NRS231A.300. Decertification of qualified equity investment: Circumstances; limitations on distribution and payment on securities by qualified community development entity; notice requirements.

      1.  Once certified under subsection 3 of NRS 231A.230, a qualified equity investment may not be decertified unless all the requirements of subsection 2 have been met. Until all qualified equity investments issued by a qualified community development entity are decertified under this section, the qualified community development entity is not entitled to distribute to its equity holders or make cash payments on long-term debt securities that have been designated as qualified equity investments in an amount that exceeds the sum of:

      (a) The cumulative operating income, as defined by regulations adopted under section 45D of the Internal Revenue Code of 1986, 26 U.S.C. § 45D, earned by the qualified community development entity since issuance of the qualified equity investment, before giving effect to any interest expense from the long-term debt securities designated as qualified equity investments; and

      (b) Fifty percent of the purchase price of the qualified equity investments issued by the qualified community development entity.

      2.  To be decertified, a qualified equity investment must:

      (a) Be beyond its seventh credit allowance date;

      (b) Have been in compliance with NRS 231A.250 through its seventh credit allowance date, including coming into compliance during any cure period allowed pursuant to NRS 231A.260; and

      (c) Have had its proceeds invested in qualified active low-income community investments such that the total qualified active low-income community investments made, cumulatively including reinvestments, exceeds 150 percent of its qualified equity investment.

      3.  A qualified community development entity that seeks to have a qualified equity investment decertified pursuant to this section must send notice to the Department of its request for decertification together with evidence supporting the request. The provisions of paragraph (b) of subsection 2 shall be deemed to be met if no recapture action has been commenced by the Department as of the seventh credit allowance date. The Department shall respond to such a request within 30 days after receiving the request. Such a request must not be unreasonably denied. If the request is denied for any reason, the burden of proof is on the Department in any subsequent administrative or legal proceeding.

      (Added to NRS by 2013, 3453)