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109.04.5-2. Allocation of Volume Cap after September 1 of Each Year and in Shortage Situations.

AR ADC 109.04.5-2Arkansas Administrative Code

West's Arkansas Administrative Code
Title 109. Development Finance Authority
Division 04. Multi-Family Housing
Rule 5. Second Amended Rules and Regulations Regarding Allocation of the State Volume Cap for Private Activity Bonds
Ark. Admin. Code 109.04.5-2
109.04.5-2. Allocation of Volume Cap after September 1 of Each Year and in Shortage Situations.
Until September 1 of each year, the statutory allocations of volume cap to the Arkansas Development Finance Authority and the Arkansas Student Loan Authority made pursuant to Arkansas Code Annotated Sections 15-5-603(a)(1) and (3) shall be preserved. Pursuant to Arkansas Code Annotated Section 15-5-603(c), such allocations, if not used or reserved by September 1, shall be subject to reservation by any issuer in the State. The regulations contained in this Section 2 shall apply to all Applications for Reservation of volume cap filed after September 1 of each calendar year and when a shortage of volume cap in the General Category (as defined in Section 2.2(a) below) has been declared, or to applications the filing of which will cause a shortage to be declared in the General Category. The provisions of Section 1 shall apply to Shortage Applications to the extent not in conflict with the provisions of this Section 2.
2.1. Determination of Priority. For all Applications for Reservation of volume cap filed after September 1 of each calendar year, or that are filed when a shortage has been declared, or that by their filing cause a shortage to be declared (in each event, a “Shortage Application”), the determination of priority of such Shortage Applications shall be made by the Volume Cap Allocation Committee pursuant to Section 2.4 of these regulations.
2.2. Declaration of Shortage.
(a) The Authority staff shall continuously monitor the filings of Applications for Reservation to determine whether the amount of volume cap requested in the category set forth in Arkansas Code Annotated Section 15-5-603(c), as amended (the “General Category”), if projected on an annualized basis, would equal or exceed one hundred ten percent (110%) of the annual volume cap for such category. If the determination of a shortage has been made, the President of the Authority shall declare a shortage of General Category volume cap in the State.
(b) In making the determination set forth in Section 2.2(a), the Authority shall use the following formula to calculate whether a shortage exists:
[(R + P)/CD] x AD = Total Projected Annual Request
where
“R” equals the total amount of volume cap reserved (including reservations already utilized) in the General Category to the date of calculation;
“P” equals the total amount of cap being requested in the Application for Reservation (plus the amount of any other Applications for Reservation in the General Category received the same day);
“CD” is the total number of calendar days from January 1 to the date on which the calculation is being made; and
“AD” is the number 243, representing the number of days in the year from January 1 to September 1, (or, in leap years, 244).
2.3. Volume Cap Allocation Committee. A Volume Cap Allocation Committee is hereby established, comprised of the following members: the Director of the Arkansas Department of Economic Development; the Director of the Arkansas Department of Finance and Administration; and the President of the Arkansas Development Finance Authority, or their equivalent successors, as appropriate.
2.4. Powers and Duties of Volume Cap Allocation Committee.
(a) Whenever a shortage has been declared pursuant to Section 2.2, the Volume Cap Allocation Committee shall meet, either in person or by other means of communication. At such meetings, the Volume Cap Allocation Committee shall have the authority to (i) determine the relative priority of Applications for Reservations; (ii) to reduce the amount of volume cap to be allocated to any Application for Reservation; (iii) to deny an Application for Reservation; or (iv) to defer for a period of time an Application for Reservation. The Volume Cap Allocation Committee shall consider and decide all appeals of decisions made by the President of the Authority pursuant to these regulations.
(b) In making the determinations set forth in Section 2.4(a), the Volume Cap Allocation Committee may consider the following factors, none of which shall be, in and of itself, necessarily determinative of the decision of the Volume Cap Committee:
(i) the relative Filing Times of the Applications for Reservation;
(ii) the feasibility of closing the bond issue within the Reservation Period;
(iii) the benefits to the State from the project or activity to be financed, including but not limited to, the creation of jobs, the increased availability of capital for housing, the increased availability of educational opportunities, the economic impact of a project, and the impact of the project or activity on the health, safety and welfare of the State;
(iv) the area of the State to be most benefitted from the issuance of the bonds, including but not limited to, whether the issuance of the bonds will tend to alleviate conditions in an economically distressed area of the State;
(v) whether a project is likely be moved to another state if not timely financed;
(vi) whether the financing of the project could be delayed until the succeeding calendar year without adverse impact on the project;
(vii) the policy objectives of the State; and
(viii) such other factors as are deemed appropriate by the Volume Cap Allocation Committee.
(c) The Volume Cap Allocation Committee shall have the authority to issue letters committing volume cap for the next succeeding calendar year to a particular bond issue or bond issues for which the total amount of volume cap requested was not allocated in the year in which it was requested, and any such commitment shall take precedence over these regulations in such succeeding calendar year. The Volume Cap Allocation committee shall also have the authority to direct the President of the Authority to carry forward unused volume cap amounts for specific categories if such action is deemed necessary or desirable in accomplishing the allocation goals of the Volume Cap Allocation Committee.
Current with amendments received through December 15, 2023. Some sections may be more current, see credit for details.
Ark. Admin. Code 109.04.5-2, AR ADC 109.04.5-2
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