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HEALTH LAW SYMPOSIUM

HEALTH LAW SYMPOSIUM. New and Expanded Existing Forms of Financing for Health Care Projects. By: John R. Kirkwood, Bond Attorney Krieg DeVault LLP 12800 N. Meridian Street, Suite 300 Carmel, IN 46032 Phone: 317-238-6238 Fax: 317-636-1507 Email: jkirkwood@kdlegal.com.

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HEALTH LAW SYMPOSIUM

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  1. HEALTH LAW SYMPOSIUM New and Expanded Existing Forms of Financing for Health Care Projects By: John R. Kirkwood, Bond Attorney Krieg DeVault LLP 12800 N. Meridian Street, Suite 300 Carmel, IN 46032 Phone: 317-238-6238 Fax: 317-636-1507 Email: jkirkwood@kdlegal.com By: Frank A. Hoffman, NMTC Attorney Krieg DeVault LLP 12800 N. Meridian Street, Suite 300 Carmel, IN 46032 Phone: 317-238-6240 Fax: 317-636-1507 Email: fhoffman@kdlegal.com February 25, 2010

  2. Build America Bonds andRecovery Zone Bonds Prepared by: John R. Kirkwood, Bond Attorney

  3. Overview • General Rules • Build America Bonds • Recovery Zone Economic Development Bonds • Recover Zone Facility Bonds • Recovery Zone Designations • Allocation in Indiana for Recovery Zone Bonds • Initial Allocation • Waiver and Deemed Waiver • Process for issuing Build America Bonds and Recovery Zone Bonds • Build America Bonds • Recovery Zone Economic Development Bonds • Recover Zone Facility Bonds

  4. Build America Bonds • Two Types: • Build America Bonds – Tax Credit (Internal Revenue Code § 54AA(a)) • Taxable Bond • Tax Credit equal to 35% of the total coupon interest payable on one or more interest payment dates during any taxable year • Finances governmental purposes (e.g., capital expenditures and working capital), and may involve new money financings, current refunding and one advance refunding • Must be issued before January 1, 2011 • Build America Bonds – Direct Payment (Internal Revenue Code § 54AA(g)) • Taxable Bond • Federal subsidiary through a refundable Tax Credit in an amount equal to 35% of the total interest coupon • Internal Revenue Code § 6431 allows for direct payment (of refundable Tax Credit) by the Department of Treasury to the issuer or a bond trustee • 100% of the proceeds in excess of (i) 2% or cost of issuance and (ii) amounts in a reasonably required reserve fund must be used for capital expenditures for governmental purposes • No working capital financings, current refundings or advance refundings permitted • Must be issued before January 1, 2011

  5. Recovery Zone Bonds • Two Types: • Recovery Zone Economic Development Bond (“RZEDBs”) (Internal Revenue Code § 1400U-2) • Finances governmental purposes in a recovery zone • Form of Build America Bond (“BABs”) – 45% credit to issuer • Recovery Zone Facility Bonds (“RZFBs”) (Internal Revenue Code § 1400 U-3) • Private activity bond – a kind of exempt facility bond • Finances a private use in a recovery zone • Allows private sector to borrow at tax-exempt rate • Typically a local economic development commission (I.C. 36-7-11.9 and 12) is the issuer • For multi-jurisdictional projects, the Indiana Finance Authority may also be the issuer • Can be used for governmental projects that have too much private use

  6. Recovery Zone Bonds (cont’d) • Designation of Recovery Zone: • A recovery zone is any area designated by the issuer as having “significant poverty, unemployment, rate of home foreclosures or general distress” • Issuer has broad discretion to designate a zone “in any reasonable manner as it shall determine in good faith in its discretion” (IRS Notice 2009-50) • Designation of entire county is permitted • Issuer should adopt a resolution designating recovery zone; resolution should recite factors that support the designation

  7. Recovery Zone Economic Development Bonds • Recovery Zone Economic Development Bonds • RZEDBs are a subset of Build America Bonds • The amount of the refundable credit is 45% of the amount of interest payable on the interest payment date • The issuer must irrevocably elect for the obligation to be a recovery zone bond • Very specific reporting requirements for the 8038G • Construction found in IRS Notice 2009-26 (found at www.irs.gov) • Line 18 must read “Recovery Zone Economic Development Bond (Payment Option) • Additional information must be attached • Form 8038CP must be filed 45-90 days before each fixed rate interest payment date to receive credit on the related interest payment date

  8. Recovery Zone Economic Development Bonds (cont’d) • Qualifications for RZEDBs • 100% of available project proceeds or APP (i.e. sales proceeds less an amount not to exceed 2% costs of issuance), net of any amounts placed in a reasonably required reserve fund, must be used for qualified economic development purposes • “Qualified economic development purposes” are described as “expenditures for purposes of promoting development or other economic activity inarecoveryzone” and include • Capital expenditures paid or incurred with respect to property in the zone, and • Expenditures for public infrastructure and construction of public facilities

  9. Recovery Zone Economic Development Bonds (cont’d) • Thus, RZEDBs can be used to finance nearly any capital expenditures that promote economic development or economic activity in the recovery zone • Infrastructure (roads, water and sewer, electric transmission) • Schools • Public buildings • Industrial parks

  10. Recovery Zone Economic Development Bonds (cont’d) • Other Characteristics and requirements of RZEDBs: • Interest is taxable to the holder • Bond obligation must be issued by December 31, 2010 • General Tax Exempt bond rules (including arbitrage and rebate) under Section 103 of IRS Code apply • Issuer must have a reasonable expectation that it will spend Available Project Proceeds within three years • Yield for arbitrage purposes is reduced by the credit • No refundings allowed; can reimburse for expenditures paid after the effective date of ARRA (2/17/09) and originally financed with short-term temporary financing • Davis-Bacon DOES apply

  11. Recovery Zone Facility Bonds • RZFBs are a new category of “exempt facility bonds” under IRC § 142 • 95% or more of the net proceeds must be used for “recovery zone property” • “Recovery Zone Property” is depreciable property that is located and first used in the active conduct of a “qualified business” in a “recovery zone” • Property must be constructed, reconstructed, renovated or acquired by the borrower after the date the recovery zone was designated • Important: A used building can only be acquired with RZFB proceeds if the borrower spends money on renovation, rehabilitation, improvement and expansion that doubles the basis of the building with 24 months after the zone is designated • “Recovery Zone” for RZFBs is the same as the recovery zone for RZEDBs

  12. Recovery Zone Facility Bonds (cont’d) • “Qualified Business” means any trade or business other than: • Residential rental property, or • Facilities described in IRC § 144(c)(6)(b) (i.e., commercial golf course, country club, massage parlor, hot tub, suntan, racetrack, gambling facility, or business that sells alcoholic beverages for off-premises consumption) • Example: • Shopping centers or other retail • Manufacturing • Distribution or warehouse facilities • Hotels • Restaurants • Office buildings

  13. Allocation in Indiana for Recovery Zone Bonds • ARRA established a limited allocation for Recovery Zone Bonds across the country ($10 billion for RZEDBs, $15 billion for RZFBs), to be allocated to the states, and then to large cities and counties within the states based on loss of employment between December 2007 and December 2008 • Initial Allocation by the U.S. Department of Treasury to states/large municipalities/counties found in IRS Notice 2009-50 • Found at www.irs.gov • Click on “Tax Exempt Bond Community” tab • Click on “IRS Releases Guidance on ARRA Bond Provisions” • Click on “Notice 2009-50 (Recovery Zone Bond Volume Cap Allocations)” and on the words within that paragraph that say “Click here to access these suballocations”—that will lead to the state by state list of city and county allocations

  14. Initial Allocation in Indiana • RZEDs Allocation • Total allocation: Indiana received $313,081,000 • RZFBs Allocation • Total allocation: Indiana received $469,621,000 • RZED’s and RZFB’s Reallocation • State of Indiana reallocated its allocation among counties and large municipalities in the proportion to each such county’s or municipality’s 2008 employment decline bears to the aggregate of the 2008 employment declines for all counties and municipalities in the State • U.S. Treasury then made suballocations of that amount to large municipalities (Evansville, Fort Wayne, Indianapolis and South Bend) and to counties based on the ratio of employment losses compared to the State’s losses, as described above

  15. Waiver and Deemed Waiver • RZEDs and RZFBs Allocation Waiver • Internal Revenue Code § 1400 U-1(a)(3) permits a county or municipality to waive any portion of the allocation made to it by the State of Indiana, including a “deemed” waiver of such volume cap, back to the State

  16. Process to Issue BABs and RZEDBs • Process to issue bonds – BABs and RZEDBs • Must be issued in the same form as any other governmental debt in Indiana • General obligation bond or • Revenue bond or • Lease rental bond

  17. Process to Issue Recovery Zone Facility Bonds • Bonds to finance private entities are issued by a county or large municipality through an economic development commission (I.C. 36-7-11.9 and 12), although multi-jurisdictional financings maybe issued through the Indiana Finance Authority • County/LargeMunicipality designates recovery zone and designates the Authority as the issuer of the bonds, except where recovery zone allocation has been reallocated to the State of Indiana, in which case the State of Indiana, through the Indiana Finance Authority, would likely make these designations • Authority adopts inducement or preliminary resolution • Issuer holds public hearing and adopts approval in principal resolution

  18. Process to Issue Recovery Zone Facility Bonds (cont’d) • Private company (with assistance from underwriter or placement agent) arranges for private placement or for letter of credit to support bonds • Company must be able to qualify for the loan • Application and bond documents submitted to Issuer • Issuer meets to give final approval to bond documents • Bonds are sold and funds spent on project • Form 8038 filed with IRS

  19. Indiana Recovery Zone Bond Allocation

  20. Indiana Recovery Zond Bond Allocation

  21. New Markets Tax Credit Financing Basics Prepared by: Frank A. Hoffman, NMTC Attorney

  22. What Is The New Market Tax Credit Program? A Federal Tax Incentive Program created to attract Capital Investment in “community-based” lenders and investors dedicated to making loans or capital investments in Businesses located in disadvantaged census tracts.

  23. Tax Credit Investor Tax Credit Partnership NMTC = Federal Tax Incentive Program $$$$ • Investor “buys” Federal Income Tax Credits for Cash • Low Income Housing Tax Credit Program • Historic TaxCredit Program Federal Income Tax Credits

  24. NMTC Program and Background • History of the Legislation • Dec 21, 2000 Congress enacts the NMTC as part of the Community Renewal Tax Relief Act of 2000. • Apr 20, 2001 CDFI Fund issued initial guidance on the NMTC.

  25. NMTC Program and Background • History of the Legislation • March 14, 2003 First NMTC Allocation of $2,491,000 announced • December 11, 2006 Congress passes the Tax Relief and Health Care Act which extends NMTC through 2008 with an additional $3.5 billion Allocation • July 30, 2008 Congress passes the Housing and Economic Recovery Act which extends NMTC through 2009 with an additional $3.5 billion Allocation • February 17, 2009 American Recovery & Reinvestment Act provides for an additional $1.5 billion NMTC Allocation increasing the 2009 Allocation to $5.0 billion

  26. New Markets Tax Credit Summary By Round (as of 2/1/10)

  27. National New Markets Tax Credit Sources

  28. Indiana New Markets Tax Credit Sources

  29. Bank Typical Scenario Conventional Loan Structure $5.0 Million Project and 7.0% Interest Rate Health Care Facility Developer Equity $2,000,000 $3,000,000 Conventional Loan Health Care Facility Developer’s $5.0 project At 7% interest; fixed rate; 20 year Amortization; 7 year Term Annual Debt Service $279,108 Year 7 Balance: $2,378,037

  30. New Markets Loan Financing New Markets Tax Credit Equity Computation 1Subject to change based on current market conditions.

  31. Bank Developer $2.0m Capital 100% Control & Ownership $2,750,000 Non-recourse Loan $192,500 7.0% Fixed Interest Only for 7 years Community Development Entity Partnership $3,750,000 QEI $192,500 Total Annual Interest Bank NMTC Investor @ 68.376% 14.01% After-Tax IRR QEI $3,750,000 Equity Investment QALICB $5.0 million Project $1,000,000 Equity Investment $3.0 million Loan Investment Fund Partnership $3,750,000 $192,500 per year At 6.4167% Fixed; Interest only for 7 years $1,462,500 39% NMTC Over 7 years (Federal) $1,462,500 NMTC Cash / Interest $192,500 $750,000 15% Expenses + 5% Reserve ($562,500) ($187,500) Expenses and Reserves Over 7 years $750,000 Worst Case New Markets Loan Financing - BasicFlow of Funds – $3 million Interest Only Loan at 6.4167% for 7 Years

  32. New Markets Loan FinancingSide-by-Side ComparisonConvention vs. NMTC

  33. Bank Developer $2,750,000 Loan Repayment 100% Control & Ownership Community Development Entity $250,000 Net Equity Residual + $187,500 Reserve QALICB $5.0 million Project $3.0 million Loan Repayment $100,000 Buy-Out Proceeds $2,850,000 Cash Distributed Bank NMTC Investor Investment Fund Partnership $2,850,000 Available to Split: $437,500 New Markets Loan Financing - Basic Flow of Funds – $3.0 million Interest Only Loan at The End of Seven (7) Years

  34. A Note $2,750,000 Community Development Entity $187,500 Reserves QALICB $5.0 Million Project B Note $250,000 Option to Purchase CDE QALICB Affiliate New Markets Loan FinancingThe End of Seven (7) YearsA & B Note Structure

  35. New Markets FinancingTypical Outcomes • Average Transaction: $10 million+ • NMTC Loan Amount: 20% more than Convention Loan Amount • Maximum Back End Equity Residual: 15% of NMTC Loan Amount • Example • Convention Loan Amount: $8,000,000 • NMTC Loan Amount: $9,600,000 • Back End Equity Residual: $1,440,000

  36. City Economic Development Commission City Economic Development Commission Redevelopment Commission TIF Allocation Fund Pledged to EDC Redevelopment Commission TIF Allocation Fund Pledged to EDC $17,500 per year Bank Fee $17,500 per year Bank Fee Net TIF Accumulation over first 8 years: $1,925,000 Net TIF Accumulation over first 8 years: $1,925,000 $1.75m TIF Bond Purchase Agreement $1.75m TIF Bond Purchase Agreement Bank Bank Real Property Taxes $270,000 per year Real Property Taxes $270,000 per year (3% rate; $9.00 million) (3% rate; $9.00 million) (D.P.V. - $257,500/yr; 7%; 10 years: $1,808,572) (D.P.V. - $257,500/yr; 7%; 10 years: $1,808,572) Developer Developer Bank Bank $1.75m Bond Draw Rights $1.75m Bond Draw Rights Assignment & Pledge First Position Assignment & Pledge First Position 100% Control & Ownership 100% Control & Ownership $2.0m Capital $2.0m Capital $2,750,000 Non-recourse Loan $2,750,000 Non-recourse Loan $192,500 7.0% Fixed Interest Only for 7 years $192,500 7.0% Fixed Interest Only for 7 years Bank NMTC Investor @ 68.376% 14.01% IRR QEI $3,750,000 Equity Investment QEI $3,750,000 Equity Investment Community Development Entity Partnership $3,750,000 QEI $192,500 Total Annual Interest Community Development Entity Partnership $3,750,000 QEI $192,500 Total Annual Interest Investment Fund Partnership $3,750,000 Investment Fund Partnership $3,750,000 QALICB $5.0 million Project QALICB $5.0 million Project $1,000,000 Equity Investment $1,000,000 Equity Investment $3.0 million Loan $3.0 million Loan $1,462,500 NMTC $1,462,500 NMTC $192,500 per year At 6.4167% Fixed; Interest only for 7 years $192,500 per year At 6.4167% Fixed; Interest only for 7 years $1,462,500 39% NMTC Over 7 years (Federal) $1,462,500 39% NMTC Over 7 years (Federal) Cash / Interest $192,500 Cash / Interest $192,500 Expenses + Reserves Expenses + Reserves $750,000 $750,000 Expenses and Reserves Over 7 years $750,000 Expenses and Reserves Over 7 years $750,000 New Markets Loan Financing Combined with TIFFlow of Funds – $3 million Interest Only Loan at 6.4167% for 7 Years TIF Bank NMTC Investor @ 68.376% 14.01% IRR

  37. TIF Allocation Fund $1,925,000 (Before Interest) Available to Split Wells Fargo Developer $2,750,000 Loan Repayment 100% Control & Ownership Community Development Entity $250,000 Net Equity Residual + $187,500 Reserve QALICB $5.0 million Project $3.0 million Loan Repayment $2,850,000 Cash Distribution $100,000 Buy-Out Proceeds Wells Fargo NMTC Investor Investment Fund Partnership $2,850,000 Available to Split: $437,501 New Markets Loan Financing Combined with TIFFlow of Funds – $3 million Interest Only Loan at The End of Seven (7) Years TIF

  38. Investment Fund Partnership $3,750,000 New Markets Loan Financing - BasicFlow of Funds – $3 million Interest Only - Tax ExemptARRA Recovery Zone Facility Bond @ 5.25% Bond Purchaser Underwriter Issuer Trustee Developer 100% Control & Ownership $2.0m Capital $2,750,000 Non-recourse Bond $144,375 5.25% Fixed Interest Only for 7 years Community Development Entity $3,750,000 QEI $144,375 Total Annual Interest Wells Fargo NMTC Investor @ 68.376% 14.01% IRR QEI $3,750,000 Equity Investment QALICB $5.0 million Project $1,000,000 Equity Investment $3.0 million Loan $144,375 per year At 4.8125% Fixed; Interest only for 7 years $1,462,500 39% NMTC Over 7 years (Federal) $1,462,500 NMTC Cash / Interest $144,375 $750,000 Expenses + Reserve Expenses and Reserves Over 7 years $750,000

  39. New Markets Loan FinancingSide-by-Side ComparisonConvention vs. NMTC vs. RZFB + NMTC

  40. New Markets Loan FinancingLow-Income Community – The Location Low-Income Communities are census tracts where2: • Poverty rate exceeds 20% or • Median Income is below 80% of the greater of: • Statewide median income; or • Metropolitan area median income.3 2IRC §45D(e)(1) 3See CBAI Preliminary Project form, page 8 for a list of all the Low-Income Community Census Tracts in Indiana; Appendix B.

  41. 1.Anderson–Madison County 2. Bloomington–Monroe County 3. Bluffton–Wells County 4. Boonville–Warrick County 5. Brown County 6. Clark County 7. Clarksville–Clark County 8. Clay County 9. Columbus–Bartholomew County 10. Connersville–Fayette County 11. Crawford County 12. Davies County 13. Dearborn County 14. East Chicago–Lake County 15. Elkhart–Elkhart County 16. Evansville–Vanderburgh County 17. Fort Wayne–Allen County 18. Frankfort-Clinton County 19. Gary-Lake County 20. Greene County 21. Greenfield-Hancock County 22. Hammond-Lake County 23. Hartford City-Blackford County 24. Huntington-Huntington County 25. Indianapolis-Marion County 26. Jackson County 27. Jay County 28. Johnson County 29. Kendallville-Noble County 30. Knox-Starke County 31. Knox County 32. Kokomo-Howard County 33. Lafayette/West Lafayette-Tippecanoe County 34. Lake County 35. LaPorte-LaPorte County 36. Lawrence-Marion County 37. Lawrence County 38. Logansport-Cass County 39. Madison County 40. Marion-Grant County 41. Martinsville-Morgan County 42. Michigan City-LaPorte County 43. Monon-White County 44. Muncie-Delaware County 45. New Albany-Floyd County 46. New Castle-Henry County 47. Noblesville-Hamilton County 48. Orange County New Markets Loan FinancingIndiana 72 Low Income Community Areas 49. Owen County 50. Parke County 51. Perry County 52. Peru-Miami County 53. Pike County 54. Plymouth-Marshall County 55. Princeton-Gibson County 56. Pulaski County 57. Putnam County 58. Randolph County 59. Rushville-Rush County 60. Salem-Washington County 61. Scott County 62. Shelbyville-Shelby County 63. South Bend-St. Joseph County 64. Speedway-Marion County 65. Sullivan County 66. Switzerland County 67. Terre Haute-Vigo County 68. Valparaiso-Porter County 69. Vermillion County 70. Versailles-Ripley County 71. Warsaw-Kosciusko County 72. Wayne County

  42. New Markets Loan Financing State of IndianaCounties with Qualified Low-Income Communities (shaded)

  43. New Markets Loan Financing Qualified Active Low-Income Community BusinessThe Borrower Any for-profit or not-for-profit corporation, partnership or proprietorship located in a Low-Income Community may be a Qualified Active Low-Income Community Business (“QALICB”).4 A unit of government may not be a QALICB. • To qualify the QALICB must meet the: 1. Gross Income Test; 2. Tangible Property Test; 3. Services Test; 4. Collectibles Test; 5. Financial Asset Test; 6. Activity Test; and 7. Employee Test 4IRC §45D and Treasury Regulations (“Treas. Reg.”) §1.45D-1.

  44. New Markets Loan Financing QALICB – The Borrower • Gross Income Test5 • Any entity (including nonprofit) if at least 50% of total gross income is derived from the active conduct of a qualified business within a low income community • 50% test is met if entity can meet Tangible Property or Services Test using 50% (discussed on next slide) • Also, may satisfy test based upon “facts and circumstances” 5Treas. Reg. §1.45D-1(d)(4)(i)A.

  45. New Markets Loan Financing QALICB – The Borrower • Tangible Property and Services Test • Tangible Property Test6 • At least 40% of the use of the tangible property (on a cost basis) of the business (whether owned or leased) is within any low income community. • Services Test7 • At least 40% of the services performed for the business by its employees is performed (based on payroll) in any low-income community. 6Treas Reg. §1.45D-1(d)(4)(i)(B)(1). 7Treas Reg. §1.45D-1(d)(4)(i)(C).

  46. New Markets Loan Financing QALICB – The Borrower • Collectibles and Financial Asset Test • Collectibles Test8 • Less than 5% of the average of the aggregate unadjusted bases of the property of the entity is attributable to collectibles (e.g. art, rugs, antique, metal, gems, wine, stamps, and coins) • Financial Asset Test9 • Less than 5% of the average adjusted bases of the property of the entity is attributable to certain nonqualified financial property (e.g. bonds (term in excess of 18 months), stock, options, future contracts warrants, and annuities) 8Treas Reg. §1.45D-1(d)(4)(i)(D). 9Treas Reg. §1.45D-1(d)(4)(i)(E).

  47. New Markets Loan FinancingQALICB – The Borrower • Activity and Employee Test • Activity Test – an active trade or business10 • Business will be considered an active business if the CDE reasonably expects the business to generate revenues within 3 years after investment or loan is made (good for real estate or start-ups). • Employee Test – performs services in the Low-Income Community11 • Business does not have to have employees if the Business meets the Tangible Property test at a minimum of 85% (good for special purpose real estate entities). 10Treas Reg. §1.45D-1(d)(4)(iv). 11Treas Reg. §1.45D-1(d)(4)(i)(C).

  48. New Markets Loan FinancingQALICB – The Borrower • The leasing of commercial (non-residential rental) real estate that has been “substantially improved” qualifies as a QALICB if the real estate is located in a Low Income Community and the lessee is not:12 • a golf course, • a country club, • a massage parlor, • a hot tub facility, • a suntan facility, • a racetrack, • a gambling facility, or • a liquor store • No Employees Required • No Other Test toMeet 12Treas Reg. §1.45D-1(d)(5)(ii).

  49. New Markets Loan Financing Types of Qualified Businesses - QALICBs Manufacturing Facilities. New or existing facility construction; expansion or improvements; equipment; and furniture and working capital. Distribution Facilities. New or existing construction, expansion or improvements; equipment; furniture; and working capital. Community Facilities. New or existing facilities (daycare, schools, training facilities, assisted living (pay per day/no leases), nursing homes, hospital, jails, sewer plants, water treatment, telephone, cable, electricity, internet, etc.) construction, expansion or improvements (including interior build-out); equipment; furniture; and working capital. Office. New or existing construction, expansion or improvements (including interior build-out), furniture; equipment; and working capital. Retail. New or existing construction, expansion or improvements (including interior build-out); fixtures; equipment; and working capital. Mixed-Use. (more than 20% of revenue attributable to retail and/or office; and less than 80% of revenue attributable to apartments for lease): new or existing construction, expansion or improvements (including interior build-out and appliances); furniture; equipment; and working capital. Other Industrial Facilities. New or existing facilities; construction, expansion or improvements (including build-out); equipment; furniture; and working capital. Real Estate Development. Industrial or commercial including land acquisition; infra-structure; and working capital.

  50. New Markets Loan FinancingTypes of Non Qualified Businesses • Any Business (for profit or not-for-profit) located in a qualified Low-Income Community except13: • farming (crops and live stock) • residential rental property (80.00% or more of gross receipts from dwelling unit rent). • golf course • country club • massage parlor • hot tub facility • suntan facility • gambling facility • liquor store • art collectors (or other types of collectibles) • bank or other businesses consisting predominantly of the development or holding of intangibles. 13Treas Reg. §1.45D-1(d)(5).

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