News Archive:
2003
December
RICHMOND, Va., December 30, 2003 -
At the request of Virginia Gov. Bob Wise, the Federal Reserve Bank of Richmond (FRBR) is working to consolidate forces in Virginia to pursue an allocation of new markets tax credits (NMTCs). FRBR's Community Affairs Office will hold a two-part program for Virginia bankers and community development organizations on the NMTC program. The first session was held November 17, 2003 and included discussions of the lessons learned from round one of the NMTC application process, as well as collaborative approaches to development. Approximately 60 prospective participants are expected to attend the second session February 6, 2004. "New Markets Tax Credits: The Partnership Connection Session II" will focus on structuring the deal. Among the speakers will be Daniel J. Smith, a partner with Novogradac & Company, who will be addressing a leveraged structure for NMTC deals.
October
RICHMOND, Va. - October 30, 2003 -
At the request of Virginia Gov. Bob Wise, the Federal Reserve Bank of Richmond (FRBR) is working to consolidate forces in Virginia to pursue an allocation of new markets tax credits (NMTCs). FRBR's Community Affairs Office will hold a two-part program for Virginia bankers and community development organizations on the NMTC program. The first session was held November 17, 2003 and included discussions of the lessons learned from round one of the NMTC application process, as well as collaborative approaches to development. Approximately 60 prospective participants are expected to attend the second session February 6, 2004. "New Markets Tax Credits: The Partnership Connection Session II" will focus on structuring the deal. Among the speakers will be Daniel J. Smith, a partner with Novogradac & Company, who will be addressing a leveraged structure for NMTC deals.
WASHINGTON, D.C., October 15, 2003
Thirty-eight percent - or 102 - of the 271 applicants seeking new markets tax credit (NMTC) allocation authority for the 2003 - 2004 application round sought an allocation of NMTCs last year, according to new figures released today by the Community Development Financial Institutions (CDFI) Fund. Speaking to members of the New Markets Tax Credit Coalition today in New York, CDFI Fund Executive Director Tony Brown said that the agency's goal is to announce allocations in the early Spring 2004. The requests for $30 billion in allocation authority is 17 percent greater than the $25 billion requested last year. Twenty-eight applicants (10 percent of the pool) were allocatees in the last round.
The largest request for an allocation of NMTCs amounted to $1.5 billion, and the smallest request is $670,000. The average NMTC request is approximately $113 million and the median request size is approximately $72 million.
Thirty-eight percent of the applications were submitted by not-for-profit organizations, or by entities that are subsidiaries of not-for-profit organizations. Nineteen percent of the applications were submitted by banks, thrifts or bank holding companies or subsidiaries of such institutions.
Click here for a copy of Brown's speech.
WASHINGTON, D.C., October 14, 2003 -
The Treasury Department's Community Development Financial Institutions (CDFI) Fund announced today that it received 271 applications in the second round of the New Markets Tax Credit (NMTC) program. The applications received represent an aggregate total of more than $30.4 billion in potential equity investments. A total of $15 billion in equity allocation authority is being made available competitively over the seven years of the program, which is authorized on a phased-in basis through 2007. Under this current round, $3.5 billion in tax credit authority is being offered.
The CDFI Fund says it will analyze and evaluate applications through a competitive review process to identify those best suited to have the greatest community development impact. The application deadline was September 30, 2003. The CDFI Fund anticipates announcing the organizations that will receive New Markets Tax Credit allocations in the spring of 2004.
Click here for more information.
WASHINGTON, D.C., October 2, 2003 -
The next meeting of the Community Development Advisory Board, which provides advice to the Director of the Community Development Financial Institutions (CDFI) Fund, will be held at 10 a.m. on Thursday, October 23, 2003 at The American Institute of Architects Boardroom, 1735 New York Avenue, N.W., Washington, D.C. The advisory board is required to meet at least annually to advise the director of the CDFI Fund on the policies regarding the CDFI Fund's activities; the board does not advise the CDFI Fund on the granting or denial of any particular application for monetary or non-monetary awards.
The meeting is open to the public and seats are available to 50 members of the public on a first-come, first-served basis. Participation in the discussions at the meeting will be limited to advisory board members and Treasury staff. Anyone who would like to have the Advisory Board consider a written statement must submit it to the CDFI Fund, by 4 p.m., Monday, October 13, 2003. The meeting will include a report from the director on the activities of the CDFI Fund since the last board meeting, including programmatic, fiscal and legislative initiatives for the years 2003 and 2004. Click here for details on submitting written statements.
September
WASHINGTON, D.C., September 23, 2003 -
The Treasury Department and the Internal Revenue Service (IRS) today announced in Notice 2003-68 that they will clarify and amend the definition of a qualified low-income community investment under § 1.45D-1T(d)(1)(ii) of the temporary Income Tax Regulations relating to the purchase of loans by a community development entity (CDE).
The IRS and Treasury received requests for clarification of whether, under § 1.45D-1T(d)(1)(ii), the purchase of a loan may be a qualified low-income community investment if the loan was made by an entity before the entity became a CDE. In response, § 1.45D-1T(d)(1)(ii) will be amended to provide that, for purposes of § 45D(d)(1)(B), a loan by an entity is treated as made by a CDE, notwithstanding that the entity was not a CDE at the time it made the loan, if the entity is a CDE at the time it sells the loan.
Additionally, § 1.45D-1T(d)(1)(ii) will be amended to provide that, for purposes of § 45D(d)(1)(B):
1 .The purchase of a loan by the ultimate CDE from a second CDE that purchased the loan from the originating CDE (or from another CDE) is treated as a purchase of the loan by the ultimate CDE from the originating CDE, provided that each entity that sold the loan was a CDE at the time it sold the loan; and
2. A loan purchased by the ultimate CDE from another CDE is a qualified low-income community investment if it qualifies as a qualified low-income community investment either (A) at the time the loan was made or (B) at the time the ultimate CDE purchases the loan.
Click here for a copy of Notice 2003-68.
WASHINGTON, D.C. - September 10, 2003 -
Certain deadlines for applicants in the current round of new markets tax credit (NMTC) allocations have been extended by a notice published today by the Community Development Financial Institutions (CDFI) Fund. Due to delays in the development of the electronic application and related documents, the CDFI Fund is extending the following deadlines:
The original requirement the requests for a paper application using the NMTC Paper Application Submission Form be received by the CDFI Fund by September 15, 2003 has been extended to September 19, 2003. The CDFI Fund will also continue to provide programmatic and information technology support related to the allocation application through September 29, 2003, rather than the original September 26, 2003 cut-off date.
Also, under the eligibility section of the notice of allocation availability (NOAA), the CDFI Fund announced that a prior allocatee of the NMTC Program is not eligible to receive an NMTC allocation pursuant to the NOAA unless the allocatee can demonstrate via the CDFI Fund's allocation tracking system that, as of February 17, 2004, it has issued and the allocatee has received cash from its investors for 50 percent of its qualified equity investments (QEIs) relating to its prior NMTC allocation. The February 17, 2004 deadline also applied if a prior allocatee controls the applicant, is controlled by the applicant or shares common management officials with the applicant. This deadline has been extended to March 5, 2004, in both instances.
Moreover, the notice states that the CDFI Fund has recently learned that some CDFIs or Specialized Small Business Investment Companies (SSBICs) may have experienced technical issues with accessing the CDFI Fund's community development entity (CDE) registration database which may have prevented such entities from registering as CDEs by the August 29, 2003 deadline. Such applicants are advised to contact Matthew Josephs, the acting NMTC program manager, to determine whether they will be eligible to apply for an NMTC allocation.
All other information and requirements set forth in the July 18, 2003 NOAA for the NMTC Program and the 2003 NMTC Program Allocation Application remain effective, as published. Click here for a copy of the notice.
WASHINGTON, D.C. - September 8, 2003 -
In Notice 2003-64, the Department of Treasury and the Internal Revenue Service (IRS) announced that Temporary Treasury Regulations will be amended to allow Community Development Entities (CDEs) to make investments through three tiers of CDEs. Previously, a CDE that received and investment or loan from another CDE could only use the proceeds from the loan or investments to make investments in qualified active low-income community businesses (QALICB) or provide financial counseling or other services to such businesses. Click here for a copy of the notice.
WASHINGTON, D.C. - September 3, 2003 -
The Community Development Financial Institutions (CDFI) Fund today made available the 2003 online allocation application for the New Markets Tax Credits (NMTC) program and instructions for completing the application. NMTC allocation applications (both electronic and paper) are due by 5 p.m. Eastern time on September 30, 2003. Applicants who wish to submit a paper application rather than use the online form must submit a request by 5 p.m. Eastern time on September 19, 2003; the CDFI Fund expects to make the NMTC Paper Application Submission Form available September 8, 2003. The CDFI Fund has also extended the deadline for programmatic and information technology support through 5 p.m. Eastern time September 29, 2003, rather than the original September 26, 2003 cut off published in the notice of allocation availability.
Instructions for Using the 2003 Online Allocation Application
Online Application Available at CDFI Fund web site
August
WASHINGTON, D.C. - August 29, 2003 -
The Office of the Comptroller of the Currency (OCC) this month amended its regulations to permit investments in the New Markets Tax Credit program under regulation 12 CFR part 24. 12 CFR part 24 pertains to community development corporations, community development projects and other public welfare investments under the Community Reinvestment Act (CRA) and other programs. OCC says the amendment is intended to reflect the additional types of public welfare investment structures that have become more common in recent years and that are permissible under the governing statute to promote public welfare of low- and moderate-income communities and families. Click here for a copy of the ruling.
July
WASHINGTON, D.C. - July 24, 2003 -
The Treasury Department and Internal Revenue Service (IRS) announced in Notice 2003-56 that they will amend § 1.45D-1T(c)(3)(ii) of the Temporary Income Tax Regulations to provide an exception permitting certain equity investments made on or after the date the Community Development Financial Institutions (CDFI) Fund publishes a Notice of Allocation Availability in the Federal Register, and before the receipt of a New Markets Tax Credit allocation under § 45D(f)(2), to be designated as qualified equity investments under § 45D(b)(1)(C) of the Internal Revenue Code. Click here for a copy of the notice.
WASHINGTON, D.C. - July 17, 2003 -
The Treasury Department today announced the second competitive round for the allocation of tax credits for up to $3.5 billion in qualified equity investments under the New Markets Tax Credit (NMTC) Program. As expected, the 2003 NMTC Notice of Allocation Availability (NOAA) represents the combined allocations for 2003 and 2004. The allocation application deadline is September 30, 2003.
In addition to the NOAA, the Community Development Financial Institutions (CDFI) Fund today released several documents including the 2003 Allocation Application and an updated Allocation Application Q&A. The NOAA will be published in the Federal Register on July, 18, 2003.
The CDFI Fund expects to have additional documents available August 22, 2003, including: the Electronic Application for the 2003 NMTC Allocation Application; the Instructions for Applicants in Electronic Handbooks; and the NMTC Paper Application Submission Form (anticipated to be due 5 pm on September 15, 2003).
WASHINGTON, D.C. - July 16, 2003 -
The Community Development Financial Institutions (CDFI) Fund today invited comments concerning the reporting requirement for the New Markets Tax Credit (NMTC) Program Institution-Level Report, including Internal Revenue Service (IRS) compliance questions, and the Transaction-Level Report from NMTC allocatees. The CDFI Fund also invited comments on certain other information collections required by the allocation agreement for NMTC program allocatees. Written comments are due on or before September 15, 2003. Click here for a copy of the notice from today's Federal Register.
WASHINGTON, D.C. - July 15, 2003 -
While the Community Development Financial Institutions (CDFI) Fund accepts applications for CDE certification on a rolling basis, an organization wishing to apply in 2003 for an allocation of NMTCs that has not yet been certified as a CDE must submit its CDE Certification Application to the Bureau of Public Debt by no later than the date identified in the 2003 Notice of Allocation Authority (NOAA). The 2003 NOAA is expected be published in the Federal Register this week, and it is currently anticipated that the NOAA will include a CDE Certification Application due date on or about August 29, 2003. CDFIs and SSBICs will be similarly required to register online as CDEs on or before the same date in order to be eligible to apply for an allocation of tax credits in 2003. For more information about CDE certification, click here.
WASHINGTON, D.C. - July 11, 2003 -
The Community Development Financial Institutions (CDFI) Fund says it will release the Notice of Allocation Availability (NOAA) for the 2003 round of the New Markets Tax Credit (NMTC) Program no later than August 4, 2003 and will hold a video teleconference on August 6, 2003. This will be the CDFI Fund's only training session on the application. Novogradac & Company LLP will host two training sessions for industry professionals interested in participating in the second round of NMTC funding: August 19 in San Francisco and August 21 in Washington, D.C.
WASHINGTON, D.C. - July 8, 2003 -
On August 6, 2003 at 1:00 p.m. EDT, the Community Development Financial Institutions (CDFI) Fund will host an interactive video teleconference regarding the New Markets Tax Credit (NMTC) Program that will be broadcast from the U.S. Department of Housing and Urban Development's (HUD's) Washington, D.C. television studio and down-linked via satellite to 81 HUD field offices across the country. This broadcast will be the only official outreach that the CDFI Fund will conduct for the upcoming 2003 round of the NMTC Program. Interested participants can register for the event by using the CDFI Fund's online registration system at www.cdfifund.gov.
June
WASHINGTON, D.C. - June 23, 2003 -
New markets tax credit (NMTC) industry participants concerned over unresolved issues in the NMTC allocation agreement drafts published to date could have answers by August 7. In a memo to allocatees dated June 23, 2003, the Community Development Financial Institutions (CDFI) Fund announced that it expects to release a final allocation agreement within the next 45 days. The CDFI Fund said it is still reviewing the more than 300 comments received from NMTC allocatees and industry professionals regarding the draft released April 29, 2003.
For a closer look at the allocation agreement issues that have raised concern from the NMTC industry, see the upcoming July issue of the NMTC Report.
WASHINGTON, D.C. - June 18, 2003 -
The Community Development Financial Institutions (CDFI) Fund today invited comments concerning its conflict of interest reporting requirements for contract readers of applications submitted for funding under the CDFI Fund's various programs. Click here for a copy of the notice.
May
WASHINGTON, D.C. - May 30, 2003 -
The Community Development Financial Institutions (CDFI) Fund today invited comments concerning an information collection required by the allocation agreement that will be entered into by the CDFI Fund and allocatees of the New Markets Tax Credit (NMTC) program. The specific information collection under consideration relates to the section of the allocation agreement that requires an allocatee to provide notice to the CDFI Fund of the receipt of a Qualified Equity Investment (QEI). The allocation agreement contains the terms and conditions, including all reporting requirements, associated with the receipt of a NMTC allocation. The CDFI Fund will require each allocatee to use an electronic data collection and submission system, known as the allocation tracking system, to report on the information related to its receipt of a QEI.
Written comments should be received on or before July 29, 2003, to be assured of consideration, and should be directed to Matthew Josephs, Acting Financial Equity Manager, Community Development Financial Institutions Fund, U.S. Department of the Treasury, 601 13th Street, N.W., Suite 200 South, Washington, D.C 20005; Fax: (202) 622-8911. The CDFI Fund will publish a separate notice seeking public comments regarding other information collections contained in the allocation agreement ( e.g., use of QEI proceeds). Click here for a copy of the notice.
WASHINGTON, D.C. - May 29, 2003 -
The first round of New Markets Tax Credit (NMTC) allocation has renewed industry interest regarding specific issues within the NMTC program. As allocatees and other industry participants plan their first deals using NMTCs, the pressure to address these unanswered regulatory and compliance questions has increased. Click here for two recent letters focusing on these issues.
WASHINGTON, D.C. - May 12, 2003 -
The Community Development Financial Institutions (CDFI) Fund today announced that it has awarded a contract to E.F. Kearney, Limited to design, develop and implement an internet based system to collect data from the hundreds of community development organizations affiliated with the CDFI Fund.
This new system and the data it will allow the CDFI Fund to collect are expected to enable the agency to demonstrate how Community Development Financial Institutions (CDFIs) and Community Development Entities (CDEs) are performing and the impact they are having in the low-income communities they serve. The data collection system will support several of the CDFI Fund's new initiatives, including its CDFI performance rating system (PLUM), its measurement of financing activities in the most distressed communities in the nation (Hot Zones), and New Markets Tax Credit (NMTC) Program compliance. Click here for more information.
WASHINGTON, D.C. - May 5, 2003 -
The Treasury Department today invited comments on CDFI Form 0019, the New Markets Tax Credit (NMTC) Program - Community Development Entity (CDE) Certification Application. Applicants must be certified as CDEs to apply for an allocation of tax credit activity under the NMTC Program. There are currently 1,021 CDEs certified by the Community Development Financial Institutions (CDFI) Fund. Click here for more information about CDEs and a copy of the comment request.
March
WASHINGTON, D.C. - March 14, 2003 -
The U.S. Department of the Treasury announced today that 66 organizations have been selected to receive the first $2.5 billion in tax credit allocations under the New Markets Tax Credit (NMTC) program. The average amount for each allocatee was $38 million; range from $500,000 to $170 million. Seven organizations received allocations of $100 million or more. The 66 allocatees plan on making investments in at least 40 states.
For a copy of the list of applicants, their profiles by state and alphabetically, list of states served, general information on the awards and Treasury's press release, click here.
WASHINGTON, D.C. - March 13, 2003 -
New markets tax credit (NMTC) authority in 2003 and 2004 would be increased by $1 billion under legislation introduced by Rep. William Jefferson (D-La.) last week. In addition to providing additional credit authority in 2003 and 2004, H.R. 1135 would allow a community development entity (CDE) to target low-income populations under subsection (e) of § 45D of the Internal Revenue Code. The bill would also provide special status to new markets venture capital (NMVC) companies, adding them to specialized small business investment companies (SSBICs) and community development financial institutions (CDFIs), as a group that automatically qualifies for CDE certification. Click here for a copy of H.R. 1135.
WASHINGTON, D.C. - March 12, 2003 -
Treasury Secretary John Snow and CDFI Fund Director Tony Brown will announce the community development entities (CDEs) selected to receive the first $2.5 billion in tax credit allocations under the New Markets Tax Credit (NMTC) program aimed at stimulating growth and job creation in low-income communities at 9 a.m. Friday, March 14 in Columbus, Ohio at a local community center, according to a media advisory issued today by the Treasury Department. Additional information will be posted at www.newmarketscredits.com as soon as it becomes available.
February
WASHINGTON, D.C. - February 28, 2003 -
Tony Brown, director of the Community Development Financial Institutions Fund, in testimony before Congress yesterday, predicted that the U.S. Department of the Treasury would announce in March the first-round allocations of new markets tax credits (NMTC). Click here for Brown's statements, which include a discussion of funding requests to administer the NMTCs and how the NMTC allocation process has been conducted.
WASHINGTON, D.C. - February 14, 2003 -
The number of community development entities (CDE) certified by the Community Development Financial Institutions (CDFI) Fund yesterday grew to 821, up from 669 in November. Initially, the CDFI Fund expected that it would take 60 days from the date of receipt to notify CDE certification applicants of its decisions. However, due to a large volume of CDE certification applications from organizations that also applied for new markets tax credit (NMTC) allocations, the review process took considerably longer. The CDFI Fund late last year said that those entities that submitted a CDE certification application prior to July 25, 2002; applied for a NMTC allocation; and are awarded an allocation would receive notice by the end of December 2002, or at the latest before any announcements of allocations of NMTC authority are made. A date for the first-round allocation announcement has not been set, but is expected this month. Click here for the latest list of certified CDEs.
January
WASHINGTON, D.C. - January 31, 2003 -
The draft Allocation Agreement for the New Markets Tax Credit NMTC program is now available. It provides boilerplate provisions of the terms and conditions of the Allocation Agreement that may be entered into between the CDFI Fund and an allocation under the NMTC program. The CDFI Fund cautions that provisions are, among other things, subject to further modifications, and the draft agreement is for illustrative purposes only and should not be relied upon or used for any other purpose. To see the draft, click here.
WASHINGTON, D.C. - January 23, 2003 -
A partnership may finance the purchase of a qualified equity investment eligible for the new markets tax credit (NMTC) with proceeds of nonrecourse debt of the partnership, according to a revenue ruling released today by the Treasury Department and Internal Revenue Service (IRS). Revenue Ruling 2003-20 says for purposes of determining the NMTC allowable under § 45D, the amount of the qualified equity investment made by a limited liability company (LLC) classified as a partnership includes cash from a nonrecourse loan to the LLC that the LLC invests as equity in a qualified community development entity. Click here for Rev. Rul. 2003-20.
WASHINGTON, D.C. - January 9, 2003 -
Because the Community Development Financial Institutions (CDFI) Fund was unable to complete new markets tax credit (NMTC) allocation by January 1, 2003, the Treasury Department and the IRS issued Notice 2003-9, which amends § 1.45D-1T(c)(3)(ii). The 'look back' provision revises and extends the ‘look back’ period for equity investments made before the receipt of a NMTC allocation under § 45D(f)(2 ). The notice sets three criteria to allow a community development entity (CDE) to claim as a qualified equity investment certain equity investments made in the CDE before it had entered into an allocation agreement with Treasury Department. These criteria are:
- The equity investment was made on or after April 20, 2001;
- The designation of the equity investment as a qualified equity investment is made for a credit allocation received pursuant to an allocation application submitted to the CDFI Fund no later than August 29, 2002; and
- The equity investment otherwise satisfies the requirements of the NMTC statute and regulations.
Click here for a copy of the notice.
WASHINGTON, D.C. - January 7, 2003 -
The 108th Congress convened today and is already faced with heated debate over the new economic stimulus package. Contrasting proposals have been announced by both the Bush administration and Democrats in the House, and the new markets tax credit (NMTC) industry hopes to benefit from additional economic stimulus legislation. A letter, modeled on one sent last month to President Bush by the NMTC Coalition, is being circulated by NMTC industry participants urging Congress and the Bush administration include additional NMTC allocation authority in the stimulus package. To read a copy of the letter, click here.
WASHINGTON, D.C. - January 3, 2003 -
The Community Development Financial Institutions (CDFI) Fund late last year made available via its Online Help Desk the census tracts that qualify for new markets tax credit (NMTC) purposes under the 2000 Census.
Thus far, community development entities (CDE) have relied on data from the 1990 Census in determining if a census tract qualifies as a low-income community. CDEs should consult with their tax advisors to determine if they should use the 1990 or 2000 Census information in determining whether a census tract qualifies as a low-income community.
Further guidance will be available in the February issue of the NMTC Report, the industry's first monthly publication dedicated to the new markets tax credit.