Montana Administrative Register Notice 8-111-114 No. 9   05/09/2013    
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In the matter of the amendment of ARM 8.111.602 and 8.111.603 pertaining to the Low Income Housing Tax Credit Program









TO:  All Concerned Persons


1.  On May 29, 2013 at 11:00 a.m., the Department of Commerce will hold a public hearing in Room 228 of the Park Avenue Building at 301 South Park Avenue, Helena, Montana, to consider the proposed amendment of the above-stated rules.


2.  The Department of Commerce will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice.  If you require an accommodation, contact Department of Commerce no later than 5:00 p.m. on May 24, 2013, to advise us of the nature of the accommodation that you need.  Please contact Paula Loving, Board of Housing, Department of Commerce, 301 South Park Avenue, P.O. Box 200528, Helena, Montana, 59620-0528; telephone (406) 841-2840; fax (406) 841-2841; TDD (406) 841-2702; or e-mail ploving@mt.gov.


3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:


            8.111.602  DEFINITIONS

            (1) and (2) remain the same.

            (3)  "QAP" means the board's "Low Income Housing Tax Credit Program  2013 2014 Qualified Allocation Plan," which sets forth the application process and selection, evaluation criteria, and selection considerations used by the board for evaluation and selection of projects to receive awards for allocation of tax credits for calendar year 2013 2014, copies of which may be obtained by contacting the Board of Housing by mail at P.O. Box 200528, Helena, MT 59620-0528, by telephone at (406) 841-2845 or (406) 841-2838, or at the board's web site www.housing.mt.gov.

            (4)  "Tax credit" is a means the federal low income housing tax credit for owners of qualifying rental housing which meets certain low income occupancy and rent limitation requirements pursuant to 26 U.S.C. 42.


AUTH:  90-6-106, MCA

IMP:  90-6-104, MCA


REASON:  The proposed amendments to ARM 8.111.602 are necessary to update the Qualified Allocation Plan ("QAP") definition to reference the 2014 Qualified Allocation Plan for the Low Income Housing Tax Credit Program, to more accurately describe the contents of the QAP and to more accurately define the term "tax credit." 


Low income housing tax credits are allocated by the federal government to the states, according to their population, for allocation to particular buildings.  The Low Income Housing Tax Credit Program ("Program") is administered and tax credits are allocated by a state's housing credit agency.  The Montana Board of Housing is Montana's housing credit agency for purposes of the tax credit program.  Federal law requires that the tax credits allocated to the state by the federal government must be allocated by the state pursuant to a "qualified allocation plan" or "QAP". 


Prior to publication of this notice, the board conducted several public meetings to consider suggestions and comments regarding the provisions of the 2014 QAP.  Thereafter, at its February 25, 2013 meeting, the board considered and approved public notice and distribution of the proposed 2014 QAP.  After public notice of the proposed 2014 QAP and of the opportunity for public comment was published and distributed, the board heard public comment regarding the proposed 2014 QAP at its March 18, 2013 meeting and subsequently received written comments.  At its April 22, 2013 meeting, after considering written and oral public comment on the proposed 2014 QAP and approving various changes in response to comments, the board approved the 2014 QAP for submission to and approval by the Montana Governor, as required by the federal tax credit statute, 26 U.S.C. § 42.  The 2013 QAP has been submitted to the Governor for approval.  Adoption of the proposed rule is contingent upon the Governor's approval of the 20124 QAP. 


A copy of the 2014 QAP is available on the internet at http://housing.mt.gov/About/MF/lihtcallocation.mcpx or by requesting a copy from: Mary Bair, Board of Housing, Department of Commerce, 301 South Park Avenue, P.O. Box 200528, Helena, Montana, 59620-0528; telephone (406) 841-2845; fax (406) 841-2841; or e-mail mbair@mt.gov.


8.111.603  TAX CREDIT ALLOCATION PROCEDURE  (1)  Pre-applications and applications Applications for tax credits shall be prepared and submitted in conformance with the criteria and requirements contained in the QAP.

(2)  Pre-applications and applications Applications shall be submitted to the board for the first and second rounds of allocations on the dates specified in or otherwise designated according to the QAP. The board may extend or change any of the pre-application or application submission or presentation dates or deadlines specified in the QAP if circumstances warrant, and in such event, the board will provide notice of such extension or change by posting on its web site. 

(3)  Following submittal of all applications for allocation of tax credits for each calendar year and prior to scoring and formulation of recommendations by board staff At a board meeting after the pre-application submission deadline and before the application submission deadline, the board will provide an opportunity for applicants to present their respective projects and pre-applications to the board and will provide an opportunity for public comment on proposed projects and pre-applications., all according to the provisions of the QAP.  The board may ask questions of applicants and discuss proposed projects, but will not make any award determination at this meeting.  Presentations, questions, and discussion are for purposes of assisting applicants in presenting better full applications and shall not be binding upon the board in any later award determination or other board process.

(4)  Following such opportunity for presentation and comment submission of full applications, board staff will evaluate each project application for conformance with the threshold and other requirements of criteria in the QAP.  Applications meeting all minimum threshold requirements and not excluded from further consideration under the QAP will be evaluated for the amount of tax credits needed for feasibility and long-term viability and will be evaluated and scored according to the development evaluation criteria of the QAP, using the point system provided for therein. The points awarded to each project are for the purposes specified in (9), below of establishing that the projects meet the criteria set forth in the QAP, and not for purposes of ranking projects for allocation of tax credits. Following their application evaluation and scoring, board staff will may provide recommendations to the board for allocation of tax credits to qualifying projects.

(5)  At the board's meeting in the month of full application submission, the board will provide an opportunity for applicants to again make a presentation regarding their projects and applications to the board and will provide an opportunity for public comment on proposed projects and applications, all according to the provisions of the QAP.

(4)(6)  Copies of all applications submitted to the board are available to other applicants for tax credit projects and members of the public under the provisions contained in the QAP.

(5)(7)  At its one or more regularly scheduled board meetings in the month of April or May of each year, as specified in or otherwise designated according to the QAP, the board will hear public comment and consider award of tax credit allocations in accordance with the QAP. The award of tax credit allocations is not a contested case and the award meeting is not a contested case hearing under Title 2, chapter 4, part 6, MCA.

(6)(8)  At the award determination meeting provided under (6), applicants After scoring and formulation of recommendations by board staff, applicants will not be permitted to make additional presentations to the board but should be available to the board to answer questions regarding their respective applications and shall be provided an opportunity at the board meeting described in (5)(6) to respond to any negative comments regarding their respective projects or applications.

(7)(9)  The board will select those projects to receive an allocation of tax credits that it determines best meet the most pressing housing needs of low income people within the state of Montana, taking into consideration the selection criteria as defined in the QAP. The awarding of points to projects pursuant to the evaluation criteria of the QAP is for the purposes of determining that the projects meet at least a minimum threshold for further consideration under the requirements of the QAP and to provide guidance to assist the board in evaluating and comparing projects, but.  Evaluation criteria scoring is only one of several considerations taken into account by the board and does do not control the selection of projects that will receive an award or allocation of tax credits. The board will allocate tax credits to the projects that it determines best meet the needs of low income people within the state of Montana regardless of the score awarded to each of the several projects or staff recommendations. In addition to any other selection criteria specified in the QAP, the The board may consider the following factors in selecting projects for an award or allocation of allocating tax credits to qualifying projects:

(a)  the geographical distribution of tax credit projects;

(b)  the rural or urban location of the qualifying projects;

(c)  the overall income levels targeted by the projects;

(d)  the need for affordable housing in the community;

(d)(e)  rehabilitation of existing low income housing stock;

(e)(f)  sustainable energy savings initiatives;

(f)(g)  financial and operational ability of the applicant to fund, complete, and maintain the project through the extended use period;

(g)(h)  past performance of an applicant in initiating and completing tax credit projects; and

(h)(i)  cost of construction, land, and utilities.


AUTH:  90-6-106, MCA

IMP:  90-6-104, MCA


REASON: The proposed amendments to ARM 8.111.603 are necessary to revise the tax credit allocation application, evaluation, and award process to conform to changes adopted by the board in the 2014 QAP.


The board has added a separate and additional pre-application step to the allocation process.  The board has determined in consultation with developers and other interested parties that the pre-application process will assist project developers in presenting better full applications and in better refining project proposals.  The pre-application process will allow applicants to obtain feedback regarding proposed projects and project characteristics from board staff and the board before submitting full applications.  In addition, applicants will benefit from knowledge about other projects under consideration.  The board expects that this process will assist developers in presenting projects that better meet the most pressing housing needs of low income individuals in the state of Montana, and proposing to use available tax credits in the most appropriate and efficient manner.


In addition, the board has adjusted the annual application schedule to allow for tax credit awards in December rather than April or May.  This change is necessary to provide successful applicants with the certainty of tax credit awards early enough in the year to take full advantage of Montana's limited construction season and bring projects into service more quickly.


The proposed rule revisions are also necessary to more clearly state the standard for the board's selection of projects to receive tax credits and the criteria that may be considered in making such awards.  These criteria are set forth in detail in the 2014 QAP.


4.  Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to:  Mary Bair, Board of Housing, Department of Commerce, 301 South Park Avenue, P.O. Box 200528, Helena, Montana, 59620-0528; telephone (406) 841-2845; fax (406) 841-2841; or e-mail mbair@mt.gov, and must be received no later than 5:00 p.m., June 6, 2013.


5.  Mary Bair, Department of Commerce, has been designated to preside over and conduct this hearing.


6.  The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to the contact person in section 4 above or may be made by completing a request form at any rules hearing held by the department.


7.  An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.


8.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.




/s/ G. MARTIN TUTTLE                               /s/ MEG O'LEARY               

G. MARTIN TUTTLE                                    MEG O'LEARY

Rule Reviewer                                              Director

                                                                       Department of Commerce


Certified to the Secretary of State April 26, 2013.



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