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Federal Register / Vol. 86, No. 172 / Thursday, September 9, 2021 / Notices
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defined in the QAP of the LIHTCallocating agency, or the annual percapita credit authority of the LIHTC
allocating agency, and is the reason the applicant must request multiple allocations over 2 or more years; and 3 all applications for LIHTC for buildings on the site are made in immediately consecutive years.
Members of the public are hereby reminded that the Secretary of Housing and Urban Development, or the Secretarys designee, has legal authority to designate DDAs and QCTs, by publishing lists of geographic entities as defined by, in the case of DDAs, the Census Bureau, the several states and the governments of the insular areas of the United States and, in the case of QCTs, by the Census Bureau; and to establish the effective dates of such lists.
The Secretary of the Treasury, through the IRS thereof, has sole legal authority to interpret, and to determine and enforce compliance with the IRC and associated regulations, including Federal Register notices published by HUD for purposes of designating DDAs and QCTs. Representations made by any other entity as to the content of HUD
notices designating DDAs and QCTs that do not precisely match the language published by HUD should not be relied upon by taxpayers in determining what actions are necessary to comply with HUD notices.
B. Interpretive Examples of Effective Date For the convenience of readers of this notice, interpretive examples are provided below to illustrate the consequences of the effective date in areas that gain or lose QCT or DDA
status. The examples covering DDAs are equally applicable to QCT designations.
Case A Project A is located in a 2022
DDA that is NOT a designated DDA in 2023 or 2024. A complete application for tax credits for Project A is filed with the allocating agency on November 15, 2022. Credits are allocated to Project A
on October 30, 2024. Project A is eligible for the increase in basis accorded a project in a 2022 DDA
because the application was filed BEFORE January 1, 2023 the assumed effective date for the 2023 DDA lists, and because tax credits were allocated no later than the end of the 730-day period after the filing of the complete application for an allocation of tax credits.
Case B Project B is located in a 2022
DDA that is NOT a designated DDA in 2023 or 2024. A complete application for tax credits for Project B is filed with the allocating agency on December 1, 2022. Credits are allocated to Project B

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on March 30, 2025. Project B is NOT
eligible for the increase in basis accorded a project in a 2022 DDA
because, although the application for an allocation of tax credits was filed BEFORE January 1, 2023 the assumed effective date of the 2023 DDA lists, the tax credits were allocated later than the end of the 730-day period after the filing of the complete application.
Case C Project C is located in a 2022
DDA that was not a DDA in 2021.
Project C was placed in service on November 15, 2021. A complete application for tax-exempt bond financing for Project C is filed with the bond-issuing agency on January 15, 2022. The tax-exempt bonds that will support the permanent financing of Project C are issued on September 30, 2022. Project C is NOT eligible for the increase in basis otherwise accorded a project in a 2022 DDA, because the project was placed in service BEFORE
January 1, 2022.
Case D Project D is located in an area that is a DDA in 2022 but is NOT
a DDA in 2023 or 2024. A complete application for tax-exempt bond financing for Project D is filed with the bond-issuing agency on October 30, 2022. Tax-exempt bonds are issued for Project D on April 30, 2024, but Project D is not placed in service until January 30, 2025. Project D is eligible for the increase in basis available to projects located in 2022 DDAs because: 1 One of the two events necessary for triggering the effective date for buildings described in Section 42h4B of the IRC the two events being tax-exempt bonds issued and buildings placed in service took place on April 30, 2024, within the 730-day period after a complete application for tax-exempt bond financing was filed, 2 the application was filed during a time when the location of Project D was in a DDA, and 3 both the issuance of the tax-exempt bonds and placement in service of Project D occurred after the application was submitted.
Case E Project E is a multiphase project located in a 2022 DDA that is NOT a designated DDA or QCT in 2023.
The first phase of Project E received an allocation of credits in 2022, pursuant to an application filed March 15, 2022, which describes the multiphase composition of the project. An application for tax credits for the second phase of Project E is filed with the allocating agency by the same entity on March 15, 2023. The second phase of Project E is located on a contiguous site.
Credits are allocated to the second phase of Project E on October 30, 2023.
The aggregate amount of credits allocated to the two phases of Project E

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exceeds the amount of credits that may be allocated to an applicant in one year under the allocating agencys QAP and is the reason that applications were made in multiple phases. The second phase of Project E is, therefore, eligible for the increase in basis accorded a project in a 2022 DDA, because it meets all of the conditions to be a part of a multiphase project.
Case F Project F is a multiphase project located in a 2022 DDA that is NOT a designated DDA in 2023 or 2024.
The first phase of Project F received an allocation of credits in 2022, pursuant to an application filed March 15, 2022, which does not describe the multiphase composition of the project. An application for tax credits for the second phase of Project F is filed with the allocating agency by the same entity on March 15, 2024. Credits are allocated to the second phase of Project F on October 30, 2024. The aggregate amount of credits allocated to the two phases of Project F exceeds the amount of credits that may be allocated to an applicant in one year under the allocating agencys QAP. The second phase of Project F is, therefore, NOT eligible for the increase in basis accorded a project in a 2022
DDA, since it does not meet all of the conditions for a multiphase project, as defined in this notice. The original application for credits for the first phase did not describe the multiphase composition of the project. Also, the application for credits for the second phase of Project F was not made in the year immediately following the first phase application year.
Findings and Certifications Environmental Impact This notice involves the establishment of fiscal requirements or procedures that are related to rate and cost determinations and do not constitute a development decision affecting the physical condition of specific project areas or building sites.
Accordingly, under 40 CFR 1508.4 of the regulations of the Council on Environmental Quality and 24 CFR
50.19c6 of HUDs regulations, this notice is categorically excluded from environmental review under the National Environmental Policy Act of 1969 42 U.S.C. 4321.
Federalism Impact Executive Order 13132 entitled Federalism prohibits an agency from publishing any policy document that has federalism implications if the document either imposes substantial direct compliance costs on state and local governments and is not required
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