NMTC
Allocation round and use at least the percentage of those QEIs
designated in Schedule 1, section 3.2(j) of their Allocation Agreements
to make QLICIs by the deadline in Table 1. CDEs that are Allocatees
under the CY 2017 to the CY 2021 allocation rounds and CDEs that are
Allocatees designated as Rural CDEs in their CY 2021 Allocation
Agreement must meet the following thresholds.
[[Page 71411]]
Table 2--QEI Issuance and QLICI Requirements
----------------------------------------------------------------------------------------------------------------
Rural CDE
Finalized QEI finalized QEI
Prior round allocation requirement requirement QLICIs
(percent) (percent)
----------------------------------------------------------------------------------------------------------------
CY 2017.................................. 100 100 As stated in Schedule 1, Section
3.2(j) of the applicable
Allocation Agreement.
CY 2018.................................. 90 90
CY 2019.................................. 70 70
CY 2020.................................. 40 40
CY 2021.................................. 20 0
----------------------------------------------------------------------------------------------------------------
In addition to the requirements noted above, a CDE is not eligible
to receive an NMTC Allocation pursuant to this NOAA if an Affiliate of
the Applicant is a prior Allocatee and has not met the minimum QEI
issuance and QLICI thresholds as set forth in Table 2 for Allocatees in
the prior allocation rounds of the NMTC Program.
For purposes of this section of the NOAA, the CDFI Fund will only
recognize as ``finalized'' those QEIs that have been properly reported
in AMIS Allocation and QEI Tracking System for Qualified Equity
Investments (AQEIs) by the deadline in Table 1. Allocatees and their
Subsidiary Allocatees, if any, are advised to access AMIS to record
each QEI that they issue to an investor in exchange for cash.
Furthermore, the CDFI Fund will only recognize QLICIs that have been
certified in AMIS by the deadline in Table 1. Instructions on recording
a QEI and QLICIs in AMIS are available at https://www.cdfifund.gov/amisreporting. Applicants may be required, upon notification from the
CDFI Fund, to submit documentation to substantiate the required QEI
issuance and QLICI thresholds.
Any prior Allocatee that requires action by the CDFI Fund (i.e.,
certifying a subsidiary entity as a CDE; adding a subsidiary CDE to an
Allocation Agreement; etc.) in order to meet the QEI issuance
requirements above must submit a CDE Certification Application for
Subsidiary CDEs and/or Allocation Agreement amendment requests by the
respective deadlines in Table 1, in order to guarantee that the CDFI
Fund completes all necessary approvals prior to the QEI issuance
deadline in Table 1. Applicants for Subsidiary CDE certification may
obtain information regarding CDE certification and the CDE
Certification Application process in AMIS on the CDFI Fund's website at
https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx.
(b) Pending determination of noncompliance or default: If an
Applicant is a prior award recipient or Allocatee under any CDFI Fund
program and if: (i) it has demonstrated noncompliance with a previous
assistance or award agreement or default under a previous Allocation
Agreement or pursuant to any other agreement under any CDFI Fund
program; and (ii) the entity has been given a timeframe to cure the
noncompliance or default, the CDFI Fund will consider the Applicant's
application under this NOAA during the time period given for the entity
to cure the noncompliance or default, and until such time as the CDFI
Fund makes a final determination that the entity is in noncompliance or
default. Further, if an Affiliate of the Applicant is a prior CDFI Fund
award recipient or Allocatee and if such entity: (i) has demonstrated
noncompliance with a previous assistance or award agreement or default
under a previous Allocation Agreement or pursuant to any other
agreement under any CDFI Fund program; and (ii) the entity has been
given a timeframe to cure the noncompliance or default, then the CDFI
Fund will consider the Applicant's application under this NOAA during
the time period given for the entity to cure the noncompliance or
default, and until such time as the CDFI Fund makes a final
determination that the entity is in noncompliance or default.
(c) Noncompliance or default status: The CDFI Fund will not
consider an application submitted by an Applicant that is a prior CDFI
Fund award recipient or Allocatee under any CDFI Fund program if, as of
the application deadline of this NOAA: (i) the CDFI Fund has made a
final determination that such Applicant is noncompliant with a
previously executed assistance or award agreement, or in default of a
previously executed Allocation Agreement or any other agreement under
any CDFI Fund program; and (ii) the CDFI Fund has provided written
notification of such final determination to the Applicant; and (iii)
the default occurs during the time period beginning 12 months prior to
the application deadline and ending with the CY 2022 allocation award
announcement. Further, the CDFI Fund will not consider an application
submitted by an Applicant with an Affiliate that is a prior award
recipient or Allocatee under any CDFI Fund Program if, as of the
application deadline of this NOAA: (i) the CDFI Fund has made a final
determination that such Affiliate is noncompliant with a previously
executed assistance or award agreement, or in default of a previously
executed Allocation Agreement or any other agreement under any CDFI
Fund program; (ii) the CDFI Fund has provided written notification of
such final determination to the Affiliate; and (iii) the noncompliance
or default occurs during the time period beginning 12 months prior to
the application deadline and ending with the CY 2022 allocation award
announcement.
(d) Contacting the CDFI Fund: Accordingly, Applicants that are
prior award recipients and/or Allocatees under any CDFI Fund program
are advised to comply with the requirements specified in assistance,
allocation and/or award agreement(s). All outstanding reports and
compliance questions should be directed to the Office of Compliance
Monitoring and Evaluation (OCME) through a Service Request initiated in
AMIS. Requests submitted less than 30 calendar days prior to the
application deadline may not receive a response before the application
deadline.
The CDFI Fund will respond to Applicants' reporting, compliance and
CDE certification inquiries Monday through Friday, between the hours of
9:00 a.m. and 5:00 p.m. ET, starting the date of publication of this
NOAA through the ``Last date to contact CDFI Fund staff'' specified in
Table 1. Inquiries received after the ``Last date to contact the CDFI
Fund staff'' will be responded to after the Allocation Application
deadline.
6. Failure to accurately respond to a question in the Assurances
and Certifications section of the application, submit the required
written explanation, or provide any updates: In its sole discretion,
the CDFI Fund may deem the
[[Page 71412]]
Applicant's application ineligible, if the CDFI Fund determines that
the Applicant inaccurately responded to a question, accurately
responded to a question, but failed to submit a required written
explanation, or failed to notify the CDFI Fund of any changes to the
information submitted between the date of application and the date the
Allocatee executes the Allocation Agreement, with respect to the
Assurances and Certifications. In making this determination, the CDFI
Fund will take into consideration, among other factors, the materiality
of the question, the substance of any supplemental responses provided,
and whether the information in the Applicant's supplemental responses
would have a material adverse effect on the Applicant, its financial
condition or its ability to perform under an Allocation Agreement,
should the Applicant receive an allocation.
7. Entities that propose to transfer NMTCs to Subsidiary CDEs: Both
for-profit and non-profit CDEs may apply for NMTC Allocation authority,
but only a for-profit CDE is permitted to provide NMTCs to its
investors. A non-profit Applicant wishing to apply for an NMTC
Allocation must demonstrate, prior to entering into an Allocation
Agreement with the CDFI Fund, that: (i) it controls one or more
Subsidiary CDEs that are for-profit entities; and (ii) it intends to
transfer the full amount of any NMTC Allocation it receives to said
Subsidiary CDEs.
An Applicant wishing to transfer all or a portion of its NMTC
Allocation to a Subsidiary CDE is not required to create the Subsidiary
prior to submitting an NMTC Allocation Application to the CDFI Fund.
However, the Subsidiary entities must be certified as CDEs by the CDFI
Fund, and enjoined as parties to the Allocation Agreement at closing or
by amendment to the Allocation Agreement after closing.
The CDFI Fund requires a non-profit Applicant to submit a CDE
Certification Application to the CDFI Fund on behalf of at least one
for-profit Subsidiary within 45 days after the non-profit Applicant
receives notification from the CDFI Fund of its allocation award, as
such Subsidiary must be certified as a CDE prior to entering into an
Allocation Agreement with the CDFI Fund. The CDFI Fund reserves the
right to rescind the award if a non-profit Applicant that does not
already have a certified for-profit Subsidiary CDE fails to submit a
CDE Certification Application for one or more for-profit Subsidiaries
within 45 days of the date it receives notification from the CDFI Fund
of its allocation award.
8. Entities that submit applications together with Affiliates;
applications from common enterprises:
(a) As part of the Allocation Application review process, the CDFI
Fund will evaluate whether Applicants are Affiliates, as such term is
defined in the Allocation Application. If an Applicant and its
Affiliate(s) wish to submit Allocation Applications, they must do so
collectively, in one application; an Applicant and its Affiliate(s) may
not submit separate Allocation Applications. If Affiliated entities
submit multiple applications, the CDFI Fund will reject all such
applications received, except for those state-owned or state-controlled
governmental Affiliated entities. In the case of state-owned or state-
controlled governmental entities, the CDFI Fund may accept applications
submitted by different government bodies within the same state, but
only to the extent the CDFI Fund determines that the business
strategies and/or activities described in such applications, submitted
by separate entities, are distinctly dissimilar and/or are operated
and/or managed by distinctly dissimilar personnel, including staff,
board members and identified consultants. In such cases, the CDFI Fund
reserves the right to limit award amounts to such entities to ensure
that the entities do not collectively receive more than the $100
million cap.
If the CDFI Fund determines that the applications submitted by
different government bodies in the same state are not distinctly
dissimilar and/or operated and/or managed by distinctly dissimilar
personnel, it will reject all such applications.
(b) For purposes of this NOAA, the CDFI Fund will also evaluate
whether each Applicant is operated or managed as a ``common
enterprise'' with another Applicant in this Allocation Round using the
following indicia, among others: (i) whether different Applicants have
the same individual(s), including the Authorized Representative, staff,
board members and/or consultants, involved in day-to-day management,
operations and/or investment responsibilities; (ii) whether the
Applicants have business strategies and/or proposed activities that are
so similar or so closely related that, in fact or effect, they may be
viewed as a single entity; and/or (iii) whether the applications
submitted by separate Applicants contain significant narrative, textual
or other similarities such that they may, in fact or effect, be viewed
as substantially identical applications. In such cases, the CDFI Fund
will reject all applications received from such entities.
(c) Furthermore, an Applicant that receives an NMTC Allocation in
this Allocation Round (or its Subsidiary Allocatee) may not become an
Affiliate of or member of a common enterprise (as defined above) with
another Applicant that receives an NMTC Allocation in this Allocation
Round (or its Subsidiary Allocatee) at any time after the submission of
an Allocation Application under this NOAA. This prohibition, however,
generally does not apply to entities that are commonly controlled
solely because of common ownership by QEI investors. This requirement
will also be a term and condition of the Allocation Agreement (see
Section VI.B of this NOAA and additional application guidance materials
on the CDFI Fund's website at https://www.cdfifund.gov for more
details).
9. Entities created as a series of funds: An Applicant whose
business structure consists of an entity with a series of funds must
apply for CDE certification for each fund. If such an Applicant
represents that it is properly classified for Federal tax purposes as a
single partnership or corporation, it may apply for CDE certification
as a single entity. If an Applicant represents that it is properly
classified for Federal tax purposes as multiple partnerships or
corporations, then it must submit a CDE Certification Application for
the Applicant and each fund it would like to participate in the NMTC
Program, and each fund must be separately certified as a CDE.
Applicants should note, however, that receipt of CDE certification as a
single entity or as multiple entities is not a determination that an
Applicant and its related funds are properly classified as a single
entity or as multiple entities for Federal tax purposes. Regardless of
whether the series of funds is classified as a single partnership or
corporation or as multiple partnerships or corporations, an Applicant
may not transfer any NMTC Allocations it receives to one or more of its
funds unless the fund is a certified CDE that is a Subsidiary of the
Applicant, enjoined to the Allocation Agreement as a Subsidiary
Allocatee.
10. Entities that are Bank Enterprise Award Program (BEA Program)
award recipients: An insured depository institution investor (and its
Affiliates and Subsidiaries) may not receive an NMTC Allocation in
addition to a BEA Program award for the same investment in a CDE.
Likewise, an insured depository institution investor (and its
Affiliates and Subsidiaries) may not receive a BEA Program award in
addition to an NMTC Allocation for the same investment in a CDE.
[[Page 71413]]
IV. Application and Submission Information
A. Address to request application package: Applicants must submit
applications electronically under this NOAA, through the CDFI Fund's
AMIS. Following the publication of this NOAA, the CDFI Fund will make
the electronic Allocation Application available on its website at
https://www.cdfifund.gov.
B. Application content requirements: Detailed application content
requirements are found in the application related to this NOAA.
Applicants must submit all materials described in and required by the
application by the applicable deadlines. Applicants will not be
afforded an opportunity to provide any missing materials or
documentation, except, if necessary and at the request of the CDFI
Fund. Electronic applications must be submitted solely by using the
format made available via AMIS. Additional information, including
instructions relating to the submission of supporting information
(e.g., the Controlling Entity's representative signature page,
Assurances and Certifications supporting documents, investor letters,
organizational charts), is set forth in further detail in the CY 2022
NMTC Application--AMIS Navigation Guide for this Allocation Round. An
application must include a valid and current Employer Identification
Number (EIN) issued by the Internal Revenue Service (IRS) and assigned
to the Applicant and, if applicable, its Controlling Entity. Electronic
applications without a valid EIN are incomplete and cannot be
transmitted to the CDFI Fund. For more information on obtaining an EIN,
please contact the IRS at (800) 829-4933 or www.irs.gov. Do not include
any personal Social Security Numbers as part of the application.
C. NMTC Application Registration (Application Registration): CY
2022 Allocation Round Applicants are first required to complete and
save the Application Registration section of the NMTC Allocation
Application in AMIS by the Application Registration deadline in order
to be able to submit the remaining sections of the CY 2022 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
2022 Allocation Application in AMIS.
An Applicant may not submit more than one application in response
to this NOAA. In addition, as stated in Section III.A.8 of this NOAA,
an Applicant and its Affiliates must collectively submit only one
Allocation Application; an Applicant and its Affiliates may not submit
separate Allocation Applications except as outlined in Section III.A.8
above. Once an application is submitted, an Applicant will not be
allowed to change any element of its application.
D. Form of application submission: Applicants may only submit
applications under this NOAA electronically via AMIS. Applications and
required attachments sent by mail, facsimile, or email will not be
accepted. Submission of an electronic application will facilitate the
processing and review of applications and the selection of Allocatees;
further, it will assist the CDFI Fund in the implementation of
electronic reporting requirements.
Electronic applications must be submitted solely by using the CDFI
Fund's website and must be sent in accordance with the submission
instructions provided in the CY 2022 NMTC Application--AMIS Navigation
Guide for this Allocation Round. AMIS will only permit the submission
of applications in which all required questions and tables are fully
completed. Additional information, including instructions relating to
the submission of supporting information (e.g., the Controlling
Entity's representative signature page, Assurances and Certifications
supporting documents, investor letters, and organizational charts) is
set forth in further detail in the CY 2022 NMTC Application--AMIS
Navigation Guide for this Allocation Round.
E. Application submission dates and times: Electronic applications
must be received by the Allocation Application deadline in Table 1.
Electronic applications cannot be transmitted or received after
Allocation Application deadline in Table 1. In addition, Applicants
must electronically submit supporting information (e.g., the
Controlling Entity's representative signature page, investor letters,
and organizational charts). The Controlling Entity's representative
signature page, investor letters, and organizational charts must be
submitted on or before the Application deadline in Table 1. For
details, see the instructions provided in the CY 2022 NMTC
Application--AMIS Navigation Guide for this Allocation Round on the
CDFI Fund's website.
Applications and other required documents received after this date
and time will be rejected. Please note that the document submission
deadlines in this NOAA and/or the Allocation Application are strictly
enforced.
F. Intergovernmental Review: Not applicable.
G. Funding Restrictions: For allowable uses of investment proceeds
related to an NMTC Allocation, please see 26 U.S.C. 45D and the final
regulations issued by the Internal Revenue Service (26 CFR 1.45D-1,
published December 28, 2004 and as amended) and related guidance.
Please see Section I, above, for the Programmatic Changes of this NOAA.
H. Paperwork Reduction: Under the Paperwork Reduction Act (44
U.S.C. chapter 35), an agency may not conduct or sponsor a collection
of information, and an individual is not required to respond to a
collection of information, unless it displays a valid OMB control
number. Pursuant to the Paperwork Reduction Act, the application has
been assigned the following control number: 1559-0016.
V. Application Review Information
A. Review and selection process: All Allocation Applications will
be reviewed for eligibility and completeness. To be complete, the
application must contain, at a minimum, all information described as
required in the application form. An incomplete application will be
rejected. Once the application has been determined to be eligible and
complete, the CDFI Fund will conduct the substantive review of each
application in two parts (Phase 1 and Phase 2) in accordance with the
criteria and procedures generally described in this NOAA and the
Allocation Application.
In Phase 1, two reviewers will evaluate and score the Business
Strategy and Community Outcomes sections of each application. An
Applicant must exceed a minimum overall aggregate base score threshold
and exceed a minimum aggregate section score threshold in each scored
section in order to advance from the Phase 1 to the Phase 2 part of the
substantive review process. In Phase 2, the CDFI Fund will rank
Applicants and determine the dollar amount of allocation authority
awarded in accordance with the procedures set forth below.
B. Criteria:
1. Business Strategy (25-point maximum):
(a) When assessing an Applicant's business strategy, reviewers will
consider, among other things: the Applicant's products, services and
investment criteria; a pipeline of potential business loans or
investments consistent with an Applicant's request for an NMTC
Allocation; the prior performance of the Applicant or its Controlling
Entity, particularly as it
[[Page 71414]]
relates to making similar kinds of investments as those it proposes to
make with the proceeds of QEIs; the Applicant's prior performance in
providing capital or technical assistance to disadvantaged businesses
or communities; and the extent to which the Applicant intends to make
QLICIs in one or more businesses in which persons unrelated to the
entity hold a majority equity interest.
Under the Business Strategy criterion, an Applicant will generally
score well to the extent that it will deploy debt or investment capital
in products or services which are flexible or non-traditional in form
and on better terms than available in the marketplace. An Applicant
will also score well to the extent that, among other things: (i) it has
identified a set of clearly-defined potential borrowers or investees;
(ii) it describes the due diligence it will conduct prior to making
QLICIs to determine whether a QALICB will remain financially viable and
operational; (iii) it has a track record of successfully deploying
loans or equity investments and providing services similar to those it
intends to provide with the proceeds of QEIs; (iv) its projected dollar
volume of NMTC Allocation deployment is supported by its track record
of deployment; and (v) in the case of an Applicant proposing to
purchase loans from CDEs, the Applicant will require the CDE selling
such loans to re-invest the proceeds of the loan sale to provide
additional products and services to Low-Income Communities.
(b) Priority Points: In addition, as provided by IRC 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 an 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; (iii)
engage with local communities regarding investments; and (iv) involve
community representatives in the governing board and/or advisory board
in approving investment criteria or decisions.
An Applicant will generally score well under this section to the
extent that, among other things: (a) it will generate clear and well
supported community development outcomes; (b) it has a track record of
producing quantitative and qualitative community outcomes that are
similar to those projected to be achieved with an NMTC Allocation; (c)
it 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; and
(f) it ensures that an NMTC investment into a project or business is
supported by and will be beneficial to Low-Income Persons and residents
of Low-Income Communities.
C. Phase 2 Evaluation:
1. Application Ranking and Anomaly Reviews: Using the numeric
scores from Phase 1, Applicants are ranked on the basis of each
Applicant's combined scores in the Business Strategy and Community
Outcomes sections of the application plus one half of the priority
points. If, in the case of a particular application, a reviewer's total
base score or section score(s) (in one or more of the two application
scored sections) varies significantly from the other reviewer's total
base scores or section scores for such application, the CDFI Fund may,
in its sole discretion, obtain the evaluation and numeric scoring of an
additional third reviewer to determine whether the anomalous score
should be replaced with the score of the additional third reviewer.
2. Late Reports: In the case of an Applicant or any Affiliates that
have previously received an award or NMTC Allocation from the CDFI Fund
through any CDFI Fund program, the CDFI Fund will deduct up to five
points from the Applicant's rank score for the Applicant's (or its
Affiliate's) failure to meet any of the reporting deadlines set forth
in any assistance, award or Allocation Agreement(s), if the reporting
deadlines occurred during the period from January 14, 2022 to the
application deadline in this NOAA.
3. Prior Year Allocatees: In the case of Applicants (or their
Affiliates) that are prior year Allocatees, the CDFI Fund will review
the activities of the prior year Allocatee to determine whether the
entity has: (a) effectively utilized its prior-year NMTC Allocations in
a manner generally consistent with the representations made in the
relevant Allocation Application (including, but not limited to, the
proposed product offerings, business type, fees and markets served
(i.e. service area) and notable relationships); (b) issued QEIs and
closed QLICIs in a timely manner; and (c) substantiated a need for
additional NMTC Allocation authority. The CDFI Fund will use this
information in determining whether to reject or reduce the allocation
award amount of its NMTC Allocation Application.
An Applicant will be evaluated more favorably under Part V. of the
Application to the extent that it clearly explains: (i) how it ensures
that the NMTCs allocated to QALICBs did not exceed the amount necessary
to assure QALICB feasibility; (ii) the community outcomes or benefits
that were generated as a result of the transaction; (iii) source(s) and
amount(s) of leveraged debt from all sources; (iv) the NMTC-related
fees and third-party expenses paid by the QALICB or the QALICB's
Affiliates, including actions taken to control expenses paid by QALICBs
and investors; and (v) quantifies the value of the investment acquired
by the QALICBs at the end of the seven-year credit period, to the
extent the Applicant's past transactions have been structured to allow
QALICBs
[[Page 71415]]
to acquire a portion of QLICIs at the end of the seven-year credit
period. An Applicant will also be evaluated favorably to the extent the
activities undertaken with the NMTC dollars are consistent with the
business strategy presented in the relevant Allocation Application
(e.g. product offerings; business type; fees and markets served;
notable relationships, etc.).
4. Management Capacity: In assessing an Applicant's management
capacity, the CDFI Fund will consider, among other things, the current
and planned roles, as well as qualifications of the Applicant's (and
Controlling Entity's, if applicable): principals; board members;
management team; and other essential staff or contractors, with
specific focus on: experience in providing loans; equity investments or
financial counseling and other services, including activities similar
to those described in the Applicant's business strategy; asset
management and risk management experience; experience with fulfilling
compliance requirements of other governmental programs, including other
tax credit programs; and the Applicant's (or its Controlling Entity's)
financial health. CDFI Fund evaluators will also consider the extent to
which an Applicant has protocols in place to ensure ongoing compliance
with NMTC Program requirements and the Applicant's projected income and
expenses related to managing an NMTC Allocation.
An Applicant will be generally evaluated more favorably under this
section to the extent that its management team or other essential
personnel have experience in: (a) identifying and underwriting loans
and/or equity investments or providing financial counseling and other
services in Low-Income Communities, if applicable, particularly those
likely to be served with QLICIs from the Applicant; (b) asset and risk
management; and (c) fulfilling government compliance requirements,
particularly tax credit program compliance. An Applicant will also be
evaluated favorably to the extent it clearly explains its due diligence
when providing businesses with financing or investment; demonstrates
strong financial health and a high likelihood of remaining a going-
concern, including support from the Controlling Entity, if applicable;
it clearly explains its NMTC fees as well as levels of income and
expenses; has policies and systems in place to ensure portfolio
quality, ongoing compliance with NMTC Program requirements; and, if it
is a Federally-insured financial institution, has its most recent
Community Reinvestment Act (CRA) rating as ``outstanding.''
5. Capitalization Strategy: When assessing an Applicant's
capitalization strategy, the CDFI Fund will consider, among other
things: the key personnel of the Applicant (or Controlling Entity) and
their track record of raising capital, particularly from for-profit
investors; the extent to which the Applicant has secured investments or
commitments to invest in NMTC (if applicable), or indications of
investor interest commensurate with its requested amount of NMTC
Allocations, or, if a prior Allocatee, the track record of the
Applicant or its Affiliates in raising Qualified Equity Investments in
the past five years; the Applicant's strategy for identifying
additional investors, if necessary, including the Applicant's (or its
Controlling Entity's) prior performance with raising equity from
investors, particularly for-profit investors; the distribution of the
economic benefits of the tax credit; and the extent to which the
Applicant intends to invest the proceeds from the aggregate amount of
its QEIs at a level that exceeds the requirements of IRC 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
[[Page 71416]]
that meet the minimum scoring thresholds will be advanced to Phase 2
review and will be provided with ``preliminary'' awards, in descending
order of final rank score, until the available allocation authority is
fulfilled. Once these ``preliminary'' award amounts are determined, the
CDFI Fund will then analyze the Allocatee pool to determine whether the
two Non-Metropolitan proportionality objectives have been met.
The CDFI Fund will first examine the ``preliminary'' awards and
Allocatees to determine whether the percentage of Allocatees that are
Rural CDEs is, at a minimum, equal to the percentage of Applicants in
the highly qualified pool that are Rural CDEs. If this objective is not
achieved, the CDFI Fund will provide awards to additional Rural CDEs
from the highly qualified pool, in descending order of their final rank
score, until the appropriate percentage balance is achieved. In order
to accommodate the additional Rural CDEs in the Allocatee pool within
the available NMTC Allocation limitations, a formula reduction may be
applied as uniformly as possible to the allocation amount for all
Allocatees in the pool that have not committed to investing a minimum
of 20 percent of their QLICIs in Non-Metropolitan counties.
The CDFI Fund will then determine whether the pool of Allocatees
will, in the aggregate, invest at least 20 percent of their QLICIs (as
measured by dollar amount) in Non-Metropolitan counties. The CDFI Fund
will first apply the ``minimum'' percentage of QLICIs that Allocatees
indicated in their applications would be targeted to Non-Metropolitan
areas to the total NMTC Allocation award amount of each Allocatee (less
whatever percentage the Allocatee indicated would be retained for non-
QLICI activities), and total these figures for all Allocatees. If this
aggregate total is greater than or equal to 20 percent of the QLICIs to
be made by the Allocatees, then the pool is considered balanced and the
CDFI Fund will proceed with the NMTC Allocation process. However, if
the aggregate total is less than 20 percent of the QLICIs to be made by
the Allocatees, the CDFI Fund will consider requiring any or all of the
Allocatees to direct up to the ``maximum'' percentage of QLICIs that
the Allocatees indicated would be targeted to Non-Metropolitan
counties, taking into consideration their track record and ability to
deploy dollars in Non-Metropolitan counties. If the CDFI Fund cannot
meet the goal of 20 percent of QLICIs in Non-Metropolitan counties by
requiring any or all Allocatees to commit up to the maximum percentage
of QLICIs that they indicated would be targeted to Non-Metropolitan
counties, the CDFI Fund may add additional highly qualified Rural CDEs
(in descending order of final rank score) to the Allocatee pool. In
order to accommodate any additional Allocatees within the allocation
limitations, a formula reduction will be applied as uniformly as
possible, to the allocation amount for all Allocatees in the pool that
have not committed to investing a minimum of 20 percent of their QLICIs
in Non-Metropolitan counties.
E. Right of rejection: The CDFI Fund reserves the right to reject
any NMTC Allocation Application in the case of a prior CDFI Fund award
recipient, if such Applicant has failed to comply with the terms,
conditions, and other requirements of the prior or existing assistance
or award agreement(s) with the CDFI Fund or any other agreement under
any CDFI Fund program.
The CDFI Fund reserves the right to reject any NMTC Allocation
Application in the case of a prior CDFI Fund Allocatee, if such
Applicant has failed to comply with the terms, conditions, and other
requirements of its prior or existing Allocation Agreement(s) with the
CDFI Fund.
The CDFI Fund reserves the right to reject any NMTC Allocation
Application in the case of any Applicant, if an Affiliate of the
Applicant has failed to meet the terms, conditions and other
requirements of any prior or existing assistance agreement, award
agreement, Allocation Agreement, or any other agreement under any CDFI
Fund program with the CDFI Fund.
The CDFI Fund reserves the right to reject or reduce the allocation
award amount of any NMTC Allocation Application in the case of a prior
Allocatee, if such Applicant has failed to use its prior NMTC
Allocation(s) in a manner that is generally consistent with the
business strategy (including, but not limited to, the proposed product
offerings, business type, fees, markets served (i.e. service area), and
notable relationships) set forth in the Allocation Application(s)
related to such prior NMTC Allocation(s) or such Applicant has been
found by the IRS to have engaged in a transaction or series of
transactions designed to achieve a result that is inconsistent with the
purposes of IRC 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,
business type, fees, markets served (i.e., service area), and notable
relationships) set forth in the Allocation Application(s) related to
such prior NMTC Allocation(s) or has been found by the IRS to have
engaged in a transaction or series of transactions designed to achieve
a result that is inconsistent with the purposes of IRC Sec. 45D.
The CDFI Fund reserves the right to reject an NMTC Allocation
Application if information (including, but not limited to,
administrative errors; submission of inaccurate information; or
omission of information) comes to the attention of the CDFI Fund that
adversely affects an Applicant's eligibility for an award, adversely
affects the CDFI Fund's evaluation or scoring of an application,
adversely affects the CDFI Fund's prior determinations of CDE
certification, or indicates fraud or mismanagement on the part of an
Applicant, its Affiliate(s), or the Controlling Entity, if such fraud
or mismanagement by the Affiliate(s) or Controlling Entity would hinder
the Applicant's ability to perform under the Allocation Agreement. If
the CDFI Fund determines that any portion of the application is
incorrect in any material respect, the CDFI Fund reserves the right, in
its sole discretion, to reject the application.
The CDFI Fund reserves the right to reject any NMTC Allocation
Application if additional information is obtained that, after further
due diligence and in the discretion of the CDFI Fund, would hinder the
Applicant's ability to effectively perform under the Allocation
Agreement. In the case of Applicants (or the Controlling Entity, or
Affiliates) that are regulated or receive oversight by the Federal
government or a state agency (or comparable entity), the CDFI Fund may
request additional information from the Applicant regarding Assurances
and Certifications or other information about the ability of the
Applicant to effectively perform under the Allocation Agreement. The
NMTC Allocation recommendation panel or selecting official(s)
reserve(s) the right to consult with and take into consideration the
views of the appropriate Federal banking and other regulatory agencies.
In the case of Applicants (or Affiliates of Applicants) that are also
Small Business Investment Companies, 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
[[Page 71417]]
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 2022 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 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) or any other agreement under any CDFI
Fund program as of the date the CDFI Fund provides notification of an
NMTC Allocation award or thereafter, the CDFI Fund reserves the right,
in its sole discretion, to reject the application, delay entering into
an Allocation Agreement, and/or impose limitations on an Allocatee's
ability to issue QEIs to investors until said prior award recipient or
Allocatee is current on the reporting requirements in the previously
executed assistance, allocation, or award agreement(s) or any other
agreement under any CDFI Fund program. Please note that the automated
systems the CDFI Fund uses for receipt of reports submitted
electronically typically acknowledges only a report's receipt; such an
acknowledgment does not warrant that the report received was complete
and therefore met reporting requirements.
2. Pending determination of noncompliance or default: If an
Allocatee is a prior award recipient or Allocatee under any CDFI Fund
program and if: (i) it has demonstrated noncompliance with a previous
assistance or award agreement or a default under an Allocation
Agreement or any other agreement under any CDFI Fund program; and (ii)
the entity has been given a timeframe to cure the noncompliance or
default, the CDFI Fund reserves the right, in its sole discretion, to
delay entering into an Allocation Agreement and/or to impose
limitations on the Allocatee's ability to issue QEIs to investors,
during the time period given for the entity to cure the noncompliance
or default and until such time as the CDFI Fund makes a final
determination that the entity is in noncompliance or default, and
determination of remedies, if applicable, in the sole determination of
the CDFI Fund. Further, if an Affiliate of an Allocatee is a prior CDFI
Fund award recipient or Allocatee and if such entity: (i) has
demonstrated noncompliance under a previous assistance or award
agreement or default under a previous Allocation Agreement or any other
agreement under any CDFI Fund program; and (ii) the entity has been
given a timeframe to cure the noncompliance or default, the CDFI Fund
reserves the right, in its sole discretion, to delay entering into an
Allocation Agreement and/or to impose limitations on the Allocatee's
ability to issue QEIs to investors, during the time period given for
the entity to cure the noncompliance or default and until such time as
the CDFI Fund makes a final determination that the entity is in
noncompliance or default, and determination of remedies, if applicable,
in the sole determination of the CDFI Fund. If the prior award
recipient, Allocatee or Affiliate of the Allocatee in question is
unable to satisfactorily resolve the issues of noncompliance or
default, in the sole determination of the CDFI Fund, the CDFI Fund
reserves the right, in its sole discretion, to terminate and rescind
the award notification made under this NOAA.
3. Determination of noncompliance or default status: If prior to
entering into an Allocation Agreement through this NOAA, the CDFI Fund
has made a final determination that an Allocatee that is a prior CDFI
Fund award recipient or Allocatee under any CDFI Fund program is (i)
noncompliant with a previously executed assistance or award agreement,
or is in default of a previously executed Allocation Agreement or any
other agreement under any CDFI Fund program; (ii) the CDFI Fund has
provided written notification of such determination to such
organization; and (iii) the noncompliance or default occurs during the
time period beginning 12 months prior to the application deadline and
ending with the execution of the CY 2022 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) or any other agreement
under any CDFI Fund program; (ii) the CDFI Fund has provided written
notification of such determination to such organization; and (iii) the
default occurs during the time period beginning 12 months prior to the
[[Page 71418]]
application deadline and ending with the execution of the CY 2022
Allocation Agreement, the CDFI Fund reserves the right, in its sole
discretion, to delay entering into an Allocation Agreement and/or to
impose limitations on the Allocatee's ability to issue QEIs to
investors, or to terminate and rescind the NMTC Allocation made under
this NOAA.
B. Allocation Agreement: Each Allocatee (including their Subsidiary
Allocatees) must enter into an Allocation Agreement with the CDFI Fund.
The Allocation Agreement will set forth certain required terms and
conditions of the NMTC Allocation which may include, but are not
limited to, the following: (i) the amount of the awarded NMTC
Allocation; (ii) the approved uses of the awarded NMTC Allocation
(e.g., loans to or equity investments in QALICBs, loans to or equity
investments in other CDEs); (iii) the approved service area(s) in which
the proceeds of QEIs may be used, including the dollar amount of QLICIs
that must be invested in Non-Metropolitan counties; (iv) commitments to
specific innovative investments discussed by the Allocatee in its
Allocation Application; (v) the time period by which the Allocatee may
obtain QEIs from investors; (vi) reporting requirements for the
Allocatee; and (vii) a requirement to maintain certification as a CDE
throughout the term of the Allocation Agreement. If an Allocatee
represented in its NMTC Allocation Application that it intends to
invest substantially all of the proceeds from its investors in
businesses in which persons unrelated to the Allocatee hold a majority
equity interest, the Allocation Agreement will contain a covenant to
that effect.
In addition to entering into an Allocation Agreement, each
Allocatee must furnish to the CDFI Fund an opinion from its legal
counsel or a similar certification, the content of which will be
further specified in the Allocation Agreement, to include, among other
matters, an opinion that an Allocatee (and its Subsidiary Allocatees,
if any): (i) is duly formed and in good standing in the jurisdiction in
which it was formed and the jurisdiction(s) in which it operates; (ii)
has the authority to enter into the Allocation Agreement and undertake
the activities that are specified therein; (iii) has no pending or
threatened litigation that would materially affect its ability to enter
into and carry out the activities specified in the Allocation
Agreement; and (iv) is not in default of its articles of incorporation,
bylaws or other organizational documents, or any agreements with the
Federal government.
If an Allocatee identifies Subsidiary Allocatees, the CDFI Fund
reserves the right to require an Allocatee to provide supporting
documentation evidencing that it Controls such entities prior to
entering into an Allocation Agreement with the Allocatee and its
Subsidiary Allocatees. The CDFI Fund reserves the right, in its sole
discretion, to rescind its NMTC Allocation award if the Allocatee fails
to return the Allocation Agreement, signed by the authorized
representative of the Allocatee, and/or provide the CDFI Fund with any
other requested documentation, including an approved legal opinion,
within the deadlines set by the CDFI Fund.
C. Fees: The CDFI Fund reserves the right, in accordance with
applicable Federal law and, if authorized, to charge allocation
reservation and/or compliance monitoring fees to all entities receiving
NMTC Allocations. Prior to imposing any such fee, the CDFI Fund will
publish additional information concerning the nature and amount of the
fee.
D. Reporting: The CDFI Fund will collect information, on at least
an annual basis from all Allocatees and/or CDEs that are recipients of
QLICIs, including such audited financial statements and opinions of
counsel as the CDFI Fund deems necessary or desirable, in its sole
discretion. The CDFI Fund will require the Allocatee to retain
information as the CDFI Fund deems necessary or desirable and shall
provide such information to the CDFI Fund when requested to monitor
each Allocatee's compliance with the provisions of its Allocation
Agreement and to assess the impact of the NMTC Program in Low-Income
Communities. The CDFI Fund may also provide such information to the IRS
in a manner consistent with IRC 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
emails, or Service Requests in AMIS concerning the application that are
received after the last day to contact the CDFI Fund. The CDFI Fund
will respond to such phone calls, emails, or Service Requests in AMIS
after the Allocation Application deadline in Table 1. Applications and
other information regarding the CDFI Fund and its programs may be
obtained from the CDFI Fund's website at https://www.cdfifund.gov. The
CDFI Fund will post on its website responses to questions of general
applicability regarding the NMTC Program.
A. Information technology support: Technical support can be
obtained by calling (202) 653-0422 or by submitting a Service Request
in AMIS. People who have visual or mobility impairments that prevent
them from accessing the Low-Income Community maps using the CDFI Fund's
website should call (202) 653-0422 for assistance. These are not toll
free numbers.
B. Programmatic support: If you have any questions about the
programmatic requirements of this NOAA, contact the CDFI Fund's NMTC
Program Manager by submitting a Service Request in AMIS; or by
telephone at (202) 653-0421. These are not toll free numbers.
C. Administrative support: If you have any questions regarding the
administrative requirements of this NOAA, contact the CDFI Fund's NMTC
Program Manager by submitting a Service Request in AMIS, or by
telephone at (202) 653-0421. These are not toll free numbers.
D. IRS support: For questions regarding the tax aspects of the NMTC
Program, contact James Holmes and Dillon Taylor, Office of the Chief
Counsel (Passthroughs and Special Industries), IRS, by telephone at
(202) 317-4137, or by facsimile at (855) 591-7867. These are not toll
free numbers. Applicants wishing for a formal ruling request should see
IRS Internal Revenue Bulletin 2020-1, issued January 4, 2020.
[[Page 71419]]
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. 2022-25116 Filed 11-21-22; 8:45 am]
BILLING CODE 4810-05-P
