NAC319.981. Closure of project after receiving reservation of tax credits; extension of time; termination of reservation; reapplication; fees.

     1. Except as otherwise provided in this section, each project that receives a reservation of tax credits must be closed within 270 days after the date the Division provides written notification to the applicant of the reservation. If a project is not closed within that period, the Division will terminate the reservation of tax credits. Before the expiration of the period, the applicant must demonstrate to the Division that he or she has closed the project within that period by providing proof satisfactory to the Division that he or she has:

     (a) Purchased and holds title in fee simple to the project site in the applicant’s name.

     (b) Entered into a written agreement with a contractor who is licensed in this State to begin construction before the expiration of the period.

     (c) Obtained adequate financing for the construction of the project. The applicant must provide written commitments or contracts from third parties.

     (d) Executed a written commitment for a loan for permanent financing for the construction of the project in an amount that ensures the financial feasibility of the project. The commitment may be subject to the condition that the construction is completed and the project is appraised for an amount sufficient to justify the loan in accordance with the requirements of the lender for credit. If the project is a rural development project that receives loans or grants from the United States Department of Agriculture, the applicant must provide a form approved by the Division that indicates that money has been obligated for the construction of the project before the expiration of the period. An advance of that money is not required before the expiration of the period.

     2. A project that is not closed within the period and in the manner specified in subsection 1 will lose its reservation of tax credits unless the Division receives from the applicant a written request for an extension of 45 days and the fee as provided in the annual plan. The request must be accompanied by proof satisfactory to the Division indicating that:

     (a) The requirements for financing the project have been substantially completed;

     (b) The delay in closing was the result of circumstances that could not have been anticipated by and were outside the control of the applicant at the time the application was filed by the applicant; and

     (c) The project will be closed within the 45-day period.

Ê Only one extension may be granted pursuant to this subsection. If the project is not closed before the expiration of the extension period, the reservation of tax credits will terminate.

     3. The Division may terminate a reservation of tax credits at any time if, as determined by the Division:

     (a) The applicant fails to pay the fee for the reservation of tax credits within 30 days after receiving the notice of the reservation from the Division;

     (b) The applicant or project sponsor fails to pursue diligently the construction and completion of the project;

     (c) Any event or other circumstance occurs or is discovered by the Division that is likely to cause the project to fail to comply with any of the requirements for the project or is likely to cause the project to fail to qualify for any tax credits that have been set aside, preference point award or rule for breaking ties for which the tax credits were reserved;

     (d) Any statement or representation made to the Division by the applicant or project sponsor was inaccurate or misleading at the time it was made and that statement or representation is material to any determination by the Division to make or continue the reservation of tax credits;

     (e) The applicant fails to provide any required reports or otherwise comply during the reservation period with the provisions of the Code or any regulations adopted pursuant to the Code, the annual plan or NAC 319.951 to 319.999, inclusive;

     (f) The applicant or project sponsor has, for any other project for affordable housing for which the applicant or project sponsor received a tax credit or financing for the project from the proceeds of tax-exempt bonds, failed to comply with the provisions of NAC 319.951 to 319.999, inclusive, during the compliance period for that project and failed to correct the failure to comply in a timely and reasonable manner; or

     (g) Any other event, circumstance or condition occurs for which a reservation of tax credits may be terminated as provided in the annual plan.

     4. If the Division terminates a reservation of tax credits:

     (a) No fees paid by the applicant will be returned by the Division.

     (b) The applicant may submit a new application for tax credits during any subsequent allocation round conducted during the plan year if the Division accepts new applications for that round. The application must be accompanied by a new application fee. If the applicant receives a reservation of tax credits, the applicant must pay an additional reservation fee in an amount specified in the annual plan.

     (Added to NAC by Housing Div. by R057-97, eff. 1-15-98; A by R103-05, 10-31-2005)