Montana Administrative Register Notice 8-111-121 No. 4   02/27/2014    
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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 March 19, 2014, at 1:00 p.m., the Department of Commerce will hold a public hearing in Room 226 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 March 14, 2014, 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 "Montana Low Income Housing Tax Credit Program 2014 2015 Qualified Allocation Plan," which sets forth the application process and selection criteria used by the board for evaluation and selection of projects to receive awards for allocation of tax credits for calendar year 2014 2015, 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) remains the same.


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 2015 Qualified Allocation Plan for the Montana Housing Tax Credit Program.


Federal low income housing tax credits are allocated by the federal government to the states, according to their population, for allocation to particular buildings. Each state's share of federal low income housing tax credits is allocated to particular buildings under programs administered by the respective states' housing credit agencies. The Montana Board of Housing is Montana's housing credit agency for purposes of administering the tax credit program and allocating tax. In Montana, the program is now known as the Montana Housing Tax Credit Program. Federal law requires that 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 2015 QAP. Thereafter, at its December 9, 2013 meeting, the board considered and approved public notice and distribution of the proposed 2015 QAP. After public notice of the proposed 2015 QAP and of the opportunity for public comment was published and distributed, a public hearing on the proposed 2015 QAP was held on January 8, 2014 and written comments were also received. At its January 22, 2014 meeting, after considering all written and oral comments on the proposed 2015 QAP, staff recommendations, additional public comment and various proposed revisions in response to comments, the board approved the 2015 QAP for submission to and approval by the Montana Governor, as required by the federal tax credit statute, 26 U.S.C. § 42. The 2015 QAP has been submitted to the Governor for approval. Adoption of the proposed rule is contingent upon the Governor's approval of the 2015 QAP. 


A copy of the 2015 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)  Letters of intent Pre-applications and applications for tax credits shall be prepared and submitted in conformance with the criteria and requirements contained in the QAP.

(2)  Letters of intent Pre-applications and applications shall be submitted to the board 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)  At a board meeting after the pre-application letter of intent submission deadline and before the application submission deadline, the board staff will provide an opportunity for applicants to present letters of intent 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 there will be no applicant presentations and the board will not make any award determination at this meeting. Board Presentations, questions, comments, 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 submission of full applications, board staff will evaluate each application for conformance with the threshold and other requirements of 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 further evaluated and scored according to the development evaluation criteria of the QAP. The points awarded to each project pursuant to the evaluation criteria of the QAP are for the purposes specified in (9), below, and not for purposes of ranking projects for allocation of tax credits. Following application evaluation and scoring, board staff may provide recommendations to the board for allocation of tax credits to qualifying projects.

(5)  After 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 to the board 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.

(6)  Copies of all applications and other information submitted to the board in connection with applications are available to other applicants for tax credit projects and members of the public to the extent provided and according to under the procedures specified provisions contained in the QAP.

(7) remains the same.

(8)  At the award determination meeting provided under (6)(7), applicants 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 (6) to respond to any negative comments regarding their respective projects or applications.

(9)  The board will select those projects to receive an allocation award 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 development evaluation criteria of the QAP is for the purposes of determining that the projects meet at least a the minimum threshold criteria required for further consideration under the QAP and to assist the board in evaluating and comparing projects. Development evaluation Evaluation criteria scoring is only one of several considerations taken into account by the board and does not control the selection of projects that will receive an award or allocation of tax credits. In addition to any other selection criteria specified in the QAP, the board may consider the following factors in selecting projects for an award or allocation of tax credits to qualifying projects:

(a)  the geographical distribution of tax credit projects;

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

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

(d)  the need for affordable housing in the community, including but not limited to current vacancy rates;

(e)  rehabilitation of existing low income housing stock;

(f)  sustainable energy savings initiatives;

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

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

(i)  cost of construction, land, and utilities, including but not limited to costs/credits per square foot/unit; and/or

(j)  the frequency of awards in the respective areas where projects are located.


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 2015 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 either orally or in writing at the hearing. Written data, views, or arguments may also be submitted 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., March 27, 2014.


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 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.


9. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rules will not significantly and directly impact small businesses.




/s/ G. Martin Tuttle                                        /s/ Douglas Mitchell                        

G. MARTIN TUTTLE                                    DOUGLAS MITCHELL

Rule Reviewer                                              Deputy Director

                                                                       Department of Commerce


Certified to the Secretary of State February 18, 2014.



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