On Friday January 2, the CDFI Fund released an updated Frequently Asked Questions document for New Markets Tax Credit (“NMTC”) questions relating to certification, compliance monitoring, and evaluation. The updated FAQ supersedes a prior document released in September 2011. The updated guidance addresses the following issues:
- Dissolution of subsidiary – Community Development Entities (“CDEs”);
- Termination of Allocation Agreements;
- Designating a “non-real estate qualified equity investment” for purposes of Treasury Directive 9600;
- Clarification of “real estate Qualified Active Low-Income Community Business (“QALICB”) versus a “non-real estate QALICB;”
- Defining Material Events;
- Restrictions on the use of bond proceeds under the CDFI Bond Guarantee Program in NMTC-related activities;
- Process for amending Allocations Agreements, adding subsidiary CDEs, and changing Service Areas;
- Meeting the requirement of Section 3.2(h) of the Allocation Agreement on Targeted Distressed Communities for a QALICB with tangible property in several census tracts;
- Defining “Affordable Housing” for the purpose of meeting Section 3.2(k) of the Allocation Agreement;
- Measuring “Innovative Investment” for the purpose of meeting Section 3.2(l) of the Allocation Agreement; and
- Determining if a Qualified Low-Income Community Investment supports businesses that obtain HUB Zone certification.