Notice 2012-48

Tribal Economic Development
Bonds
Notice 2012–48
SECTION 1. PURPOSE
This notice solicits applications for
allocations of the available amount of national bond volume limitation authority
(volume cap) for tribal economic development bonds (Tribal Economic Development Bonds). The available amount
includes amounts that were previously
allocated and subsequently forfeited under Notice 2009–51, 2009–28 I.R.B. 128
(July 13, 2009), Announcement 2010–88,
2010–47 I.R.B. 753 (November 22, 2010),
and Announcement 2011–71, 2011–46
I.R.B. 770 (November 14, 2011). This
notice also provides related guidance on
the following: (1) application requirements and forms for requests for volume
cap allocations; and (2) the method that
the Department of the Treasury (Treasury)
and the Internal Revenue Service (IRS)
will use to allocate the volume cap.
SECTION 2. BACKGROUND
Section 1402 of Title I of Division B
of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111–5, 123
Stat. 115 (2009), added § 7871(f) to the
Internal Revenue Code (Code). In general,
the purpose of § 7871(f) is to give Indian
tribal governments greater flexibility than
is allowable under the existing standard of
§ 7871(c) through the issuance of Tribal
Economic Development Bonds to finance
economic development projects. Section
7871(f)(1) provides that the Secretary shall
allocate the $2 billion volume cap among
the Indian tribal governments in such manner as the Secretary, in consultation with
the Secretary of the Interior, determines
appropriate.
In Notice 2009–51, the Treasury and
the IRS solicited applications for allocations of volume cap and addressed administrative procedures for the initial allocations of the $2 billion volume cap. On
September 15, 2009, the IRS announced
allocations in an aggregate amount of approximately $1 billion of volume cap for
the first allocation (2009 First Allocation)
of authority to issue Tribal Economic Development Bonds. On February 9, 2010,

July 30, 2012

the IRS announced allocations in an aggregate amount of approximately $1 billion of volume cap in the second allocation (2010 Second Allocation) of authority to issue Tribal Economic Development
Bonds.
Section 7.f. of Notice 2009–51 provides that if bonds were not issued by December 31, 2010, for any or all of the allocation received by an Indian tribal government from the 2009 First Allocation, or
by December 31, 2011, for any or all of
the allocation received by an Indian tribal
government from the 2010 Second Allocation, then any or all of such allocation not
used to issue bonds would be treated as forfeited.
In Announcement 2010–88, the IRS
announced an automatic six-month extension of the administrative deadline to issue
bonds under bonding authority from the
2009 First Allocation from December 31,
2010, to June 30, 2011, and a process by
which Indian tribal governments could
receive an additional six-month extension
of the administrative deadline to issue
bonds under bonding authority from the
2009 First Allocation from June 30, 2011,
to December 31, 2011. Section 3 of
Announcement 2010–88 provides that
an allocation received pursuant to the
2009 First Allocation shall be treated as
forfeited if bonds are not issued by the
applicable deadline.
In Announcement 2011–71, the IRS
notified eligible Indian tribal governments
that they could request a three-month
extension from December 31, 2011,
to March 31, 2012, to issue Tribal
Economic Development Bonds. Indian
tribal governments eligible for such
extension were (1) those that had received
an allocation of volume cap from the
2009 First Allocation if an extension
of the deadline to issue bonds from
June 30, 2011, to December 31, 2011
had been granted pursuant to the process
described in Announcement 2010–88,
or (2) Indian tribal governments that
had received an allocation from the
2010 Second Allocation. Section 4 of
Announcement 2011–71 also provides
that an allocation with respect to which
the Indian tribal government received
an extension pursuant to the process
described in Announcement 2011–71 is
treated as forfeited if bonds were not
issued by March 31, 2012.

102

Notice 2009–51,
Announcement
2010–88, and Announcement 2011–71
provide that any allocation amounts
treated as forfeited may be available for
allocation by the IRS. Indian tribal governments have reported to the IRS the
issuance of Tribal Economic Development
Bonds in the amount of $197,153,357.
Based on these reports and the passage of
the deadlines described above for issuing
Tribal Economic Development Bonds, the
IRS has identified $1,802,846,643 of volume cap that is available for reallocation.
In Announcement 2011–71, and pursuant to Executive Order 13175 on tribal
consultation, the IRS announced that it was
seeking public comment from Indian tribal
governments and other interested members of the public on the reallocation of
available volume cap in order to facilitate
issuance of Tribal Economic Development
Bonds by Indian tribal governments. Pursuant to the Announcement and the Executive Order, consultation sessions were held
in person and by telephone with tribal organizations.
SECTION 3. GENERAL
APPLICATION REQUIREMENTS
Each application for an allocation of
volume cap under § 7871(f)(1) submitted
pursuant to this notice (Application) must
be prepared and submitted in accordance
with this section. By submitting an Application, the applicant agrees to comply
with the requirements of this notice. For
an Application to comply with this section,
among other things, the Application must
be prepared in substantially the same format as the form attached to this notice as
Appendix A. This notice, including Appendix A, may be found electronically under the link “TEB Published Guidance” on
the IRS web site at http://www.irs.gov/taxexemptbond/index.html.
a. Qualified issuer. The Application must be submitted by an Indian
tribal government (Applicant).
See
§ 7701(a)(40)(A) of the Code and Revenue
Procedure 2008–55, 2008–39 I.R.B. 768.
The Application must identify the Applicant, including the Applicant’s Federal
tax identification number, and either: (1)
state that the entity is included on the most
recent list published by the Department of
the Interior in the Federal Register pursuant to the Federally Recognized Indian

2012–31 I.R.B.

Tribe List Act of 1994, Pub. L. 103–454,
108 Stat. 4791, or (2) provide a letter
from the Department of the Interior stating
that the Indian tribal government has been
acknowledged as a Federally recognized
Indian tribe. See section 4.e. of this notice
for pool bond issuers and issuers of Tribal
Economic Development Bonds other than
the Indian tribal government that receives
an allocation.
b. Signatures. The Application must
be signed and dated by an authorized official of the Applicant. For purposes of
the Application, the term “authorized official of the Applicant” means an officer,
board member, employee, or other official of the Applicant who is duly authorized to execute legal documents on behalf of the Applicant in connection with
incurring debt of the Applicant (for example, a tribal chairperson, chief executive
officer, or chief financial officer), similar
to the kind of duly authorized official of
an Indian tribal government who would be
authorized to execute documents in connection with an Indian tribal government’s
declaration of official intent to reimburse
expenditures from the proceeds of a borrowing under § 1.150–2(e) of the Income
Tax Regulations.
c. Contact person. The Application
must designate one or more persons with
knowledge of the project that the Applicant duly authorizes to discuss with the
IRS any information relating to the Application. The designation must include the
designee’s name, title, telephone number,
fax number, and mailing address. If a designee is not an official or officer of the issuer, the Application must include an executed Form 8821 (Taxpayer Information
Authorization) or Form 2848 (Power of Attorney and Declaration of Representative)
authorizing the disclosure of taxpayer information specifically relating to the Application.
d. Addresses. The Application must be
submitted by hard copy accompanied by a
copy of the Application in PDF format on
a CD and sent by mail to the Internal Revenue Service (IRS), SE:T:GE:TEB:CPM,
Attention: Mark Helfer, 1122 Town &
Country Commons, St. Louis, MO 63017.
e. Submission date. Applications will
be accepted by the IRS on an ongoing basis. See section 4 of this notice for further discussion of the general allocation
process.

2012–31 I.R.B.

f. Project description. The Application
must contain the information required by
this subsection f.
(i) Qualified project. The Application
must describe in reasonable detail the
project or projects (project) reasonably expected to be financed with the proceeds of
the Tribal Economic Development Bonds
(proposed bonds), including information
regarding the type and use of the project
and a certification that the project will
qualify for Tribal Economic Development
Bond financing under § 7871(f). Applicants receiving an allocation may use
proceeds of the proposed bonds only to
finance the project or permitted deviations
as further provided in section 6 of this
notice.
(ii) Project cost. The Application must
describe the reasonably expected cost of
the project, including the portion to be financed by the proposed bonds and any portion to be financed by other sources, if any.
(iii) Location of project. The Application must include a certification that the
project’s location is entirely within the Applicant’s reservation. In the case of a joint
project described in section 3.m. of this
notice, the Application must include a certification that the joint project will be located entirely within one or more of the
reservations of the Indian tribal governments receiving an allocation of volume
cap for the joint project.
(iv) Project not used for gaming purposes. The Application must include a
certification that no portion of the proceeds of the proposed bonds will be used
to finance any portion of a building in
which class II or class III gaming, as
defined in section 4 of the Indian Gaming Regulatory Act, Pub. L. 100–497,
102 Stat. 2475, codified at 25 U.S.C.
§ 2701–2721 (1988), is conducted or
housed, or any other property actually
used in the conduct of such gaming. For
purposes of compliance with the limitation
in § 7871(f)(3)(B) on the use of proceeds
of Tribal Economic Development Bonds
for these purposes, the safe harbor
regarding certain determinations with
respect to separate buildings under § 10(b)
of Notice 2009–51 applies.
(v) Approvals. The Application must
state that all required Federal, State, local, and tribal approvals (regulatory and
otherwise) for the project, the proposed
bonds, and any other required financing

103

for the project have been obtained or, if
any approvals have not yet been obtained,
the Application must include a certification that the Applicant reasonably expects
to receive all required approvals in a timely
manner sufficient to permit issuance of the
proposed bonds within the 180-day period
prior to the expiration of the volume cap
allocation (see section 4.g. of this notice). The Application must identify any
required approvals that have not been obtained and must describe the Applicant’s
plan and expected time frame for obtaining such approvals.
g. Plan of financing. The Application must contain a reasonably detailed description of the plan of financing for the
project including (1) the amount of Tribal
Economic Development Bonds expected
to be issued and the amount of proceeds of
such bonds to be allocated to the project,
(2) any reasonably expected other sources
of financing for the project together with a
description of how such financing will be
allocated to the project, and (3) documentation from an independent third party who
is knowledgeable about the marketability
of tax-exempt bonds evidencing that the
proposed bonds are reasonably expected
to be marketable prior to expiration of the
volume cap allocation set forth in section
4.g. of this notice. Documentation that
may be used to meet this requirement includes, among other things, the following:
a bond purchase commitment letter from
an investor; a credit quality assessment evidencing the investment grade credit quality of the proposed bonds from an independent organization that is in the business of
assessing credit quality; a credit enhancement commitment letter from a financial
institution that will enable the proposed
bonds to be investment grade quality; a letter from an underwriter or financial advisor to the effect that the sale of the proposed bonds is likely to be successful in a
timely manner before expiration of the volume cap allocation for the bonds described
in section 4.g. of this notice; or similar
documentation or a combination thereof.
h. Compliance with Federal tax laws.
The Application must include a certification that the Applicant reasonably expects
that the proposed bonds will meet the applicable requirements of § 7871(f) and that
the Applicant has engaged bond counsel to
render an opinion to the effect that the proposed bonds will meet those requirements.

July 30, 2012

i. Dollar amount of allocation requested. The Application must specify
the dollar amount of the volume cap requested, not to exceed the amount of the
proposed bonds.
j. Demonstration of readiness to issue.
The Application must include a certification that the Applicant reasonably expects
to use the volume cap allocation by issuing
the proposed bonds prior to expiration of
the volume cap allocation described in section 4.g. of this notice. Based on its overall assessment of an Applicant’s readiness
to issue the proposed bonds, the IRS may
require the Applicant to provide additional
information or supporting documentation
to demonstrate the Applicant’s readiness to
issue such bonds, and the Application will
be treated as incomplete until the IRS receives the additional information or documentation.
k. Certain forfeitures. In determining
an Applicant’s readiness to issue the proposed bonds under section 3.j. of this notice, the IRS will not take into account or
otherwise consider any prior forfeitures or
expirations of volume cap that occurred
with respect to the original allocations of
volume cap received for Tribal Economic
Development Bonds under the 2009 First
Allocation or the 2010 Second Allocation.
In determining such readiness to issue the
proposed bonds, however, the IRS may
consider any forfeitures or expirations of
volume cap previously received under this
notice. The Application must identify any
allocation of volume cap (not including
any allocations received in the 2009 First
Allocation or the 2010 Second Allocation)
previously received by the Applicant under this notice that was forfeited or expired
and provide an explanation of the reasons
for such forfeiture.
l. Multiple projects. Subject to other
limitations and requirements described
herein, an Applicant may submit a single
Application for volume cap that covers
multiple projects, provided that such Application includes sufficient information to
satisfy the requirements of this notice for
each project independently of any other
project covered by the Application (for
example, for each project covered by the
Application, the Application must include
a plan of financing, a description of the
project including costs and location, and a
description of the status of approvals for
that project). Alternatively, an Applicant

July 30, 2012

may submit separate Applications for separate projects.
m. Joint projects. An Applicant may
submit an Application for an allocation of
volume cap to finance its share of a joint
project all of which will be owned by Indian tribal governments or which will, in
part, be owned by an entity that is not an
Indian tribal government, provided that the
joint project will be located entirely on one
or more of the reservations of any of the
Indian tribal governments receiving an allocation with respect to such project. For
this purpose, the type of joint ownership of
facilities to be financed with Tribal Economic Development Bonds include only
those recognized under the private activity bond restrictions on tax-exempt bonds
under § 141.
n. Perjury statement. The Application must include the following declaration signed and dated by an authorized official of the Applicant: “I hereby certify
that I am an authorized officer or official
of the Applicant, that I am duly authorized to execute legal documents on behalf
of the Applicant in connection with incurring debt, and that I am duly authorized
to execute legal documents on behalf of
the Applicant in making this Application.
Under penalties of perjury, I declare that
(i) I have knowledge of the relevant facts
and circumstances relating to this Application and the project(s), (ii) I have examined
this Application and the supporting documents, and (iii) to the best of my knowledge and belief, all of the facts contained
in this Application and the supporting documents are true, correct and complete.”
If the Applicant subsequently submits any
additional information or supporting documents with respect to the Application, such
additional information or supporting documents must be accompanied by a declaration, signed and dated by an authorized official of the Applicant, in a form substantially identical to the declaration submitted
with the Application pursuant to the preceding sentence.
SECTION 4. GENERAL
ALLOCATION PROCESS
a. Priority of Allocations. Except as
otherwise provided in this section 4, for
Applications filed with the IRS that meet
the requirements in this notice, the IRS
will allocate an amount of available vol-

104

ume cap equal to the amount requested
in the Application on a first-come, firstserved basis by order of submission date
(as defined in section 4.b. of this notice).
b. Submission date and incomplete
Applications. Each Application will be
treated as submitted on the day (submission date) the Application, and any
additional information and supporting
documents requested by the IRS, are received by the IRS and such Application,
additional information, and supporting
documents satisfy all of the applicable requirements of this notice, including being
submitted as described in section 3 of this
notice. The IRS may request additional
information to support any of the requirements of this notice, including additional
information and certifications to demonstrate that the proposed project will qualify
for Tribal Economic Development Bond
financing under § 7871(f) and to demonstrate the Applicant’s readiness to issue
the proposed bonds. The Application will
not satisfy the requirements of this notice
until the IRS receives such information.
c. Limit on allocation to any one Indian tribal government. No Indian tribal
government will receive an allocation of
volume cap that would cause the aggregate amount of volume cap allocated to
that Indian tribal government pursuant to
this notice (not including any allocations
received in the 2009 First Allocation or the
2010 Second Allocation or amounts forfeited under section 4.g. or 4.i. of this notice) to exceed the Published Volume Cap
Limit (as defined in the next sentence) in
effect for the period that includes the submission date. The Published Volume Cap
Limit for any period is the greater of: (1)
20% of the amount of available volume
cap as of the first day of such period (determined by the IRS based on available information, including allocation data and reports of bonds issued); or (2) $100 million. The Published Volume Cap Limit
for the initial period beginning on the date
of this notice is $360,569,329 (20% of
$1,802,846,643). The IRS plans to publish
updated Published Volume Cap Limits on
the IRS website at http://www.irs.gov/taxexemptbond/index.html or at such other location as the IRS may provide future public notice. Beginning no later than October 1, 2012, the IRS will publish these updates for successive two-month periods on
or about the first business day of each pe-

2012–31 I.R.B.

riod. For purposes of this limitation, an Indian tribal government includes the Indian
tribal government, together with any political subdivisions of the Indian tribal government, and any entities controlled by the
Indian tribal government. An Application
that requests an allocation of volume cap in
an amount that would cause the Published
Volume Cap Limit in effect on the date of
submission to be exceeded will be treated
as incomplete until the day the Applicant
supplements the Application in a manner
that complies with the requirements of the
notice and does not cause such limit to be
exceeded.
d. Available volume cap limitation. The
IRS will not make an allocation that would
cause the total amount of volume cap allocated (not including forfeited allocations)
to exceed the $2 billion statutory limit for
Tribal Economic Development Bonds. In
general, if the total amount of volume cap
requested in an Application meeting the
requirements of this notice exceeds the
amount of available volume cap on the
submission date (determined by the IRS
based on available information, including
allocation data and reports of bonds issued), then the Applicant will have the opportunity to receive a portion of the available volume cap. Further, if two or more
Applications meeting the requirements of
this notice are filed on the same submission date and the amount of available volume cap on that date is less than the total amount of requested volume cap under those Applications, then each Applicant will be given the opportunity to receive a portion of the available volume cap
in proportion to their requested amount of
volume cap. In any circumstance in which
available volume cap is in an amount less
than the amount requested, the IRS will notify the Applicant and the Applicant will
be provided 30 days to notify the IRS (at
the address specified in section 3.d. of this
notice) of its decision to accept the allocation in the lesser amount or to delay the
allocation for up to 180 days from the submission date to determine if future forfeitures of volume cap may allow the Applicant to receive the full amount requested.

If the Applicant decides to delay receiving
its allocation, it will also notify the IRS
of whether it will accept a lesser allocation if forfeitures of volume cap during the
delay period are insufficient to allow the
Applicant to receive the full amount requested. If the Applicant does not notify
the IRS of its decision within 30 days of
such IRS’ notice to the Applicant, the Application will be treated as withdrawn. In
any circumstance in which an allocation of
volume cap may be in an amount less than
the amount requested, the IRS may require
the Applicant to supplement the Application to demonstrate that the requirements
of this notice are satisfied if based on an
Application for the reduced allocation.
e. Section 17 corporations, subdivisions of Indian tribal governments, and
pool bond issuers.
(1) For purposes of issuing proposed
Tribal Economic Development Bonds, an
Applicant that receives an allocation may
assign the allocation to an Indian tribal
corporation organized under section 17 of
the Indian Reorganization Act of 1934,
25 U.S.C. section 477 (2012) (a Section
17 Corporation),1 or to a subdivision of the
Indian tribal government that satisfies the
requirements of § 7871(d) to be treated as
a political subdivision of a State, provided
the assignment and use of the allocation
conforms in all respects (other than with
respect to the issuer of the bonds) to the
Application of the assigning Applicant.
(2) An Applicant that receives an allocation may assign the allocation to a pool
bond issuer to issue the proposed bonds
provided that the proceeds of the proposed
bonds are then loaned to the Applicant and
provided that the pool bond issuer is itself an Indian tribal government, a subdivision of an Indian tribal government that
satisfies the requirements of § 7871(d) for
treatment as a political subdivision of a
State, or a Section 17 Corporation. Pooled
Tribal Economic Development Bonds will
be subject to the provisions of § 149(f).
(3) Any bonds issued by a subdivision
of an Indian tribal government, a Section
17 Corporation, or a pool bond issuer will
be treated for purposes of a volume cap

allocation as if they were bonds issued by
Applicant. Allocations will not be made to
a pool bond issuer.
(4) The allocation limit of section 4.c.
of this notice for any one Indian tribal government applies to the Applicant without
regard to how the proposed bonds are issued (i.e., whether the issuer is a subdivision of an Indian tribal government, a Section 17 Corporation, or a pool bond issuer).
f. Confirmation of allocation. The IRS
will send the Applicant that receives a volume cap allocation a letter confirming the
allocation (allocation letter).
g. Expiration of allocation. Applicants
have 180 days from the date of the allocation letter to issue the proposed bonds. To
the extent that the proposed bonds are not
issued within 180 days of the date of the
allocation letter, the portion of such allocation for which bonds have not been issued will be treated as forfeited and will
be available for reallocation.
h. Extensions and new Applications.
The IRS does not expect to grant extensions to the expiration date of the volume
cap allocation as set forth in section 4.g.
of this notice. An Indian tribal government that is unable to issue the proposed
bonds within the 180-day period from the
date of the allocation letter may reapply for
an allocation. The new Application must
comply with this notice, including by providing the information described in section
3.k. of this notice, and will be subject to
the submission provisions of section 4.b.
and the applicable limits set forth in section 4 of this notice.
i. Voluntary forfeiture. If an Applicant
determines that it does not intend to use
an allocation of volume cap to issue the
proposed bonds (including circumstances
in which the Applicant determines to finance the project with financing other than
the proposed bonds), the Applicant should
notify the IRS in writing at the address set
forth in section 3.d. of this notice of its intention to forfeit the allocation. The notice
will permit the IRS to treat the allocation
as forfeited as of the date the IRS receives
the notification, and the forfeited amount
will be available to reallocate.

1 Federally-chartered corporations organized and controlled by Indian tribal governments under section 17 of the Indian Reorganization Act of 1934 are eligible Indian tribal governmental
issuers of tax-exempt bonds under § 7871 and eligible governmental users of proceeds of tax-exempt bonds for purposes of the private business restrictions on governmental bonds under
§ 141. See Treas. Reg. § 1.301.7701–1(a)(3) (Section 17 Corporations are integral parts of Indian tribal governments and are not recognized as separate entities apart from the Indian tribal
governments for Federal tax purposes); Rev. Rul. 94–16, 1994–1 C.B. 19 (Section 17 Corporations are not separate taxable entities apart from the controlling Indian tribes and are not subject
to Federal income taxation).

2012–31 I.R.B.

105

July 30, 2012

SECTION 5. CONSENT TO
DISCLOSURE OF ALLOCATION
To provide the public with information
on how the volume cap has been allocated and to facilitate oversight of the
Tribal Economic Development Bond program, the IRS intends to publish certain
data regarding the results of the allocation process. The data will be most
useful to the public if it identifies the
specific allocations awarded. Pursuant to
§ 6103, consent is required for the IRS to
disclose identifying information with respect to Applicants awarded an allocation.
Therefore, the IRS seeks the consent of
Applicants to the disclosure by the IRS of
the name of the issuer, the type of project
to be financed by the Tribal Economic
Development Bonds, the reservation on
which the project is to be located, the
reasonably expected cost of the project,
and the amount of volume cap allocation
awarded to that Applicant. To provide
valid consent, the consent must be in the
form set forth in Appendix B. This consent
to disclosure of certain information about
allocations, however, is optional for Applicants. An Applicant is not required to
consent to disclosure to receive an allocation. The IRS will not publish identifying
information on Applications that are not
awarded an allocation of volume cap or
pending Applications but may publish an
aggregate amount of allocations for which
no consent was received.
SECTION 6. INSUBSTANTIAL
DEVIATIONS FROM
INFORMATION IN APPLICATION;
EFFECTS OF OTHER CHANGES
a. Insubstantial deviations. In general, an allocation of volume cap is valid
for purposes of § 7871(f)(1) if the proposed bonds are issued, and the proceeds
of such bonds are allocated to expenditures, in a manner that does not substantially deviate from the information submitted in the Application. For this purpose, whether a deviation from the information submitted in the Application constitutes an insubstantial deviation is determined based on all the facts and circumstances using criteria similar to those used
under § 5f.103–2(f)(2), as amended or supplemented from time to time, regarding insubstantial deviations in the information

July 30, 2012

required for public approval of tax-exempt
private activity bonds under § 147(f) of the
Code. No further approval is necessary
from, and requests for approvals should
not be submitted to, the IRS with respect
to such insubstantial deviations. Nevertheless, the Applicant must give the IRS
notice of the deviation. If the insubstantial deviation occurs before the submission
of the Notice of Issuance described in section 7.a. of this notice, the Notice of Issuance must include a description of the
insubstantial deviation. If the insubstantial deviation occurs after the submission
of the Notice of Issuance, the Applicant
must submit a supplement to the Notice of
Issuance which describes the insubstantial
deviation. The supplement should contain
a copy of the notice of Issuance as well as
the details of the deviation and should be
sent to the same address as the Notice of
Issuance.
b. Substantial deviations—In general.
(1) Other than as described in section
6.b.(2) below, an allocation of volume
cap under an Application is invalid for
purposes of § 7871(f) if there is a change
relating to the issuance of the proposed
bonds or the allocation of the proceeds
of such bonds to expenditures that substantially deviates from the information
submitted in the Application. In the event
of such a change prior to the issuance of
its proposed bonds, the Applicant may
notify the IRS that it does not intend to use
the original allocation of bond volume cap
as described in section 4.i. of this notice
and submit a new Application reflecting
the modified information. The new Application must comply with this notice,
including by providing the information
described in section 3.k. of this notice,
and will be subject to the submission provisions of section 4.b. and the applicable
allocation limits in section 4 of this notice.
(2) Certain post-issuance deviations. A
substantial deviation that occurs after the
proposed bonds are issued and prior to the
allocation of gross proceeds of such bonds
to expenditures under the general rule set
forth in § 1.148–6(d)(1)(iii) will not invalidate the allocation of volume cap under the
Application if the Applicant submits a supplement to the Notice of Issuance (as defined in section 7.a. of this notice) to the
IRS. The supplement must (1) be sent to
the address set forth in section 7.a. of this
notice, (2) describe the substantial devia-

106

tion between the information submitted in
the Application and the actual information
subsequent to the bond issuance, and (3)
include a certification that the Applicant
has received an opinion from bond counsel
to the effect that the change will not cause
the bonds to fail to meet all applicable requirements of § 7871(f) and the applicable requirements of §§ 103 and 141 and the
regulations under such sections.
SECTION 7. INFORMATION
REPORTING
a. Notice of issuance. Not later than 15
days after issuance of the proposed bonds,
the Applicant shall send to the IRS a notice
of issuance (Notice of Issuance) of such
bonds, which shall include the following
information: (1) the Applicant’s name and
taxpayer identification number; (2) the issue price of the bonds issued; (3) the issue
date of the bonds; and (4) a description of
the project financed with the bonds. If the
Applicant fails to respond within 15 days
to an IRS request for confirmation that
either the Notice of Issuance has been submitted or that the Applicant has voluntarily
forfeited the allocation, the IRS, in its discretion, may treat allocations as forfeited
and available for reallocation. The Applicant shall send the Notice of Issuance to
the IRS at the following address: Internal
Revenue Service, SE:T:GE:TEB:CPM,
Attention: Mark Helfer, 1122 Town &
Country Commons, St. Louis, MO 63017.
Further, in the case of the issuance of
any Tribal Economic Development Bonds
that involves an insubstantial deviation
under section 6.a. of this notice that
occurs before submission of the Notice
of Issuance, the Notice of Issuance shall
include a description of the insubstantial
deviation. For insubstantial deviations
that occur after submission of the Notice
of Issuance, see section 6.a. of this notice.
b.
Regular information reporting.
Subject to updated IRS information reporting forms or procedures, an issuer
of Tribal Economic Development Bonds
should complete Part II of Form 8038–G
by checking the box on Line 18 (Other),
writing “Tribal Economic Development
Bonds” in the space provided for the bond
description, and entering the issue price of
the Tribal Economic Development Bonds
in the Issue Price column. For purposes of
this notice, the term “issue” has the mean-

2012–31 I.R.B.

ing used for tax-exempt bond purposes in
§ 1.150–1(c).
SECTION 8. PAPERWORK
REDUCTION ACT
The information collection contained in
this notice has been approved by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction
Act (44 U.S.C. chapter 35) under control
number 1545–2233. Under the Paperwork
Reduction Act, an agency may not conduct
or sponsor and a person is not required to
respond to a collection of information unless it displays a valid OMB control number.
Sections 3 and 7 of this notice contain
the collections of information. That information is required in order to inform the

2012–31 I.R.B.

IRS of an Applicant’s desire to receive an
allocation of volume cap for Tribal Economic Development Bonds and to determine the amount of volume cap that may
be allocated to each Applicant. The collections of information are mandatory for any
Applicant that wishes to receive an allocation of volume cap for Tribal Economic
Development Bonds. The likely respondents will be eligible issuers of Tribal Economic Development Bonds.
We estimate the total number of respondents to be 143 and the total annual responses to be 143. We estimate it will take
7 hours to comply. Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in

107

the administration of any internal revenue
law. Generally, tax returns and return information are confidential, as required by
§ 6103.
SECTION 9. DRAFTING
INFORMATION
The principal authors of this notice are
Debbie Cho of the IRS Office of Tax Exempt Bonds and Timothy L. Jones of the
Office of Chief Counsel. However, other
personnel from the Treasury and the IRS
participated in its development. For further information regarding this notice, contact Timothy L. Jones at (202) 622–3701
(not a toll-free call). For further information about submitted applications, contact Mark Helfer at (636) 255–1201 (not a
toll-free call).

July 30, 2012

APPENDIX A
APPLICATION FOR ALLOCATION OF
TRIBAL ECONOMIC DEVELOPMENT BOND VOLUME CAP
Internal Revenue Service
SE:T:GE:TEB:CPM
Attention: Mark Helfer
1122 Town & Country Commons
St. Louis, MO 63017
Dear Sir or Madam:
The following constitutes the application (Application) of (Name) (Applicant) for allocation of tribal economic development
bond (Tribal Economic Development Bond) volume cap under § 7871(f) of the Internal Revenue Code (Code) (unless otherwise
noted, section references herein are to the Code).
1. Name of Applicant/issuer.
Street Address
City

State

Zip

Telephone Number

Fax Number

EIN
2. Status of issuer. (Select as appropriate)
The Applicant/issuer is a “qualified issuer” under § 7871(f) because it is —
(i) an Indian tribal entity that appears on the most recent list published by the Department of the Interior in the Federal
Register pursuant to the Federally Recognized Indian Tribe List Act of 1994, Pub. L. 103–454, 108 Stat. 4791 (List), as
demonstrated by the attached documents included as Exhibit A.
(ii) an Indian tribal government that is acknowledged as a Federally recognized Indian tribe, as stated in a letter from the
Department of the Interior, as demonstrated by the attached documents included as Exhibit A.
3. Description of the project. A description of the project to be financed (Project), including information regarding the type
and use of the Project and a certification that the Project will qualify for Tribal Economic Development Bond financing
under § 7871(f), is set forth below or in attached Exhibit B.

If the Project is a jointly owned Project, please describe the other owners of the Project and the Applicant’s ownership
interest in the Project.
If the Application relates to multiple Projects, the Applicant must include separate project-specific information in all
relevant portions of the Application for each separate project (for example, for each separate project, the Application must
separately include a plan of financing, describe the project including costs and location, and describe the status of the
project’s approval).
4. Pool issuances. Does the Applicant expect to have the Tribal Economic Development Bonds issued by a pool issuer or an
“on behalf of issuer”?
If the answer above is yes, please describe the pool issuer or “on behalf of issuer” and provide a statement that the
pool issuer is an Indian tribal government or that the “on behalf of issuer” meets the requirements to be such an issuer
under the rules applicable to bonds issued under § 103.
Location of the Project.
Reservation where the Project will be located:
Include in the attached Exhibit C, a certification that the Project will be located entirely on the Applicant’s reservation.
If the Tribal Economic Development Bonds will be issued for a joint project please include in the attached Exhibit C a
certification that the Project will be located entirely within one or more of the reservations of at least one of the Indian tribal
governments receiving an allocation with respect to such Project.

July 30, 2012

108

2012–31 I.R.B.

5. Not used for gaming purposes.
Include in the attached Exhibit D a certification that no portion of the proceeds of any bonds issued pursuant to the requested
allocation will be used to finance any portion of a building in which class II or class III gaming (as defined in section 4 of the
Indian Gaming Regulatory Act) is conducted or housed, or any other property actually used in the conduct of such gaming.
6. Individual to contact for more information about the Project.
Individual Name and Title
Company Name
Street Address
City

State

Zip

Telephone Number
Fax Number
Email Address
(Include as appropriate) The contact person is not an authorized official or officer of the Applicant and a properly executed
Form 8821 (or Form 2848) is included with this Application that authorizes the disclosure by the IRS of information that
relates to this Application and the Project(s) described above to the contact person.
7. Approvals. Include in the attached Exhibit E a certification that all required Federal, State, local, and tribal approvals
(regulatory and otherwise) for the Project, the proposed Tribal Economic Development Bonds, and any other required
financing for the Project have been obtained or, if any approvals have not yet been obtained, a certification that the
Applicant reasonably expects to receive all required approvals in a timely manner sufficient to permit issuance of
the proposed Tribal Economic Development Bonds within the 180-day period allowed for issuance of bonds under an
allocation. In addition, include in the attached Exhibit E which required approvals have not been obtained and describe the
Applicant’s plan and expected time frame for obtaining such approvals.
8. Plan of financing. Include in the attached Exhibit F a plan of financing for the Project which includes: a reasonably
detailed plan of financing which includes (1) the amount of Tribal Economic Bonds expected to be issued and the amount
of proceeds of such bonds to be allocated to the project, (2) any reasonably expected other sources of financing for the
project together with a description of how such financing will be allocated to the project, and (3) documentation from an
independent third party who is knowledgeable about the marketability of tax-exempt bonds evidencing that the proposed
bonds are reasonably expected to be marketable prior to expiration of the volume cap allocation set forth in section 4.g. of
the notice. Documentation that may be used to meet this requirement for the proposed bonds includes, among others, the
following: a bond purchase commitment letter from an investor; a credit quality assessment evidencing the investment
grade credit quality of the proposed Tribal Economic Development Bonds from an independent organization that is in the
business of assessing credit quality; a credit enhancement commitment letter from a financial institution that will enable the
Tribal Economic Development Bonds to be investment grade credit quality; or a letter from an underwriter or financial
advisor to the effect that the sale of the proposed bonds is likely to be successful in a timely manner before expiration of the
volume cap for the allocation; or similar documentation or a combination thereof.
9. Compliance with federal tax laws. Include in the attached Exhibit G a certification that the Applicant reasonably expects
that the proposed bonds will meet all applicable requirements of § 7871(f) and that the Applicant has engaged bond counsel
to render an opinion to the effect that the proposed bonds will meet those requirements.
10. Certification of readiness to issue. Include in the attached Exhibit H a certification that the Applicant reasonably expects
to use the volume cap allocation by issuing Tribal Economic Development Bonds prior to the expiration of the volume
cap allocation.
11. Certain forfeitures. If the Applicant previously received an allocation of Tribal Economic Development Bond volume
cap (not including any allocations received in allocations announced by the IRS on September 15, 2009 and February 9,
2010) that was forfeited, then the Applicant must identify any such forfeited allocation and include an explanation of the
reasons for such prior forfeiture.
12. Reimbursements. (For reimbursements, include the following statement.) The Applicant intends to use the proceeds of
Tribal Economic Development Bonds to reimburse costs of the Project in accordance with § 1.150–2. (In addition, the
Applicant must demonstrate that the requirements of § 1.150–2 will be met.)

2012–31 I.R.B.

109

July 30, 2012

13. Refundings. (For refundings or refinancings, include the following statement.) The Applicant intends to use the proceeds
of Tribal Economic Development Bonds to refund or refinance prior debt in circumstances that would qualify for a
refunding or refinancing with tax-exempt bonds by a State or local government under § 103. In addition, the Applicant
must demonstrate that applicable requirements for such a refunding or refinancing issue will be met.
14. Dollar amount of allocation requested for the Project. The Applicant hereby requests a Tribal Economic Development
Bond allocation in the amount of $
15. Assignment of allocations to another issuer. (If the Applicant expects to assign its allocation to another qualified issuer
of Tribal Economic Development Bonds as authority for the Tribal Economic Development Bond issuer to issue bonds for
the project on behalf of the Applicant, the Applicant should provide the following statement.)
The Applicant expects to assign the requested allocation for Tribal Economic Development Bonds volume cap to a
qualified issuer of Tribal Economic Development Bonds as authority for the Tribal Economic Development Bond issuer to
issue bonds for the project on behalf of the Applicant. Applicant agrees to obtain a written commitment from the assignee
Tribal Economic Development Bond issuer that it is a qualified issuer of Tribal Economic Development Bonds and that
it will issue Tribal Economic Development Bonds for the project within the time frame specified in the Application
for the Applicant’s bonds.
16. Penalty of perjury statement and signatures.
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to execute legal
documents on behalf of the Applicant in connection with incurring debt, and that I am duly authorized to execute legal
documents on behalf of the Applicant in making this Application. Under penalties of perjury, I declare that (i) I have
knowledge of the relevant facts and circumstances relating to this Application and the Project(s), (ii) I have examined this
Application and the supporting documents, and (iii) to the best of my knowledge and belief, all of the facts contained in
this Application and the supporting documents are true, correct and complete.

By:
Name:
Title:
Date:

July 30, 2012

110

2012–31 I.R.B.

Exhibit A
DOCUMENTS REGARDING ISSUER STATUS AS AN INDIAN TRIBAL GOVERNMENT
(RESPONSE TO QUESTION 2 OF THE APPLICATION)
(Attached hereto)

2012–31 I.R.B.

111

July 30, 2012

Exhibit B
DESCRIPTION OF THE PROJECT
(RESPONSE TO QUESTION 3 OF THE APPLICATION)
(Attached hereto)

July 30, 2012

112

2012–31 I.R.B.

Exhibit C
PROJECT LOCATION ON INDIAN TRIBAL GOVERNMENT RESERVATION
(RESPONSE TO QUESTION 5 OF THE APPLICATION)

2012–31 I.R.B.

113

July 30, 2012

EXHIBIT D
STATEMENT WITH RESPECT TO GAMING
(RESPONSE TO QUESTION 6 OF THE APPLICATION)

July 30, 2012

114

2012–31 I.R.B.

Exhibit E
APPROVALS
(RESPONSE TO QUESTION 8 OF THE APPLICATION)
(Attached hereto)

2012–31 I.R.B.

115

July 30, 2012

Exhibit F
PLAN OF FINANCING
(RESPONSE TO QUESTION 9 OF THE APPLICATION)
(Attached hereto)

July 30, 2012

116

2012–31 I.R.B.

EXHIBIT G
COMPLIANCE WITH FEDERAL TAX LAWS
(RESPONSE TO QUESTION 10 OF THE APPLICATION)
(Attached hereto)

2012–31 I.R.B.

117

July 30, 2012

EXHIBIT H
STATEMENT OF READINESS TO ISSUE
(RESPONSE TO QUESTION 11 OF THE APPLICATION)
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to execute legal documents
on behalf of the Applicant in connection with incurring debt, and that I am duly authorized to execute legal documents on behalf
of the Applicant in making this Application. I certify that the Applicant reasonably expects to issue the Tribal Economic
Development Bonds pursuant to the allocation of volume cap for those bonds to be received pursuant to the Application prior to
the expiration date of the volume cap allocation.

By:
Name:
Title:
Date:

July 30, 2012

118

2012–31 I.R.B.

APPENDIX B
CONSENT TO PUBLIC DISCLOSURE
OF CERTAIN TRIBAL ECONOMIC DEVELOPMENT BOND
APPLICATION INFORMATION
] (Applicant) for an allocation of
In the event that the Application of [(Insert name of Applicant here):
authority to issue tribal economic development bonds (Tribal Economic Development Bonds) under § 7871(f) of the Internal
Revenue Code is approved, the undersigned authorized representative of the Applicant hereby consents to the disclosure by the
Internal Revenue Service through publication of a Notice in the Internal Revenue Bulletin or other public release of the name of
Applicant (issuer), the type of project to be financed by the Tribal Economic Development Bonds, the reservation on which
the project is to be located, the reasonably expected cost of the project, and the amount of the allocation, if any, of volume cap
authority to issue Tribal Economic Development Bonds awarded to the Applicant. The undersigned understands that this
information might be published, broadcast, discussed or otherwise disseminated in the public record.
This authorization shall become effective upon the execution hereof. Except to the extent disclosure is authorized herein,
the returns and return information of the undersigned taxpayer are confidential and are protected by law under the Internal
Revenue Code.
I certify that I have the authority to execute this consent to disclose on behalf of the taxpayer named below.
Date:

Signature:
Print name:
Title:

Name of Applicant-Taxpayer:
Taxpayer Identification Number:
Taxpayer’s Address:

Note: Treasury Regulations require that the Internal Revenue Service must receive this consent within 60 days after it is signed
and dated.

2012 Section 43 Inflation
Adjustment
Notice 2012–49
Section 43(b)(3)(B) of the Internal
Revenue Code requires the Secretary to
publish an inflation adjustment factor.
The enhanced oil recovery credit under
§ 43 for any taxable year is reduced if
the “reference price,” determined under
§ 45K(d)(2)(C), for the calendar year

2012–31 I.R.B.

preceding the calendar year in which the
taxable year begins is greater than $28
multiplied by the inflation adjustment factor for that year. The credit is phased out
in any taxable year in which the reference
price for the preceding calendar year exceeds $28 (as adjusted) by at least $6.
The term “inflation adjustment factor”
means, with respect to any calendar year,
a fraction the numerator of which is the
GNP implicit price deflator for the preceding calendar year and the denominator of
which is the GNP implicit price deflator
for 1990.

119

Because the reference price for the 2011
calendar year ($95.73) exceeds $28 multiplied by the inflation adjustment factor
for the 2011 calendar year ($43.92) by
$51.81, the enhanced oil recovery credit
for qualified costs paid or incurred in 2012
is phased out completely.
Table 1 contains the GNP implicit price
deflator used for the 2012 calendar year,
as well as the previously published GNP
implicit price deflators used for the 1991
through 2011 calendar years.

July 30, 2012