Part III. Administrative, Procedural, and Miscellaneous

2008 Calendar Year Resident Population Estimates

Notice 2008–22

This notice informs (1) state and local housing credit agencies that allocate low-income housing tax credits under § 42 of the Internal Revenue Code and (2) states and other issuers of tax-exempt private activity bonds under § 141, of the proper population figures to be used for calculating the 2008 calendar year population-based component of the state housing credit ceiling (Credit Ceiling) under § 42(h)(3)(C)(ii), the 2008 calendar year volume cap (Volume Cap) under § 146, and the 2008 volume limit (Volume Limit) under § 142(k)(5).

The population figures both for the population-based component of the Credit Ceiling and for the Volume Cap are determined by reference to § 146(j). That section provides generally that determina

tions of population for any calendar year are made on the basis of the most recent census estimate of the resident population of a state (or issuing authority) released by the U.S. Census Bureau before the beginning of such calendar year. Section 142(k)(5) provides that the Volume Limit is based on the State population.

The population-based component of the Credit Ceiling and the Volume Cap are adjusted for inflation pursuant to §§ 42(h)(3)(H) and 146(d)(2), respectively. The adjustments for the 2008 calendar year were published in Rev. Proc. 2007–66, 2007–45 I.R.B. 970. Section 3.08 of Rev. Proc. 2007–66 provides that, for calendar year 2008, the amounts used under § 42(h)(3)(C)(ii) to calculate the Credit Ceiling is the greater of $2.00 multiplied by the State population (see the resident population figures provided below) or $2,325,000. Further, section 3.16 of Rev. Proc. 2007–66 provides that the amounts used under § 146(d)(1)

Resident Population Figures

to calculate the Volume Cap for calendar year 2008 is the greater of $85 multiplied by the State population (see the resident population figures provided below) or $262,095,000.

The proper population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2008 calendar year are the estimates of the resident population of the 50 states, the District of Columbia, and Puerto Rico released by the U.S. Census Bureau on December 27, 2007, in Press Release CB07–184. The proper population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2008 calendar year for the insular areas (American Samoa, Guam, Northern Mariana Islands, and U.S. Virgin Islands) are the figures released electronically by the U.S. Census Bureau on July 17, 2003, and referenced in Census Bureau Tip Sheet TP03–16, dated August 8, 2003. For convenience, these estimates are reprinted below.

Alabama 4,627,851 Alaska 683,478 American Samoa 57,663 Arizona 6,338,755 Arkansas 2,834,797

California 36,553,215 Colorado 4,861,515 Connecticut 3,502,309

Delaware 864,764 D.C. 588,292

Florida 18,251,243

Georgia 9,544,750 Guam 173,456

Hawaii 1,283,388

Idaho 1,499,402 Illinois 12,852,548 Indiana 6,345,289 Iowa 2,988,046

Kansas 2,775,997 Kentucky 4,241,474

2008–8 I.R.B. 465 February 25, 2008

Louisiana 4,293,204

Maine 1,317,207 Maryland 5,618,344 Massachusetts 6,449,755 Michigan 10,071,822 Minnesota 5,197,621 Mississippi 2,918,785 Missouri 5,878,415 Montana 957,861

Nebraska 1,774,571 Nevada 2,565,382 New Hampshire 1,315,828 New Jersey 8,685,920 New Mexico 1,969,915 New York 19,297,729 North Carolina 9,061,032 North Dakota 639,715 Northern Mariana Islands 84,546

Ohio 11,466,917 Oklahoma 3,617,316 Oregon 3,747,455

Pennsylvania 12,432,792 Puerto Rico 3,941,459

Rhode Island 1,057,832

South Carolina 4,407,709 South Dakota 796,214

Tennessee 6,156,719 Texas 23,904,380

U.S. Virgin Islands 108,448 Utah 2,645,330 Vermont 621,254 Virginia 7,712,091

Washington 6,468,424 West Virginia 1,812,035 Wisconsin 5,601,640 Wyoming 522,830

Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Notice 2008–24

This notice provides guidance as to the corporate bond weighted average interest

The principal authors of this notice are Christopher J. Wilson, Office of the Associate Chief Counsel (Passthroughs and Special Industries) and Timothy L. Jones, Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this notice, con

tact Mr. Wilson at (202) 622–3040 (not a toll-free call).

February 25, 2008 466 2008–8 I.R.B.

monthly composite corporate bond rate derived from designated corporate bond indices. The methodology for determining the monthly composite corporate bond rate as set forth in Notice 2004–34 continues to apply in determining that rate. See Notice 2006–75, 2006–36 I.R.B. 366. The composite corporate bond rate for January 2008 is 6.16 percent. Pursuant to Notice 2004–34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for plan years beginning in the month shown below.

rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

CORPORATE BOND WEIGHTED AVERAGE INTEREST RATE

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pen

For Plan Years

sion Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 through 2007 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004–34, 2004–1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the

Corporate Bond Weighted

Beginning in Permissible Range

Month Year

Average 90% to 100%

February 2008 5.94 5.34 5.94

monthly corporate bond yield curve, the 24-month average corporate bond segment rates, and the funding transitional segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007–81, the monthly corporate bond yield curve derived from January 2008 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of January 2008 are, respectively, 4.39, 6.01, and 6.72. The three 24-month average corporate bond segment rates applicable for February 2008 under the election of § 430(h)(2)(G)(iv) are as follows:

Third Segment

YIELD CURVE AND SEGMENT RATES

Generally for plan years beginning after 2007 (except for delayed effective dates for certain plans under sections 104, 105, and 106 of PPA), § 430 of the Code specifies the minimum funding requirements that apply to single employer plans pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates

First Segment

(“segment rates”), each of which applies to cash flows during specified periods. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates. For plan years beginning in 2008 and 2009, a transitional rule under § 430(h)(2)(G) provides that the segment rates are blended with the corporate bond weighted average as specified above. An election may be made under § 430(h)(2)(G)(iv) to use the segment rates without applying the transitional rule.

Notice 2007–81, 2007–44 I.R.B. 899, provides guidelines for determining the

Second Segment

5.28 5.95 6.45

The transitional segment rates under § 430(h)(2)(G) applicable for February

For Plan Years

Beginning in

2008, taking into account the corporate bond weighted average of 5.94 stated above, are as follows:

First Segment

Second Segment

Third Segment

2008 5.72 5.94 6.11

2008–8 I.R.B. 467 February 25, 2008

ning in 2008 through 2011, the applicable interest rate is the monthly spot segment rate blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. Notice 2007–81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for January 2008, taking into account the January 2008 30-year Treasury rate of 4.33 stated above, are as follows:

Third Segment

30-YEAR TREASURY SECURITIES INTEREST RATE

Section 417(e)(3)(A)(ii)(II) (prior to amendment by PPA) defines the applicable interest rate, which must be used for purposes of determining the minimum present value of a participant’s benefit under § 417(e)(1) and (2), as the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. Section 1.417(e)–1(d)(3) of the Income Tax Regulations provides that the applicable interest rate for a month is the annual rate of interest on 30-year Treasury securities as specified by the Commissioner

For Plan Years

Beginning in

for that month in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin.

The rate of interest on 30-year Treasury securities for January 2008 is 4.33 percent. The Service has determined this rate as the monthly average of the daily determination of yield on the 30-year Treasury bond maturing in May 2037.

MINIMUM PRESENT VALUE SEGMENT RATES

Generally for plan years beginning after December 31, 2007, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24 month average. For plan years begin

First Segment

Second Segment

2008 4.34 4.67 4.81

DRAFTING INFORMATION

The principal author of this notice is Tony Montanaro of the Employee Plans,

Tax Exempt and Government Entities Division. Mr. Montanaro may be e-mailed at RetirementPlanQuestions@irs.gov .

February 25, 2008 468 2008–8 I.R.B.

Table I

Monthly Yield Curve for January 2008

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield

2008–8 I.R.B. 469 February 25, 2008