21846 Federal Register / Vol. 66, No. 84 / Tuesday, May 1, 2001 / Notices

DEPARTMENT OF THE TREASURY

Community Development Financial

Institutions Fund

Guidance, New Markets Tax Credit

Program

AGENCIES: Community Development

Financial Institutions Fund, Department

of the Treasury.

ACTION: Guidance, New Markets Tax

Credit Program.

SUMMARY: Title I, subtitle C, section 121

of the Community Renewal Tax Relief

Act of 2000 (the ‘‘Act’’), as enacted by

section 1(a)(7) of the Consolidated

Appropriations Act, 2001 (Pub. L. 106–

554, December 21, 2000), amended the

Internal Revenue Code (the ‘‘IRC’’) by

adding IRC section 45D, New Markets

Tax Credit. Section 45D requires the

Secretary of the Treasury (‘‘Treasury’’)

to establish a program that will provide

an incentive to investors in the form of

a tax credit over seven years, which is

expected stimulate investment in new

private capital that, in turn, will

facilitate economic and community

development in distressed communities.

Section 45D, among other things, also

requires the Secretary to issue guidance

on (i) how entities may apply to receive

allocations of New Markets Tax Credits

(‘‘NMTCs’’); (ii) the competitive

procedure through which such

allocations will be made; and (iii) the

actions that will be taken to ensure that

proper allocations are made to

appropriate entities. The Secretary has

delegated such authority to the Under

Secretary (Domestic Finance), who has

in turn delegated such authority to the

Director of the Community

Development Financial Institutions

Fund (the ‘‘Fund’’). Pursuant to section

121(f) of the Act, this document

provides guidance on how an entity

may apply to become certified as a

‘‘qualified community development

entity’’ (‘‘CDE’’), how a CDE may apply

to receive an allocation of NMTCs, the

competitive procedure through which

such allocations will be made, and the

actions that will be taken to ensure that

proper allocations are made to

appropriate entities.

In addition, this Guidance seeks

comment from the public as to certain

application and allocation issues that

the Fund may address in subsequent

guidance (see Section VII, ‘‘Pending

Issues,’’ for further detail). All material

submitted in response to this Guidance

will be available at the Fund for public

inspection and copying.

As provided by IRC section 45D(i),

Treasury is authorized to prescribe

regulations relating to the NMTC

Program as may be appropriate,

including regulations that (i) limit

NMTCs for investments that are directly

or indirectly subsidized by other

Federal tax benefits, including the LowIncome Housing Tax Credit under IRC

section 42, and the exclusion from gross

income for certain tax-exempt bond

interest under IRC section 103; (ii)

prevent abuse of the purposes of IRC

section 45D; (iii) provide rules for

determining whether the ‘‘Substantially

All Test’’ found at IRC section

45D(b)(1)(B) is treated as met; (iv)

impose appropriate reporting

requirements; and (v) apply IRC section

45D to newly formed entities.

Simultaneously with the issuance of

this Guidance, the Internal Revenue

Service (‘‘IRS’’) is issuing an Advance

Notice of Proposed Rulemaking (the

‘‘ANPRM’’) that invites comments from

the public on certain issues that the IRS

may address in regulations relating to

the NMTC Program and IRC section

45D.

The Fund has the authority to allocate

to CDEs the authority to issue to their

investors, for calendar year 2001, up to

the aggregate amount of $1 billion in

equity as to which NMTCs may be

claimed; for each of years 2002 and

2003, up to $1.5 billion in equity as to

which NMTCs may be claimed; for each

of years 2004 and 2005, up to $2 billion;

and for each of years 2006 and 2007, up

to $3.5 billion. Amounts not allocated in

any calendar year may be carried over

to succeeding years, to the extent

provided in IRC § 45D(f)(3).

This Guidance does not solicit

applications either for CDE certification

or allocations of NMTCs. The Fund

expects, in the future, to issue

additional guidance that will solicit

CDE certification applications and

applications for NMTC allocations.

DATES: Written and electronic comments

on the issues set forth below in Section

VII, ‘‘Pending Issues,’’ must be

submitted to the Fund by July 2, 2001.

ADDRESSES: Comments in response to

the issues set forth below in Section VII,

‘‘Pending Issues,’’ should be sent by

mail to: Acting Director, Community

Development Financial Institutions

Fund, U.S. Department of the Treasury,

601 13th Street, NW., Suite 200 South,

Washington, DC 20005; by e-mail to

cdfihelp@cdfi.treas.gov; or by facsimile

at (202) 622–8244. This is not a toll free

number.

FOR FURTHER INFORMATION CONTACT:

Information regarding the Fund and its

programs may be downloaded from the

Fund’s web site at http://www.treas.gov/

cdfi.

SUPPLEMENTARY INFORMATION:

I. Definitions

Allocation Agreement: means a formal

agreement, by and between the Fund

and a CDE that has been provided with

a NMTC allocation, that specifies the

terms and conditions of such NMTC

allocation.

Community Development Entity or

CDE: see Qualified Community

Development Entity, below.

Community Development Financial

Institution or CDFI: means an entity that

has been certified by the Fund as

meeting the criteria set forth in section

103 of the Community Development

Banking and Financial Institutions Act

of 1994 (12 U.S.C. 4702). For further

details, refer to the CDFI Program

regulations set forth at 12 CFR 1805.201.

Comprehensive Investment Plan:

means a document, to be included in a

CDE’s application for an allocation of

NMTCs, that provides historical

information and a minimum five-year

investment strategy that offers a detailed

discussion of (a) the applicant’s track

record in making investments and

promoting community development; (b)

the applicant’s financial and operational

capacity, including its ability to track

NMTC investment proceeds; (c) the

capacity, skills, and experience of its

management team; (d) an analysis of its

target market; (e) its plan for raising

capital with a NMTC allocation; and (f)

its strategy for using the proceeds from

such an allocation (including its

financial and community development

underwriting criteria).

Credit Allowance Period: means the

seven-year period beginning on the date

on which a Qualified Equity Investment,

as hereinafter defined, is initially made.

Low-Income Community: means any

population census tract in which (A) the

poverty rate is at least 20 percent, or

(B)(i) in the case of a tract not located

within a Metropolitan Area (as

hereinafter defined), the median family

income for such tract does not exceed

80 percent of statewide median family

income, or (ii) in the case of a tract

located within a Metropolitan Area, the

median family income for such tract

does not exceed 80 percent of the

greater of statewide median family

income or the Metropolitan Area

median family income. With respect to

(B) in the preceding sentence,

possession-wide median family income

shall be used (in lieu of statewide

income) in assessing the status of census

tracts located within a possession of the

United States. Upon application by an

entity for certification as a CDE, the

Fund may designate under IRC section

45D(e)(2) an area within a census tract

Federal Register / Vol. 66, No. 84 / Tuesday, May 1, 2001 / Notices 21847

as a Low-Income Community if (A) the

boundary of the area is continuous; (B)

the area would otherwise meet the

definition of a Low-Income Community

if it were a census tract; and (C) there

is inadequate access to investment

capital in the area (as demonstrated by

studies, surveys, or other analyses

provided by the applicant). In the case

of an area that is not tracted for

population census tracts, the equivalent

county divisions (as defined by the

Bureau of the Census for purposes of

determining poverty areas) shall be used

for purposes of defining poverty rates

and median family incomes. For the

purpose of determining whether a

business meets the definition of

Qualified Active Low-Income

Community Business, as hereinafter

defined, the CDE shall use the most

recent census or other data that is

available at the time of its investment in

the business.

Low-Income Persons: means

individuals residing in Low-Income

Communities having an income,

adjusted for family size, of not more

than (i) for non-Metropolitan Areas, 80

percent of the statewide median family

income; and (ii) for Metropolitan Areas,

the greater of (A) 80 percent of the

statewide median family income or (B)

80 percent of the Metropolitan Area

median family income.

Metropolitan Area: means an area

designated as such by the Office of

Management and Budget pursuant to 44

U.S.C. 3504(e) and 31 U.S.C. 1104(d)

and Executive Order 10253 (3 CFR

1949–1953 Comp., p. 758), as amended.

Qualified Active Low-Income

Community Business: means, with

respect to any taxable year, any

corporation (including a nonprofit

corporation) or partnership if, for such

taxable year: (i) at least 50 percent of the

total gross income of such entity is

derived from the active conduct of a

Qualified Business within any LowIncome Community; (ii) a substantial

portion of the use of the tangible

property of such entity (whether owned

or leased) is within any Low-Income

Community; (iii) a substantial portion of

the services performed for such entity

by its employees are performed in any

Low-Income Community; (iv) less than

five percent of the average of the

aggregate unadjusted bases of the

property of such entity is attributable to

collectibles (as defined in IRC section

408(m)(2)) other than collectibles that

are held primarily for sale to customers

in the ordinary course of such business;

and (v) less than five percent of the

average of the aggregate unadjusted

bases of the property of such entity is

attributable to nonqualified financial

property (as defined in IRC section

1397C(e)). For this purpose, a

proprietorship may be considered a

Qualified Active Low-Income

Community Business if the business

would meet the requirements of the

preceding sentence if it were

incorporated. In addition, the term

Qualified Active Low-Income

Community Business includes any trade

or business, including any program,

department, or division of a business,

that would qualify as a Qualified Active

Low-Income Community Business if

such trade or business were separately

incorporated.

Qualified Business: means any

business that meets the definition found

at IRC section 1397C(d), except that (i)

in lieu of applying IRC section

1397C(d)(2)(B), the rental to others of

real property located in any LowIncome Community shall be treated as

a Qualified Business if there are

substantial improvements located on

such property, and (ii) IRC section

1397C(d)(3) (relating to the rental of

tangible personal property) shall not

apply. The rental to others of residential

rental property (as defined in IRC

section 168(e)(2)(A)) is not a Qualified

Business.

Qualified Community Development

Entity or CDE: means any domestic

corporation or partnership if (A) the

primary mission of the entity is serving,

or providing investment capital for,

Low-Income Communities or LowIncome Persons; (B) the entity maintains

accountability to residents of LowIncome Communities through their

representation on any governing board

of the entity or on any advisory board

to the entity; and (C) the entity is

certified by the Fund as a CDE. A CDE

may also be a limited liability company

(‘‘LLC’’) that meets the above tests.

SSBICs, as hereinafter defined, and

CDFIs will be deemed to be CDEs in the

manner hereinafter set forth.

Qualified Equity Investment: means

any equity investment in a CDE if (A)

such investment is acquired by the

investor at its original issue (directly or

through an underwriter) solely in

exchange for cash; (B) substantially all

of such cash is used by the CDE to make

Qualified Low-Income Community

Investments; and (C) the investment is

designated by the CDE as a Qualified

Equity Investment. Qualified Equity

Investment also includes the purchase

of a Qualified Equity Investment from a

prior holder, to the extent provided in

IRC section 45D(b)(4). Qualified Equity

Investment does not include any equity

investment issued by a CDE more than

five years after the date the CDE receives

a NMTC allocation. For purposes of this

Guidance, ‘‘equity investment’’ means

(A) any stock (other than nonqualified

preferred stock as defined in IRC section

351(g)(2)) in a corporation and (B) any

capital interest in a partnership. An LLC

shall be deemed to be either a

corporation or a partnership, according

to the LLC’s treatment under federal tax

law.

Qualified Low-Income Community

Investment: means (A) any capital or

equity investment in, or loan to, any

Qualified Active Low-Income

Community Business; (B) the purchase

from a CDE of any loan made by such

entity that is a Qualified Low-Income

Community Investment; (C) financial

counseling and other services to

businesses located in, and residents of,

Low-Income Communities; and (D) any

equity investment in, or loan to, any

CDE.

Specialized Small Business

Investment Company or SSBIC: is

defined in IRC section 1044(c)(3). For

further information, contact Austin

Belton, Small Business Administration

(‘‘SBA’’), at 202/205–7027.

II. The New Markets Tax Credit

Program: How the Credit Works

By providing an incentive in the form

of a tax credit over seven years, NMTCs

are intended to stimulate the investment

of $15 billion in new private capital in

CDEs that, in turn, will make

investments in eligible businesses in

distressed urban, rural, and Native

American communities, thus facilitating

economic and community development.

Through the NMTC Program, an

entity may apply to the Fund to be

certified as a CDE (see Section IV,

‘‘Eligibility,’’ for further detail).

Nonprofit entities and for-profit entities

may be certified as CDEs by the Fund.

Only CDEs that are for-profit entities are

eligible to compete for, and receive, an

allocation of authority to issue Qualified

Equity Investments with respect to

which investors will be entitled to claim

NMTCs. A taxpayer (including, for

example, individuals, corporations,

partnerships, and investment funds)

that makes a Qualified Equity

Investment in a CDE that has received

a NMTC allocation from the Fund may

claim a five percent tax credit on the

investment amount for each of the first

three years and a six percent tax credit

for each of the next four years. If the

CDE fails to issue equity investments to

use all or part of its NMTC allocation

within five years from the date of the

Allocation Agreement, the unused

portion of the allocation will terminate.

IRC section 45D(b)(1)(B) requires that

the CDE use ‘‘substantially all’’ of the

cash raised as a result of its NMTC

21848 Federal Register / Vol. 66, No. 84 / Tuesday, May 1, 2001 / Notices

allocation to make Qualified LowIncome Community Investments (the

‘‘Substantially All Test’’). The

Substantially All Test will be treated as

met if at least 85 percent of the aggregate

gross assets of the CDE are invested in

Qualified Low-Income Community

Investments (the ‘‘Safe Harbor Test,’’

found at IRC section 45D(b)(3)). If the

Safe Harbor Test is met, the CDE need

not trace the use of cash from the

particular stock issuance (or other

equity investment) with respect to

which the NMTCs are claimed. The IRS

may address issues related to the

Substantially All Test in subsequent

regulations.

Under IRC section 45D(d)(1)(A),

Qualified Low-Income Community

Investment includes any capital or

equity investment in, or loan to, any

Qualified Active Low-Income

Community Business. Please note,

however, that under IRC section

45D(f)(2)(B), the Fund will give priority

when evaluating whether to award a

CDE with a NMTC allocation to any

CDE that intends to satisfy the

Substantially All Test by making

Qualified Low-Income Community

Investments in one or more businesses

in which persons unrelated to the CDE

(within the meaning of IRC section

267(b) or section 707(b)(1)) hold the

majority equity interest (see Section V,

‘‘Evaluation,’’ below).

If selected for an allocation of NMTCs,

a CDE will receive a Notice of NMTC

Allocation, which will set forth the

amount of the CDE’s NMTC allocation

and describe the general terms and

conditions that will govern said

allocation. The general terms and

conditions will include, among others,

the requirement that the CDE enter into

an Allocation Agreement with the Fund

for the duration of the Credit Allowance

Period and comply with certain

reporting requirements so that the Fund

can monitor the CDE’s compliance with

IRC section 45D, this Guidance, and

subsequent guidance and/or regulations.

The CDE may not issue Qualified Equity

Investments to its investors until such

time as the Fund and the CDE have

executed the Allocation Agreement.

Under IRC section 45D(g)(3), the

following constitute events of recapture:

(i) the CDE ceases to qualify as a CDE;

(ii) the CDE ceases to meet the

Substantially All Test; or (iii) the CDE

redeems Qualified Equity Investments

during the Credit Allowance Period.

The IRS may address recapture issues in

subsequent regulations.

III. Applications

At a future date, the Fund will make

available two application forms: (i) An

application for CDE certification and (ii)

an application for an allocation of

NMTCs. An entity may submit these

applications concurrently or separately

(provided, however, that if they are

submitted separately, the CDE

certification application must be

submitted prior to the submission of an

allocation application). The CDE

certification application form will

require that the applicant provide,

among other items, specific information

relating to its primary mission and its

accountability to residents of LowIncome Communities, as described

below. The NMTC allocation

application form will require that the

applicant provide, among other items, a

Comprehensive Investment Plan.

Further details regarding eligibility and

other program requirements will be set

forth in the application packets, which

will be made available at a future date.

IV. Eligibility

IRC section 45D(c) specifies the

eligibility requirements that each entity

must meet in order to be certified by the

Fund as a CDE. At the time an entity

submits its CDE certification

application, the entity must be a duly

organized and validly existing legal

entity under the laws of the jurisdiction

in which it is incorporated or otherwise

established. As described above, a CDE

is any domestic corporation or

partnership (including LLCs) if (A) the

primary mission of the entity is serving,

or providing investment capital for,

Low-Income Communities or LowIncome Persons; (B) the entity maintains

accountability to residents of LowIncome Communities through their

representation on any governing board

of the entity or on any advisory board

to the entity; and (C) the entity is

certified by the Fund as a CDE.

SSBICs and CDFIs are automatically

eligible to be designated as CDEs, but

must complete abbreviated application

materials in order to receive a CDE

designation from the Fund. Any entity,

regardless of tax status, may apply to the

Fund for designation as a CDE; however,

only for-profit CDEs are eligible to apply

for allocations of NMTCs.

To comply with the primary mission

requirement, an entity must (a) provide

organizational documents that, in the

opinion of the Fund, clearly evidence a

mission of directly serving or providing

investment capital for Low-Income

Communities or Low-Income Persons;

and (b) be able to demonstrate that at

least 60 percent of its activities are

dedicated to directly serving LowIncome Communities or Low-Income

Persons. In order to be certified as a

CDE, an entity must demonstrate that it

maintains accountability to residents of

Low-Income Communities through their

representation on any governing board

of the entity or on any advisory board

to the entity. In the case where a CDE

is a limited partnership or an LLC, this

accountability requirement may be met

if residents of Low-Income

Communities are represented on the

governing or advisory board of the

entity’s managing general partner or

other controlling entity (such as a

nonprofit CDFI). A CDE may maintain

accountability to residents of LowIncome Communities by having board

members who are directly

representative of the Low-Income

Community (i.e., they are Low-Income

Persons or other residents of the LowIncome Community).

A CDE is not limited in the number

of Low-Income Communities that it may

serve or propose to serve.

A CDE certification will last for a

period of 15 years unless it is revoked

or terminated by the Fund. To maintain

its CDE certification, a CDE must certify

annually during this period that the

CDE has continued to meet CDE

certification requirements.

Previous awardees under the Fund’s

Community Development Financial

Institutions Program (the ‘‘CDFI

Program’’) and/or the Bank Enterprise

Award Program (the ‘‘BEA Program’’)

are eligible to apply for allocations of

NMTCs, but such applicants are not

ensured NMTC allocations. Further, the

Fund reserves the right, in its sole

discretion, to declare a NMTC Program

applicant to be ineligible for a NMTC

allocation if the applicant is an awardee

under the CDFI Program and/or the BEA

Program and is out of compliance with

the agreements governing said award(s).

Similarly, the Fund reserves the right, in

its sole discretion, after consultation

with the SBA, to declare a NMTC

applicant to be ineligible for a NMTC

allocation if the applicant is no longer

certified as a CDE by virtue of it no

longer being deemed a SSBIC by the

SBA.

A CDE that is an insured depository

institution may not receive a BEA

Program award for the provision of any

financial assistance or services that are

also Qualified Low-Income Community

Investments if such assistance or

services were provided with cash

proceeds of a Qualified Equity

Investment for which the investor

received the benefits of NMTCs. A CDE

that is an insured depository institution

may not receive both a BEA Program

award and a NMTC allocation for the

same equity investment in a CDE.

Federal Register / Vol. 66, No. 84 / Tuesday, May 1, 2001 / Notices 21849

V. Evaluation

All applications for allocations of

NMTCs will be reviewed for eligibility

and completeness. If determined to be

eligible and complete, each application

for a NMTC allocation will be evaluated

by the Fund on a competitive basis to

determine the applicant’s ability and

strategy for carrying out its

Comprehensive Investment Plan and the

extent to which the applicant will

maximize the effective use of the NMTC

allocation. The Fund will conduct the

substantive review of said applications

in accordance with the criteria and

procedures described in this Guidance,

and subsequent guidance or regulations

that the Fund may issue, which will

include a description of the scoring

system to be used by the Fund in the

evaluation of applications.

Phase One

In Phase One of the substantive

review, each Fund reader will evaluate

applications for NMTC allocations and

award points to be distributed among

the following categories of information

(or others that the Fund deems

appropriate):

(a) Institutional investment and

community development track record;

(b) Financial and operational

capacity;

(c) Capacity, skills and experience of

the management team;

(d) Market analysis;

(e) Capitalization strategy;

(f) Investment strategy;

(g) Projected community development

activities and projected impact.

In addition, as provided by IRC

section 45D(f)(2), the Fund will give

preference to any CDE that (i) has a

record of having successfully provided

capital or technical assistance to

disadvantaged businesses or

communities, or (ii) intends to satisfy

the Substantially All Test by making

Qualified Low-Income Community

Investments in one or more businesses

in which persons unrelated to the CDE

(within the meaning of IRC section

267(b) or section 707(b)(1)) hold the

majority equity interest. For purposes of

(i), the Fund will also consider the

record of the entity controlling the CDE.

A record of having successfully

provided capital or technical assistance

to disadvantaged businesses or

communities may be demonstrated

either by the past actions of the CDE

itself or by an entity controlling the CDE

(e.g., where a new CDE is established by

a nonprofit corporation with a history of

providing assistance to disadvantaged

communities, or where the new CDE is

controlled by a CDFI or SSBIC).

Phase Two

Once the initial evaluation is

completed, the Fund will determine

which applications will receive further

consideration for allocations based on

application scores, written

recommendations of individuals who

performed initial reviews based on the

above stated categories of information,

and the amount of NMTCs available.

Applicants that advance to Phase Two

may receive a site visit and/or an

interview (by telephone or in person) by

a Fund reviewer for the purpose of

obtaining clarifying or confirming

information. At this point in the

process, applicants may be required to

submit additional information about

their applications in order to assist the

Fund with its final evaluation. After

conducting such site visits and/or

telephone interviews, the Fund

reviewers will evaluate all applications

in accordance with the evaluation

criteria outlined above and prepare

recommendation memoranda containing

recommendations on the amount of the

NMTC allocation, if any, that should be

provided to each applicant.

A final review panel of Fund staff will

consider the reviewers’

recommendation memoranda and make

final recommendations to the Fund’s

selecting official. In making its

recommendations, the final review

panel also may consider the

institutional diversity (e.g., size, type,

focus, affiliation), geographic diversity

of applicants, and other factors that the

Fund deems appropriate.

In the case of an applicant that has

previously received financial or

technical assistance awards from the

Fund under the CDFI Program or the

BEA Program, the Fund will consider

the applicant’s level of success in

meeting its performance goals (if

applicable), financial soundness

covenants (if applicable), and other

requirements contained in its existing

award agreement(s) with the Fund.

The Fund’s selecting official will

make the final allocation determination

based on the applicant’s file, including,

without limitation, reader and reviewer

recommendations and the panel’s

recommendation, and the amount of

NMTCs available.

In the case of regulated CDEs, the

Fund’s selecting official reserves the

right to take into consideration the

views of the appropriate Federal

banking agencies. In the case of

applicants that are also SSBICs, the

Fund reserves the right to consult with

the SBA.

The Fund reserves the right to change

these evaluation procedures, upon

public notice, if the Fund deems it

appropriate.

VI. Monitoring

The Fund will collect information, on

at least an annual basis, from each CDE

that is a recipient of a NMTC allocation

and/or a Qualified Low-Income

Community Investment, including such

audited financial statements and

opinions of counsel as the Fund deems

necessary or desirable, in its sole

discretion. The Fund shall use such

information to monitor each CDE’s

compliance with the Fund’s

requirements for certification as a CDE

and the CDE’s compliance with the

provisions of its Allocation Agreement,

and to determine, among other matters,

whether substantially all of the CDE’s

equity raised through its NMTC

allocation is used to make Qualified

Low-Income Community Investments.

The Fund will also use such

information to assess the impact of the

NMTC Program on Low-Income

Communities. The Allocation

Agreement shall include provisions

setting forth the CDE’s reporting

requirements.

VII. Pending Issues

In developing guidance to assist

potential applicants to the NMTC

Program, the Fund has identified certain

issues that may be addressed in

additional guidance and/or regulations.

The Fund invites comments from the

public on these and any other issues on

which the public believes guidance is

particularly needed.

1. IRC section 45D(f)(2) requires that

in making allocations of NMTCs,

priority be given to: (a) any applicant

that has a record of having successfully

provided capital or technical assistance

to disadvantaged businesses or

communities or (b) any applicant which

intends to satisfy the Substantially All

Test by making Qualified Low-Income

Community Investments in one or more

businesses in which persons unrelated

to the CDE hold a majority equity

interest.

(a) How should the Fund implement

this policy? For instance, should the

Fund incorporate preference points into

the scoring? Should the Fund make

awards to organizations that are deemed

competitive and meet one or both of

these criteria before providing an

allocation to any other applicant?

(b) What specific factors should the

Fund consider when evaluating whether

an applicant meets the requirements for

priority treatment?

(c) Should more weight be given to

one priority category over the other and

should an applicant be allowed to

21850 Federal Register / Vol. 66, No. 84 / Tuesday, May 1, 2001 / Notices

receive preference points under both

priority categories?

2. Should there be limits as to the

amount of a NMTC allocation that may

be awarded to an applicant in a calendar

year?

3. During the evaluation process of

NMTC applications, the Fund will

request that applicants provide

information on their track records for

providing capital or technical assistance

to Low-Income Communities and

disadvantaged businesses and the effect

that such investment/technical

assistance has had on such Low-Income

Communities or businesses. Applicants

may also be required to describe the

social underwriting criteria that they

will use when deciding which

companies to invest in. If an applicant

receives a NMTC allocation, it will be

required to report to the Fund on the

ways in which the Qualified Equity

Investments are used to benefit LowIncome Communities.

(a) What indicators should the Fund

assess when evaluating the community

development impact of an applicant’s

prior activities or the social

underwriting criteria of its loan

policies?

(b) On what basis should the Fund

judge how ‘‘successfully’’ capital or

technical assistance has been provided?

(c) What information should the Fund

request from allocation recipients as

indicators for evaluating the

effectiveness of the NMTC Program (e.g.,

number of jobs created or retained,

increases in revenues of businesses

receiving Qualified Low-Income

Community Investments, rates of return

to investors from Qualified Equity

Investments, or number of clients served

at facilities that are developed)?

Authority: Consolidated Appropriations

Act of 2001, Pub. L. 106–554.

Dated: April 20, 2001.

Jeffrey C. Berg,

Acting Director for the Community

Development Financial Institutions Fund.

[FR Doc. 01–10545 Filed 4–30–01; 8:45 am]

BILLING CODE 4810–70–P