Current through Register Vol. 40, No. 6, March 31, 2022
(1) Only an Applicant
that is certified as a Qualified Community Development Entity under the Federal
New Markets Tax Credit Program and has entered into an allocation agreement with
the CDFI Fund is eligible to apply for an allocation of Qualified Equity
Investment authority under the Program.
(2) Commerce shall begin accepting applications
on August 31, 2012.
are encouraged to identify or name in the Application the Qualified Active
Low-income Community Businesses in which they will invest, but at a minimum each
Applicant must provide the amount of investment and the calendar year in which
the investment will be issued and a detailed description of the types of
Qualified Low Income Community Investments the Applicant will make, such
description to be in form and substance acceptable to the Department. The
Department encourages the Applicant to provide examples of other similar types of
Qualified Active Low Income-Community Businesses in which the Applicant has
previously invested under the Federal New Markets Tax Credit Program.
(4) The Applicant should include the name,
address, tax identification number of the entity, and evidence of the entity's
certification as a Qualified Community Development Entity, identity of the
investors which the Applicant anticipates will invest in the Applicant, a
certificate executed by an executive officer of the entity attesting that the
allocation agreement remains in effect and has not been revoked or cancelled by
the Community Development Financial Institutions Fund, a description of the
proposed amount, structure, and purchaser of the equity investment or long-term
debt security, and any other information and/or documentation required in the Act
or otherwise required by the Secretary including, without limitation, information
and/or documentation otherwise required by applicable law. In the case of any
conflict between this chapter and the Act the provisions of the Act shall
(5) If Tax Credits are
allocated to a partner, member or shareholder of a "pass-through" entity pursuant
to Section 5 of the Act, the Applicant, or the successor holder of Qualified
Equity Investment authority under paragraph 12 of this section, must notify
Commerce of such allocation of Tax Credits, including the name and Employee
Identification Number of any such ultimate user of the Tax Credits, prior to such
taxpayer claiming Tax Credits on any tax return. A Qualified Community
Development Entity shall notify Commerce of any subsequent allocation of Tax
Credits pursuant to Section 5 of the Act and of any subsequent holder of a
Qualified Equity Investment under Section 4 of the Act.
(6) A nonrefundable Application fee of five
thousand dollars ($5,000) shall accompany each Application. The fee shall be paid
in the form of a cashier's check or certified check drawn on the funds of a bank
with a physical location within the State and payable to the Alabama Department
of Commerce. Applications shall be submitted by hand or certified mail to Alabama
Department of Commerce, Alabama Center for Commerce, 401 Adams Avenue, Suite 670
Montgomery, Alabama 36104. Attention: Secretary of Commerce.
(7) Within 60 days after receipt of a completed
Application, Commerce shall review the Application for eligibility and shall
either grant or deny the Application in full or in part and inform the applicant
of the grounds for any denial. If granted, this document will serve as Notice of
Certification. The date of receipt shall be the date upon which Commerce marks
the Application received. The date on which the application is granted or denied
will be the date of the letter indicating such decision to the
(8) If denied due to
insufficient documentation, the Applicant will have 15 days from the notice of
denial to complete and/or modify the Application and provide any additional
information required by Commerce. If approved, the Application shall be
considered complete as of the original date of submission. If the Applicant fails
to provide the information or complete its original Application, the original
Application shall remain denied and any subsequent allocation request shall be
resubmitted in full. The 15-day time period will be determined by the date on the
denial letter and the post-mark date of the letter containing the requested
(9) If additional
documentation submitted pursuant to paragraph (8) is provided to the Department
within 15 business days and such documentation is deemed sufficient, the
Department shall provide the applicant with a Notice of Certification within 30
days of the receipt of the additional information. The date on which the
Application is granted or denied will be the date of the letter indicating such
decision to the Applicant.
Applicant must issue the Qualified Equity Investment in the amount certified
within 90 days after receipt of a Notice of Certification.
A Qualified Community Development Entity
whose own application and/or an affiliated entity's Application which is granted
must provide to the Department all of the following within 3 0 days, as
determined by the post-mark date, of the issuance of the Qualified Equity
(a) Evidence of issuance of
Qualified Equity Investments required by paragraph (9). Such evidence must
include a bank statement of the Applicant reflecting such investment equal to the
certified amount, and any other evidence requested by the Secretary.
(b) The name, address, tax identification
number, and copy of certification of each Qualified Community Development Entity
in which the Applicant invested and the amount invested in each entity.
(c) The type of tax the credit allowed by the
Act will offset.
(d) To the extent
the purchaser is a Subchapter K Entity pursuant to §
Code of Ala. 1975, the name and employee identification
number of each owners/shareholders/ member of the purchaser, and the allocation
agreement determining the amount of credit assigned to each owner/
shareholder/member of the Applicant. The information supplied should be based on
the issuance date required by paragraph (9).
(e) All other information as required by
Section 7 of "the Act" unknown to the Applicant as of the date of
approved Applicant may assign all or a portion of its Qualified Equity Investment
authority to one or more partners, members or shareholders of the Applicant,
provided the applicant notifies Commerce of such transfer and such transferee
Qualified Community Development Entity meets all of the requirements of a
Qualified Community Development entity under the program. Such notice of transfer
shall include the information set forth in the Application for all such
transferees of Qualified Equity Investment authority.
(13) Applicants that do not receive a cash
investment or issuance of the Qualified Equity Investment equal to the allocation
within 90 days after receipt of the notice of certification, as determined by the
post-mark date of the certification, may not issue the Qualified Equity
Investment, their respective certifications will lapse and they will be required
to reapply to the Department for certification.
(14) Lapsed certifications revert back to the
Department and shall be reissued, first, pro rata to other Applicants whose
Qualified Equity Investment allocations were reduced under Section 7(e) of the
Act and, thereafter, in accordance with the Application process.
(15) The Applicant shall provide to the
Department any changes in allocations pursuant to Section 7(d) of the Act. In
compliance with this rule, the Applicant will review any changes in allocation as
of the anniversary date of the issuance of the Qualified Equity Investment and
provide such changes in allocation to the Department within 30 days of the
anniversary date of the issuance of the Qualified Equity Investment as required
by paragraph (9). Such notice will include the name, employee identification
number and amount of credit allocated for each owner/shareholder/member of the
Applicant and will be required in each of the six years subsequent to the date of
issuance of the Qualified Equity Investment.
(16) Tax Credits claimed under this Act shall
not be saleable or transferable. However, Tax Credits earned by a "Subchapter K
entity" as defined by §
Code of Ala. 1975 may be allocated to the partners,
members or shareholders of that entity in accordance with Section 5 of the Act.
Only the owners/shareholders/members owning an interest in the Applicant as of
the anniversary date of the issuance of the Qualified Equity Investment will be
allowed to deduct a credit pursuant to the Act.
(17) Copies of all Notices of Certification and
all other written notices issued by or received from Applicants by the Department
affecting eligibility, allocation or reallocation of Tax Credits shall be sent by
Commerce to the Department of Revenue or the Department of Insurance, as
applicable, within 30 days after issuance or receipt.