Proposed Data Collection; Comment Request: New Markets Tax Credit (NMTC) Program-Allocation Application

ACTION:

Notice and request for comments.

SUMMARY:

The U.S. Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3506(c)(2)(A). Currently, the Community Development Financial Institutions (CDFI) Fund, Department of the Treasury, is soliciting comments concerning the New Markets Tax Credit (NMTC) Program—Allocation Application (hereafter, the Application).

DATES:

Written comments must be received on or before October 25, 2010 to be assured of consideration.

ADDRESSES:

Direct all comments to Rosa Martinez, Acting NMTC Program Manager, 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 to (202) 622-7754. Please note this is not a toll free number.

FOR FURTHER INFORMATION CONTACT:

The Application and the NMTC Program Notice of Allocation Availability (NOAA) for the FY 2010 allocation round (75 FR 4077, April 8, 2010) may be obtained from the NMTC Program page of the CDFI Fund's Web site at http://www.cdfifund.gov. Requests for additional information should be directed to Rosa Martinez, Acting NMTC Program Manager, 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 to (202) 622-7754. Please note this is not a toll free number.

SUPPLEMENTARY INFORMATION:

Title: New Markets Tax Credit (NMTC) Program—Allocation Application.

OMB Number: 1559-0016.

Abstract: Title I, subtitle C, section 121 of the Community Renewal Tax Relief Act of 2000 (the Act), as enacted in the Consolidated Appropriations Act, 2001 (Pub. L. 106-554, December 21, 2000), amended the Internal Revenue Code (IRC) by adding IRC § 45D and created the NMTC Program. The Department of the Treasury, through the CDFI Fund, administers the NMTC Program, which provides an incentive to investors in the form of tax credits over seven years that stimulates private investment capital that, in turn, facilitates economic and community development in low-income communities. In order to receive the tax credit, taxpayers make Qualified Equity Investments (QEIs) in Community Development Entities (CDEs): substantially all of the QEI proceeds must in turn be used by the CDE to provide investments in businesses and real estate developments in low-income communities.

The tax credit provided to the investor totals 39 percent of the amount of the investment and is claimed over a seven-year period. In each of the first three years, the investor receives a credit equal to five percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is six percent annually. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period without forfeiting any credit amounts they have received.

The CDFI Fund is responsible for certifying organizations as CDEs, and administering the competitive allocation of tax credit authority to CDEs, which it does through annual allocation rounds. As part of the award selection process, all CDEs are required to prepare and submit the Application, which includes four key sections (Business Strategy; Community Impact; Management Capacity; and Capitalization Strategy). During the first phase of the review process, each Application is rated and scored independently by three different readers.

In scoring each Application, reviewers rate each of the four evaluation sections as follows: Weak (0-5 points); Limited (6-10 points); Average (11-15 points); Good (16-20 points); and Excellent (21-25 points). Applications can be awarded up to ten additional “priority” points for demonstrating a track record of serving disadvantaged business and communities and/or for committing to make investments in projects owned by unrelated parties. If one or more of the three readers provides an anomalous score, and it is determined that such an anomaly would affect the outcome of the final awardee pool, then a fourth reviewer will score the Application, and the anomalous score would likely be dropped.

Once all of the scores have been finalized, including anomaly score adjustments, those Applications that meet minimum aggregate scoring thresholds in each of the four major review sections (as well as a minimum overall scoring threshold) are eligible to be considered for an allocation. They are reviewed by an internal CDFI Fund panel, with a Lead Panelist making an award recommendation to a Panel Manager, and the Panel Manager making an award recommendation to the Selecting Official. If the Selecting Official's award recommendation varies significantly from the recommendation of the Panel Manager, then a Reviewing Official makes the final award determination. Awards are made, in descending order of the final rank score, until the available allocation authority for a given round is fully expended.

Current Actions: Revision of a currently approved collection.

Type of review: Regular review.

Affected public: CDEs seeking NMTC Program allocation authority.

Estimated Number of Respondents: 249.

Estimated Annual Time per Respondent: 249 hours.

Estimated Total Annual Burden Hours: 62,155 hours.

Requests for Comments: Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval. All comments will become a matter of public record and may be published on the Fund Web site at http://www.cdfifund.gov. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services required to provide information.

Authority: 26 U.S.C. 45D; 26 CFR 1.45D-1.