1. CCML NMTC Roundtable Call March 7, 2017
Topics: QEI Closeout Report, Sub-CDE Dissolution Report, and Changes to the CY CY 2016 Allocation Agreement and NMTC FAQs updated January 2017
Moderators:
Ursula Eatmon, Wells Fargo Community Investment & Lending
Traci Vaine, CEI Capital Management LLC

2. QEI Closeout Report: Overview
CDFI Fund’s solution to aggregate an Allocatee’s use of Qualified Equity Investments (“QEI”) and to gather information on the status of the (Qualified Low-Income Community Investment (“QLICI”) and (“Qualified Active Low-Income Community Business”) QALICB at the end of the tax credit compliance period.
DUE: The first QEI Closeout Report submission deadline was extended from December 16, 2016 to February 28, 2017.
Going forward, the QEI Closeout Report must be filed within thirty (30) days after the final Institutional Level Report (“ILR”) and Transaction Level Report (“TLR”) has been submitted.
The report can be accessed through CIIS

3. QEI Closeout Report: Data Points
Loan Loss Reserve (Dollar amount)
Loan Loss Reserves Usage at Closeout (This field will be disabled if a response of zero is provided for Loan Loss Reserves.)
Is this a Performing on Non-Performing Loan
Performing (payments for the loan have been made in full and on time)
Non-Performing (payments for the loan have not been made for at least 90 days) 
Refinanced or Sold
If Refinanced by Affiliate (with CDE) Entity or Refinanced by Non-Affiliated (with the CDE) Entity is selected, you’ll need to provide an additional response regarding the nature of the financing
Converted to Equity (Yes or No)
Reason for the QLICI Charge-Off or Restructuring (Only available if QLICI status is charged-off or restructured with charge-off.)
Considering the proposed products in the Allocatee’s original Allocation Application, was the overall financing package to this QALICB intended to allow the QALICB to acquire all or a portion of the residual value of the tax credit equity? (Yes or No)

4. QEI Closeout Report: Data Points
Was this financial note structured to allow the QALICB to acquire all or a portion of the residual value of the tax credit equity? (Yes or No)
To the extent the investment was structured to allow the QALICB to acquire a portion of the QLICIs at the end of the 7-year compliance period, quantify the value of the investment acquired by the QALICB at the end of the 7-year compliance period as a dollar amount. (The “value received” should be minus the put price and exit fees paid by the QALICB)
Status of the QALICB at end of tax credit period or date of dissolution, termination, or write-off
If Real Estate: Placed into Service or Not placed into Service (this option requires additional comments)
If Non-Real Estate: Continues as a going concern or No long in existence (this option requires additional comments)
Business Description- The system will pre-populate the business description provided in the most recently submitted TLR.

5. QEI Closeout Report: Tips
Input text in every data point box on the report, the report will not submit unless there is text in each data point text box.
Business Description – We needed to input this information.
QEI Closeout Report data points are as of the date of unwind, so the data can be collected throughout the year as unwinds are being completed.
We found that not every QEI we had reported on during the 7 year compliance period was listed on the QEI Closeout Report.
Access CDFI Fund Guidance:
SOURCE: CDFI Fund Guidance QEI Closeout Report CIIS 14.0

6. QEI Closeout Report: Tips
Other tips or issues encountered?

7. Sub-CDE Dissolution Report: Overview
This process allows the Allocatee to report the dissolution of the the Sub- CDE entity when: 1) a transaction has completed its 7-year compliance period; 2) the Sub-CDE entity is no longer involved in the New Market’s activity, or 3) the Allocatee has lost control of the Sub-CDE.
This process is completed in the “Sub-CDE Dissolution” portal in CIIS.

8. Sub-CDE Dissolution Report: Data Points
Confirm the data points that will auto fill (Allocatee Name, Sub-CDE Certification Number). The Sub- CDE Certification Number data point will auto-fill when you select the applicable Sub-CDE entity.
Date of Dissolution: Report: 1) the date that the Sub-CDE entity dissolves or, 2) the date the sub- allocatee completes its compliance period, exists the NMTC transaction and is no longer controlled by the allocatee.
Reason for Dissolution:
Completion of NMTC Credit Period. (7 year compliance period)
No NMTC activity,
Loss of Control by Allocatee - Applicable when the Allocatee redeemed its membership interest in the Sub-CDE.
Other –Provide details in the “Reason for Dissolution Details” text box.
Complete Certification Statement
SOURCE: Sub-CDE Dissolution Report User Guidance CIIS 12.1

9. Sub-CDE Dissolution Report:
New Markets Tax Credit (NMTC), Compliance and Monitoring Frequently Asked Questions – updated January 2017.
Question 55: What happens when a Subsidiary Allocatee has completed the seven-year NMTC compliance period?
In the event that a Subsidiary Allocatee (Sub-CDE) completes its compliance period, exits the NMTC transaction and the Allocatee no longer controls the Subsidiary Allocatee, the Allocatee will notify the CDFI Fund via the “Sub-CDE Dissolution Report”.
By submitting the notice of dissolution via the QEI Dissolution Portal, the CDFI Fund and Allocatee mutually acknowledges dis-enjoinment to the applicable Allocation Agreement(s).
Note: the Allocatee will continue to bear responsibility for any additional reporting associated with the dissolved, decertified or dis-enjoined Sub-CDE and any information regarding Events of Default, as set forth in the termination section (Sec. 9.13) of the applicable Allocation Agreement(s).

10. Sub-CDE Dissolution Report: Tips
Have the Allocatee’s Employment Identification Number (EIN) handy, as well as any documents to support the date of dissolution.
As no specific confirmation is provided by CIIS that your Sub-CDE dissolution was successfully submitted, we has found it helpful to create a Sub-CDE tracking spreadsheet to record when the Dissolution reports are submitted.
Access CDFI Fund Guidance:

11. Sub-CDE Dissolution Report: Tips
Other tips or issues encountered?

12. New Markets Tax Credit (NMTC), Compliance and Monitoring Frequently Asked Questions – Updated January 2017
Updated questions:
Q4. What happens if Allocatee fails to meet the performance requirements outlines in the Allocation Agreement?
Q22. How does the CDFI Fund measure “innovative investments” for the purpose of meeting Section 3.2(l) of the Allocation Agreement?
Q26. How will the CDFI Fund monitor compliance with the unrelated entity requirement in Section 3.2(d) of the Allocation Agreement?
Q29. What supporting documentation does an Allocatee need to retain in order to demonstrate compliance with investing in areas of higher distress as reflected in Section 3.2(h) Targeted Distressed Communities of the Allocation Agreement? What resources are available to determine if a census tract is in an approved Area of Higher Distress?
Q41. What is a Material Events?

13. New Markets Tax Credit (NMTC), Compliance and Monitoring Frequently Asked Questions – Updated January 2017
Updated questions:
Q43. What are the restrictions on the use of QLICI proceeds to repay or refinance any debt or equity provider, or an Affiliate of any debt or equity provider, whose capital was used, directly or indirectly, to fund a QEI?
Q44. How will the CDFI Fund monitor the restriction on the use of QLICI proceeds to directly or indirectly repay or refinance any debt or equity provider, or Affiliate to any debt or equity provider, whose capital was used, directly or indirectly, to fund the QEI required under the CY NMTC Application?
Q45. Can a QALICB use QLICI proceeds to repay or refinance any debt or equity provider, or Affiliate of any debt or equity provider, and to monetize an asset owned by, contributed, sold, or otherwise transferred to the QALICB (or an Affiliate of a QALICB) including but not limited to the accreted value of an asset?
Q55. What happens when a Subsidiary Allocatee has completed the seven-year NMTC compliance period?

14. Allocation Agreement CY2015-CY2016 (Round 13)
Some notable changes: General Terms and Conditions: Addition of “…or the Controlling Entity, if such fraud or mismanagement by the Controlling Entity would hinder the Allocatee’s ability to perform under the Allocation Agreement…” Article II -Definitions: Addition of “the Allocation Application, the NMTC Allocation Application Q&A Document…” Section 2.14 – Definition of NMTC Allocation Application Q&A Document. Section 3.2 – Authorized uses of NMTC Allocation date changed from September 30 to December 31 (2019). Section 3.2(d)- Additional language addressing the CDFI Fund’s review of any subsequent changes in the QALICB, Allocatee, or Subsidiary Allocatee’s ownership.

15. Allocation Agreement CY2015-CY2016 (Round 13)
Some notable changes: Section 3.2(h)(v)(c) – Addition of clarifying language: “…at least 60% of the projects’ gross income is derived from sales, rentals, services, or other transactions to customers who are LIPs.” Section 3.2(h)(x) – Addition of “…Indian Reservations, Off-Reservation Trust Lands or Alaskan Native Village Statistical Areas, or Hawaiian Home Lands.” Section 3.2(h)(xvi) – Addition of “…Impacted Coal Counties, base realignment and closure areas.” Section 3.2(l)(ii) – Addition of Arkansas and Wyoming as “identified states”. Section 3.2(l)(vi) – Addition of “(vi) QLICIs made in Federal Indian Reservations, Off- Reservation Trust Lands, Hawaiian Home Lands, and Alaska Native Village Statistical Areas.”

16. Allocation Agreement CY2015-CY2016 (Round 13)
Some notable changes: Section 3.3(j) (i)-(ii) - The Allocatee shall not use the proceeds of a QEI to make a QLICI in a QALICB where such QLICI proceeds are used, in whole or in part, to repay or refinance expenditures incurred by a debt or equity provider whose capital was used to fund the QEI, or are used to repay or refinance expenditures incurred by any Affiliate of such a debt or equity provider, except where: (i) the QLICI proceeds are used to repay or refinance documented reasonable expenditures of the debt or equity provider (or its Affiliate), that are directly attributable to the qualified business of the QALICB, and such expenditures were incurred no more than 24 months prior to the QLICI closing date; or (ii) no more than 5% of the QLICI proceeds are used to repay or refinance documented reasonable expenditures of the debt or equity provider (or its Affiliate) that are directly attributable to the qualified business of the QALICB. For purposes of this subsection, refinance includes transferring cash or property, directly or indirectly, to the debt or equity provider or an Affiliate of the debt or equity provider.

17. Allocation Agreement CY2015-CY2016 (Round 13)
Some notable changes: Section Advise the CDFI Fund of Certain Material Events – changed from twenty (20) to thirty (30) days. Section 9.11 – Amendments- Notify the CDFI Fund via CDFI Fund’s Awards Management Information System (AMIS).