The Agency has typically allocated LIHTCs to projects that receive financing from the Agency, whether in the form of Private Activity Bond Credits or LIHTCs subject to the State Credit Ceiling. Under the Agency's current QAP, allocations and allowances of LIHTCs are made as part of the Agency's overall financing process for residential rental projects located in New York State. No provision is made for an application procedure for projects which may seek no other form of financing other than LIHTCs from the Agency.

The Agency now anticipates that it will receive applications for Private Activity Bond Credits from projects financed by tax exempt bonds from issuers other than the Agency. Namely, DHCR, which has to date allowed Private Activity Bond Credits to New York State Industrial Development Agencies (“IDAs”), is proposing a change in regulations that, in conjunction with the Agency's proposal, will effectively transfer responsibility for the allowance and monitoring responsibilities related to these LIHTCs to the Agency. Accordingly, the Agency proposes to amend its current QAP to provide a procedure for the allowance of LIHTCs to projects financed by other issuers' Private Activity Bonds, but applying to the Agency for LIHTCs.

The proposed procedure is set forth in a proposed Section 2188.4(j):

(j) Projects Financed By an Other Issuer's Private Activity Bonds.

(1) Projects financed by tax-exempt bonds from an issuer other than the Agency subject to the Private Activity Bond Volume Cap in accordance with Section 42(h)(4)(A) of the Code may be allowed LIHTC which is not taken into account regarding the State Credit Ceiling. The Agency's President and Chief Executive Officer, or his or her designee, is hereby authorized to take any actions necessary and appropriate to allow LIHTC to qualified residential rental projects located in New York State that are financed by the proceeds of tax-exempt bonds of an Other Issuer subject to the Private Activity Bond Volume Cap, where such allowance is consistent with this QAP.

(2) Complete applications for the allowance of such LIHTCs must be submitted at least 60 days prior to the later of the proposed construction start date or the planned bond sale date in a form approved by the Agency, and will be accepted and processed throughout the calendar year. The Agency may request any and all information it deems necessary or appropriate for project evaluation. If, in the Agency's sole discretion, any submission is incomplete or if documentation is insufficient to complete any evaluation of the proposed project, processing will be suspended. In such instances, the Agency will notify the respective applicant of how the submission is incomplete and provide at least ten business days for the applicant to submit the requested documentation. Complete applications will be reviewed relative to criteria contained herein at § 2188.5 for eligibility and public purpose. Within 60 days after receipt of a complete application the Agency will issue to the applicant a finding as to whether the application is consistent with this QAP and the amount of LIHTC for which the project qualifies pursuant to Financial Feasibility Review. If the application is consistent with this QAP, the applicant will receive processing instructions for a final allocation of credit. If the project is found to be inconsistent with this Plan, the owner will be notified of the reasons for such finding.

(3) The Agency shall charge a reasonable application fee, due at the time of application. A credit allocation fee, in a reasonable amount determined by the Agency, also is due upon request for issuance of IRS Form 8609. A not-for-profit applicant (or its wholly-owned subsidiary) which will be the sole general partner of the partnership/project owner or sole managing member of the limited liability company/project owner may request and be approved for deferral of payment of the application fee until the date of issuance of IRS Form 8609.

(4) In accordance with Code Section 42(m)(2)(D), the issuer of the tax exempt bonds financing a project is responsible for determining the dollar amount of LIHTCs which is necessary for the financial feasibility of such project and its viability as a qualified low-income housing project pursuant to Section 42(g)(1) of the Code throughout the applicable credit period. Such determination must be included in the applicant's request to the Agency for a final allocation of credit. The Agency will process requests for a final allocation of credit within 60 days after the date of receipt of all required documentation including an executed credit regulatory agreement in a form satisfactory to the Agency with proof of recording. The Agency will apply the criteria for Feasibility Review and LIHTC Underwriting, as described herein at § 2188.5(i), in determining the amount for the final credit allocation with respect to such project.

(5) Regulatory Term. The regulatory requirements of projects receiving an allocation or allowance of LIHTC under the terms of this Plan are described in § 2188.5 of this Plan and shall be subject to compliance monitoring as described in § 2188.7 of this Plan.

Additional Sections of the QAP have been amended to apply its provisions to projects financed by an Other Issuer's Private Activity Bonds. To view the amendments to the QAP in their entirety, a PDF document is available at the Agencies website.

1. Statutory Authority

The proposed amendments relate to the Qualified Allocation Plan (“Plan”) of the New York State Housing Finance Agency (“Agency”). The Plan pertains to the allocation of federal low-income housing tax credit (“LIHTC”) by the Agency under § 42 of the Internal Revenue Code. Pursuant to § 44(16) of the Private Housing Finance Law, the Agency is authorized to accept aid in any form from the federal government or any agency or instrumentality thereof and to comply with the terms and conditions thereof. The Agency serves as a sub-allocating housing credit agency with respect to such LIHTCs pursuant to Executive Order No. 135 issued by Governor Cuomo on February 27, 1990, which has been continued by Governor Spitzer's Executive Order No. 5 issued on January 1, 2007. For an allocation of LIHTCs to be valid, under § 42(m) of the Code, such allocation must be made pursuant to a qualified allocation plan that satisfies certain selection and other criteria set forth in § 42(m) of the Code, and that is approved in accordance with rules similar to those set forth under § 147(f)(2) of the Code. As such, the Plan constitutes a rule under § 102(2)(a) of the New York State Administrative Procedures Act, pursuant to which the Agency's Plan has been codified in 21 NYCRR Part 2188.

2. Legislative Objectives

The proposed amendments will authorize the Agency to allow certain LIHTCs, generally referred to as “As of Right” LIHTCs, with respect to projects financed with proceeds of tax-exempt bonds of issuers other than the Agency. The Plan currently does not provide such authority to the Agency.

3. Needs and Benefits

The proposed amendments are required to implement the transfer from the New York State Division of Housing and Community Renewal (“DHCR”) to the Agency of existing housing credit agency authority with respect to As of Right LIHTCs with regard to projects financed by proceeds of tax-exempt bonds of an issuer other than the Agency. The proposed transfer of responsibility is intended to increase the efficiency with which the State of New York participates in the federal LIHTC program.

4. Costs

There are no substantial costs associated with the adoption of or compliance with the proposed amendments. The proposed changes concern the transfer of existing programmatic authority from one State agency to another. Due to the fact that there will be no substantial additional costs to any of the parties involved, no cost analysis is necessary.

a. Costs to regulated parties for implementation of and continuing compliance with the rule.

The proposed amendments will not impose any substantial additional costs on those parties who seek As of Right LIHTCs for projects financed by proceeds of tax-exempt bonds of issuers other than the Agency.

b. Costs to the Agency; the state and local governments for the implementation and continuation of the rule.

There are no substantial costs associated with the adoption of the amended regulations.

c. The information, including the source(s) of such information and methodology upon which the cost analysis is based.

Since there will be no substantial cost to any party involved, no such analysis is necessary.

d. Where an agency finds that it cannot fully provide a statement of costs, a statement setting forth the agency's best estimate, which shall indicate the information and methodology upon which the estimate is based and the reason(s) why a complete cost estimate cannot be provided.

Not applicable because there will be no substantial costs to any party involved in the procedures to be implemented under the proposed rule.

5. Local Government Mandates

The amended regulations do not impose any service, duty or responsibility upon any county, city, town, school district, fire district, or other special district.

6. Paperwork

The amendments to the regulations require only minimal changes to the documentation already necessary with respect to the projects and parties concerned.

7. Duplication

DHCR is in the process of revising its LIHTC Qualified Allocation Plan so as to facilitate the proposed transfer of authority. There are no other relevant rules or other legal requirements of the state or federal governments that may duplicate, overlap, or conflict with the proposed rule.

8. Alternatives

The only alternative to the proposed amendments would be for the Agency to continue to operate in the way it currently does and not be able to allow As of Right LIHTCs with respect to projects that are financed by proceeds of tax-exempt bonds of an issuer other than the Agency.

9. Federal Standards

These amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance Schedule

The proposed amendments will take effect as soon as possible under applicable law.

1. Effect of Rule

The proposed amendments will have no significant effect on small businesses or local governments. The proposed amendments consist of modifications in the Qualified Allocation Plan (“Plan”) of the New York State Housing Finance Agency (“Agency”). The Plan pertains to the allocation of federal low-income housing tax credit (“LIHTC”) under '42 of the Internal Revenue Code. The Agency's Plan has been codified in 21 NYCRR Part 2188. The proposed amendments are necessary and appropriate to implement the transfer to the Agency from the New York State Division of Housing and Community Renewal (“DHCR”) of existing housing credit agency authority with respect to federal LIHTCs for certain categories of qualified residential rental housing projects. DHCR is also in the process of amending its Qualified Allocation Plan to effect such transfer of authority to AHC. Under the proposed rule, small businesses and local governments that are involved in the financing or administration of such projects will interact with the Agency rather than DHCR in relation to LIHTC allocation and compliance monitoring with respect to such projects.

2. Compliance Requirements

The proposed amendments require no substantial reporting, recordkeeping or other affirmative acts for those small businesses and local governments beyond those otherwise applicable with respect to projects participating in the federal LIHTC program.

3. Professional Services

Compliance with the proposed amendments will not require any substantial change with respect to those professional services, if any, that small businesses and local governments may need in relation to LIHTCs for the types of projects to which the Plan pertains.

4. Compliance Costs

The proposed amendments would not impose any substantial initial capital or annual costs on a regulated small business or local government in addition to any such costs otherwise applicable.

5. Economic and Technological Feasibility

There are no special economic or technological requirements for small businesses or local governments for compliance with the proposed amendments. The proposed amendments do not substantially increase or change the need for economic or technical services, nor do they change the types of economic or technological services necessary.

6. Minimizing Adverse Impact

There will be no adverse impact by the proposed amendments.

7. Small Business and Local Government Participation

The Agency will publish a general notice of the proposed amendments to its Plan. The Agency does not anticipate that the proposed amendments to its Plan will have any substantial direct affect on the interests of small business and local government. To provide any interested parties, including small business and local government, with notice of the proposed amendments in addition to that provided by publication in the State Register, and to minimize costs of participation in the rule making process, the Agency will post and solicit comments on the proposed amendments on its website. Copies of the amended regulations will be available upon request in both hard copy and electronic format. The Agency shall respond in a timely manner to any written requests, comments, and questions about the proposed rule.

1. Types and Estimated Numbers of Rural Areas

The proposed amendments to the Qualified Allocation Plan (“Plan”) of the New York State Housing Finance Agency (“Agency”) do not apply specifically to any rural area. The Plan pertains to the allocation of federal low-income housing tax credits by the Agency under § 42(m) of the Internal Revenue Code. The proposed amendments are required to implement the transfer from the New York State Division of Housing and Community Renewal to the Agency of existing housing credit agency authority with respect to federal low-income housing tax credits for certain categories of projects. The Agency's Plan has been codified in 21 NYCRR Part 2188.

2. Reporting, Recordkeeping, and Other Compliance Requirements and Professional Services

There are no substantial reporting, recordkeeping, or other compliance requirements or professional services needed to comply with the proposed amendments to the Agency's Plan specifically in a rural area. With respect to any party that wishes to apply for federal low-income housing tax credits pursuant to the Agency's Plan, the proposed amendments do not substantially increase or change the otherwise necessary reporting, recordkeeping, or other compliance or professional services requirements.

3. Costs

The amendments will have little effect as compared to the rules that are already in effect. The Agency does not anticipate any variation in such costs, if any, with respect to entities in rural areas.

4. Minimizing Adverse Impact

There will be no adverse impact from these amendments. The Agency has considered the approaches suggested under SAPA § 202-bb(2) as well as similar approaches, and anticipates that the proposed amendments will not have any adverse impact on rural areas.

5. Rural Area Participation

The Agency will publish a general notice of the proposed amendments to its Plan. The Agency does not anticipate that the proposed amendments to its Plan will have any substantial direct affect on interests in rural areas. To provide any interested parties, including those in rural areas, with notice of the proposed amendments in addition to that provided by publication in the State Register, and to minimize costs of participation in the rule making process, the Agency will post and solicit comments on the proposed amendments on its website. Copies of the amended regulations will be available upon request in both hard copy and electronic format. The Agency shall respond in a timely manner to any written requests, comments, and questions about the proposed rule.

1. Nature of Impact

The proposed amendments will not have a substantial impact on jobs or employment opportunities because the amendments will not involve creation of substantial regulatory costs or burdens.

2. Categories and Numbers Affected

No categories of jobs or employment opportunities will be affected by the proposed amendments because they will not involve creation of substantial regulatory costs or burdens.

3. Regions of Adverse Impact

No specific regions of New York State will experience disproportionate adverse impact on jobs or employment opportunities because the amendments will not involve creation of substantial regulatory costs or burdens.

4. Minimizing Adverse Impact

Due to the proposed amendments' lack of adverse impact on jobs or employment in the State of New York, the Agency will not take any measures to minimize adverse impacts.

5. Self-employment Opportunities

Not applicable because of the amendments' lack of adverse impact on jobs or employment.