N.J. Admin. Code § 5:80-33.37

Current through Register Vol. 56, No. 18, September 16, 2024

Section 5:80-33.37 - Exchange of credits

(a) A sponsor may return previously allocated credits to the Reserve in exchange for an allocation of current year credits or, at the discretion of NJHMFA, a binding commitment to allocate credits from future years' tax credit authority if the exchange is made after September 30, in an amount not to exceed the amount of the returned credits, if the sponsor establishes to the satisfaction of the Tax Credit Committee that the sponsor, despite its timely and diligent efforts, is in jeopardy of failing to meet the placed-in-service deadline for the building with respect to which the prior credits were allocated as a result of either:

1. Litigation that the sponsor could not reasonably have anticipated at the time of application submission; provided, however, that the sponsor has used its best efforts to obtain expeditious review; or

2. Catastrophic events that the sponsor could not reasonably have anticipated or controlled.

(b) To qualify for the exchange permitted in this section, the sponsor must provide the Tax Credit Committee with evidence of:

1. The due diligence performed by the sponsor in attempting to meet the placed-in-service deadline;

2. The specific circumstances causing the delay that jeopardizes the sponsor's compliance with the placed-in-service deadline;

3. The attempted remedial measures taken by the sponsor in order to mitigate the delay; and

4. Any other information that may be requested by NJHMFA staff on behalf of the Tax Credit Committee.

(c) To be eligible for the exchange permitted under this section, the sponsor must establish to the satisfaction of the Tax Credit Committee that:

1. The project with respect to which the prior credits were allocated will meet the Energy Star requirements set forth in the QAP in effect at the time the exchange is requested, if applicable to the type of building; and

2. The project would receive at least 65 percent of the maximum score under the QAP in effect at the time the exchange is requested, based on the point system applicable to the type of project for which the exchange of credits is sought. Negative points related to the full return of tax credits to NJHMFA under the QAP in effect at the time the exchange is requested shall not be imposed based upon an exchange pursuant to this section.

(d) A sponsor who receives an exchange of credits as provided in this section, as well as any affiliate entity effectively under the sponsor's control and any entity that is a related party with respect to the sponsor, shall be precluded from applying for tax credits for a new project for all tax credit cycles in the round following the day on which the Tax Credit Committee approves the exchange. When the sponsor, affiliate entity, and any related party may again apply for tax credits for a new project, negative points related to the full return of tax credits to NJHMFA under the QAP in effect at the time the exchange is requested shall not be imposed based on an exchange pursuant to this section.

(e) No more than one exchange of credits may be approved with respect to a given project, but a sponsor may, in a single application, ask to exchange more than one year's allocation of credits.

(f) To request an exchange of credits, a sponsor must submit to the Tax Credit Committee, by no later than November 1 of the year in which the project is required to place in service based on the original allocation, a letter setting forth the reasons justifying the exchange and including the following:

1. A Sponsor Certification for Reapplication;

2. The reapplication fee set forth at the QAP's fee provision in effect at the time the exchange is requested;

3. Evidence of the project's continued eligibility under the requirements of the QAP as in effect at the time of the original allocation; and

4. Evidence of the project's continued financial feasibility as required at 26 U.S.C. § 42.

(g) Projects that request an exchange of a binding commitment of credits shall be subject to the timing, application, and eligibility/justification limitations and requirements of this section.

N.J. Admin. Code § 5:80-33.37

Recodified to N.J.A.C. 5:80-33.35 by R.2003 d.300, effective 7/21/2003.
See: 35 N.J.R. 1616(a), 35 N.J.R. 3298(b).
New Rule, R.2005 d.271, effective 8/15/2005.
See: 37 N.J.R. 1109(a), 37 N.J.R. 3036(a).
Amended by R.2006 d.112, effective 3/20/2006.
See: 37 N.J.R. 3879(a), 38 N.J.R. 1432(a).
In introductory paragraph (a), added "or, at the discretion of NJHMFA, a binding commitment to allocate credits from future years' tax credit authority if the exchange is made after September 30"; in (d), substituted "the next tax credit cycle" for "a period of 365 days".
Amended by R.2008 d.133, effective 5/19/2008.
See: 40 N.J.R. 839(a), 40 N.J.R. 2429(b).
In (a)1, deleted "brought by parties other than the sponsor and" following "Litigation" and inserted "at the time of application submission".
Amended by R.2009 d.154, effective 5/4/2009.
See: 41 N.J.R. 917(a), 41 N.J.R. 1994(a).
Added new (b); recodified former (b) through (e) as (c) through (g); in the introductory paragraph of (g), inserted a comma following "exchange of credits"; and added (h).
Amended by R.2013 d.086, effective 6/17/2013.
See: 45 N.J.R. 530(a), 45 N.J.R. 1511(a).
Deleted (b); and recodified former (c) through (h) as (b) through (g).

Amended by 56 N.J.R. 343(b), effective 3/4/2024