The form of 2012 New Markets Tax Credit Allocation Agreement has been released by the Community Development Financial Institutions (CDFI) Fund. Notably the form allocation agreement has two significant changes. First, the Allocation Agreement provides the following definition of a Real Estate Qualified Active Low-Income Community Business: “shall mean any QALICB whose predominant business activity (i.e. activity that generates more than 50 percent of the business’ gross income) includes the development (including construction of new facilities and rehabilitation/enhancement of existing facilities), management, or leasing of real estate.” In addition, the form of 2012 Allocation Agreement has the following disclosure requirement. “Disclosure to QALICBs. Each time the Allocatee makes one or more QLICs in the form of a loan(s) to, or investment(s) in, a QALICB, it shall disclose to the QALICB, in a separate stand-alone document, any and all direct and indirect NMTC related transaction costs related to the QLICI(s) (e.g. legal, accounting, compliance), fees and compensation that the Allocatee is assessing the QALICB or otherwise requiring the QALICB to incur prior to, during, and at the conclusion of the seven-year NMTC term.”
Governor Christie to Announce HUD Approval of NJ Sandy Action Plan
It is anticipated that today at a news conference with Governor Christie the Governor will announce HUD’s approval of the New Jersey Sandy CDBG DR Action Plan. This approval by HUD of the first tranche of $1.8 billion will pave the way for additional allocations by HUD which may total over $4 billion for New Jersey from a Congressional allocation of $16 billion in CDBG DR funds for Sandy and other natural disasters. Within the approved action plan there is an allocation of $75 million of funds for Neighborhood and Community Revitalization. This program will be administered through the New Jersey Economic Development Authority. Also the action plan provides for an allocation $100 million of funds for the New Jersey Housing and Mortgage Finance Agency. The New Jersey Housing and Mortgage Finance Agency will use these funds with allocations of Federal low income housing tax credits to fund affordable housing projects in counties affected by Super Storm Sandy.
HUD Approves NY State Sandy CDBG Action Plan
On Friday April 26th the U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced federal approval of New York State’s recovery action plan to help homeowners and businesses following Superstorm Sandy, Hurricane Irene, and Tropical Storm Lee. Funded through HUD’s Community Development Block Grant Disaster Recovery (CDBG – DR) program, New York State’s recovery action plan calls for a combined $1.7 billion investment in a variety of housing, infrastructure and business recovery activities. New York State’s approach will focus principally on meeting the immediate recovery needs for housing and business assistance in the communities affected by Hurricane Sandy. These activities include $838 million to support a variety of housing programs and $415 million to assist economic revitalization programs. On January 29th, President Obama signed the Disaster Relief Appropriations Act, 2013 into law, providing a total of $16 billion in CDBG Disaster Recovery funding. HUD quickly allocated $5.4 billion to five states (including New York) and New York City. New York State submitted its required action plan describing how the funds will be used on April 3rd and HUD conducted an expedited review to enable New York State to access these funds as quickly as possible.
Treasury Announces New Markets Tax Credit Awards
Today the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced $3.5 billion in New Markets Tax Credit (NMTC) awards nationwide. The Treasury has awarded 85 certified community development entities with tax credit allocation authority under the tenth award round of the NMTC Program. A list of the certified community development entities which were awarded New Markets Tax Credit allocation can be found at http://www.cdfifund.gov/docs/2012/nmtc/2012%20NMTC%20Award%20Book.pdf
Bipartisan House Support for Hurricane Sandy Tax Relief Bill
A group of 32 U.S. representatives sent House Speaker John Boehner a letter urging tax relief for the victims of Super Storm Sandy. The letter cited tax relief legislation passed in the aftermath of Hurricane Katrina as the basis for the passage of similar tax relief legislation in the aftermath of Super Storm Sandy. The letter urged the adoption of the Hurricane Sandy Tax Relief Act of 2012 (H.R. 6682) which was introduced during the 112th Congress. If adopted this Act includes a temporary, additional $250 million in new markets tax credit allocation authority for investments in areas affected by Super Storm Sandy.
NJHMFA Announces the Fund for the Restoration of Multifamily Housing
The New Jersey Housing and Mortgage Finance Agency has held two information sessions on the Additional Tax Credits/Fund for Restoration of Multifamily Housing which will be funded from the Super Storm Sandy CDBG grant provided to the State of New Jersey from HUD. The proposed Community Development Block Grant Disaster Recovery Action Plan submitted by the State of New Jersey to HUD for approval includes the creation of the Fund for Restoration of Multifamily Housing. This Fund will be administered by the New Jersey Housing and Mortgage Finance Agency (HMFA) and is expected to provide over $104 million in CDBG-DR funding to replenish the stock of quality, affordable housing units lost as a result of Super Storm Sandy. The NHMFA information sessions provided a description of the Fund’s proposed components, which includes leveraging CDBG-DR funds with the federal Low Income Housing Tax Credit Program.
New Jersey Submits Sandy CDBG Action Plan to HUD
New Jersey has submitted the Community Development Block Grant (CDBG) Disaster Recovery Action Plan to the U.S. Department of Housing and Urban Development (HUD) for review and approval. After the initial publication of the Action Plan, the public had an opportunity to comment on the Action Plan during a seven-day period that closed March 19. The Plan submitted to HUD includes the public comments that were submitted along with the State’s responses. After submission of the New Jersey Action Plan HUD has up to 45 days to approve the Action Plan. A copy of the Final CDBG Disaster Recovery Action Plan as submitted to HUD can be found here: http://www.nj.gov/dca/announcements/pdf/CDBG-DisasterRecoveryActionPlan.pdf
Bankruptcy Dollar Amount and Form Changes that May Affect You
Adjustments to certain dollar amounts in the Bankruptcy Code may affect your decision and strategy to either file a bankruptcy or in defending certain actions filed against you or your company. The automatic adjustments to the dollar amounts in various provisions of the Bankruptcy Code, 11 U.S.C. 101 et seq. went into effect on April 1, 2013. You may access the official forms by clicking the following link to the United States Courts:
www.uscourts.gov/…/BankruptcyFormsPendingChanges.aspx
The following highlights some of the noted changes in the Bankruptcy Code:
Continue reading “Bankruptcy Dollar Amount and Form Changes that May Affect You”
Leveraging Sandy CDBG Grants
A prominent mandate of the New Jersey, New York City, and New York State action plans is the leveraging of Sandy CDBG grants with other federal programs and private funds. In this vein, there are several programs which are available to leverage Sandy CDBG funds. Coupling the Sandy funds with the Federal New Markets Tax Credit Program was done Post Katrina and will generate approximately 25% of project costs through Federal Tax Credit equity generated on the remaining 75% of Sandy funds which flow through the New Markets Tax Credit Structure. Under the proposed New Jersey Action plan approximately $100,000,000 is slated to go the New Jersey Housing and Mortgage Finance Agency to be used as a grant similar to TCAP to leverage the Agency’s 9% low income housing tax credit allocation as well as make 4% low income housing tax credit transactions economically feasible. In a similar vein, investment funds are forming with the plan of using private capital to leverage Sandy CDBG funds for projects. These transactions should be attractive to funds because the leverage would be relataively low and the security and financial return on the investment very good. Applicants seeking Sandy CDBG funds should be prepared to demonstrate the leveraging of these funds with public programs and private investment.
New York City Publishes Sandy Action Plan
The City of New York published its Action Plan to allocate $1.77 billion in Hurricane Sandy authorized Community Development Block Grants to the City’s most urgent housing, business and infrastructure needs. Under the proposed Action Plan $720 million will be allocated to Housing with $350 million going to rehabilitating single-family houses, $250 million to multi-family houses and $120 million to public housing. $325 million is allocated to assist businesses. $100 million will be available in grants to businesses. Small and mid-sized businesses will be eligible for $100,000 grants and larger businesses in hard-hit areas will be eligible for $1 million grants. In addition $145 million will be disbursed through competitions rewarding innovative investment ideas for neighborhood growth and infrastructure improvements. Under the Action Plan $400 million is allocated to Infrastructure and City Services including public services, emergency demolition, debris removal, code enforcement, and reconstruction of public facilities. Finally the Action Plan references $327 for Resiliency Investments which program will be detailed in a future amendment to the Action Plan.