Part III. Administrative, Procedural, and Miscellaneous

2010 Calendar Year Resident Population Estimates

Notice 2010–21

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 2010 calendar year population-based component of the State housing credit ceiling (Credit Ceiling) under § 42(h)(3)(C)(ii), the 2010 calendar year volume cap (Volume Cap) under § 146, and the 2010 volume limit (Volume Limit) under § 142(k)(5).

The population figures for both the population-based component of the Credit Ceiling and the Volume Cap are determined by reference to § 146(j). That section provides generally that determinations 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 2010 calendar year were published in Rev. Proc. 2009–50, 2009–45 I.R.B. 617. Section 3.08 of Rev. Proc. 2009–50 provides that, for calendar year 2010, the amounts used under § 42(h)(3)(C)(ii) to calculate the Credit Ceiling is the greater of $2.10 multiplied by the State population (see the resident population figures provided below) or $2,430,000. Further, section 3.15 of Rev. Proc. 2009–50 provides that the amounts used under § 146(d)(1) to calculate the Volume Cap for calendar year 2010 is the greater of $90 multiplied by the State population (see the resident population figures provided below) or $273,775,000.

The proper population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2010 calendar year are the estimates of the resident population of the 50 states, the District of Columbia, and Puerto Rico released electronically by the U.S. Census Bureau on December 23, 2009, in Press

Resident Population Figures

Release CB09–199. The proper population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2010 calendar year for Guam and the 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. The figures for these two areas are in the U.S. Census Bureau’s International Data Base (IDB) as 2009 midyear population figures. The proper population figure for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2010 calendar year for American Samoa is the figure released electronically by the U.S. Census Bureau in an IDB release note dated June 18, 2008, which is also in the IDB as a 2009 midyear population figure. The proper population figure for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2010 calendar year for the Northern Mariana Islands is the figure released electronically by the U.S. Census Bureau in an IDB release note dated June 23, 2009, which is also in the IDB as a 2009 midyear population figure.

For convenience, these estimates and figures are reprinted below.

Alabama 4,708,708 Alaska 698,473 American Samoa 65,628 Arizona 6,595,778 Arkansas 2,889,450

California 36,961,664 Colorado 5,024,748 Connecticut 3,518,288

Delaware 885,122 District of Columbia 599,657

Florida 18,537,969

Georgia 9,829,211 Guam 178,430

Hawaii 1,295,178

Idaho 1,545,801 Illinois 12,910,409 Indiana 6,423,113 Iowa 3,007,856

2010–12 I.R.B. 451 March 22, 2010

Resident Population Figures

Kansas 2,818,747 Kentucky 4,314,113

Louisiana 4,492,076

Maine 1,318,301 Maryland 5,699,478 Massachusetts 6,593,587 Michigan 9,969,727 Minnesota 5,266,214 Mississippi 2,951,996 Missouri 5,987,580 Montana 974,989

Nebraska 1,796,619 Nevada 2,643,085 New Hampshire 1,324,575 New Jersey 8,707,739 New Mexico 2,009,671 New York 19,541,453 North Carolina 9,380,884 North Dakota 646,844 Northern Mariana Islands 51,484

Ohio 11,542,645 Oklahoma 3,687,050 Oregon 3,825,657

Pennsylvania 12,604,767 Puerto Rico 3,967,288

Rhode Island 1,053,209

South Carolina 4,561,242 South Dakota 812,383

Tennessee 6,296,254 Texas 24,782,302

U.S. Virgin Islands 109,825 Utah 2,784,572

Vermont 621,760 Virginia 7,882,590

Washington 6,664,195 West Virginia 1,819,777 Wisconsin 5,654,774 Wyoming 544,270

rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. 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

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

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

Notice 2010–24

This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest

March 22, 2010 452 2010–12 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, 2006–2 C.B. 366. The composite corporate bond rate for February 2010 is 6.01 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 on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), 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 Pension Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to cal

For Plan Years

culate 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%

March 2010 6.40 5.76 6.40

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 February 2010 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of February 2010 are, respectively, 2.29, 5.77, and 6.63. The three 24-month average corporate bond segment rates applicable for March 2010 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, 2007–2 C.B. 899, provides guidelines for determining the

Second Segment

4.44 6.62 6.74

The transitional segment rates under § 430(h)(2)(G) applicable for March 2010, taking into account the corporate bond

For Plan Years

Beginning in

weighted average of 6.40 stated above, are as follows:

First Segment

Second Segment

Third Segment

2009 5.09 6.55 6.63

The transitional rule of § 430(h)(2)(G) does not apply to plan years starting in

2010. Therefore, for a plan year starting in 2010 with a lookback month to March

2010, the funding segment rates are the three 24-month average corporate bond

2010–12 I.R.B. 453 March 22, 2010

multiemployer plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in section 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88–73, 1988–2 C.B. 383, provides guidelines for determining the weighted average interest rate. The following rates were determined for plan years beginning in the month shown below.

segment rates applicable for March 2010, listed above without blending for the transitional period.

30-YEAR TREASURY SECURITIES INTEREST RATES

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 applica

For Plan Years

ble interest rate for a month is the annual rate of interest on 30-year Treasury securities as specified by the Commissioner 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 February 2010 is 4.62 percent. The Service has determined this rate as the average of the yield on the 30-year Treasury bond maturing in November 2039 determined each day through February 10, 2010, and the yield on the 30-year Treasury bond maturing in February 2040 determined each day for the balance of the month.

Generally for plan years beginning after 2007, § 431 specifies the minimum funding requirements that apply to

30-Year Treasury Weighted

Beginning in Treasury Permissible Range

Month Year

90% to 105% Average

March 2010 4.39 3.95 4.61

ing the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for February 2010, taking into account the February 2010 30-year Treasury rate of 4.62 stated above, are as follows:

Third Segment

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

For Plan Years

Beginning in

24-month average. For plan years beginning in 2008 through 2011, the applicable interest rates are the monthly spot segment rates 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 determin

First Segment

Second Segment

2009 3.69 5.08 5.42 2010 3.22 5.31 5.83

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 .

March 22, 2010 454 2010–12 I.R.B.

Table I

Monthly Yield Curve for February 2010

Derived from February 2010 Data

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield

2010–12 I.R.B. 455 March 22, 2010