SECTION 7. DEVIATIONS FROM

INFORMATION IN APPLICATION

a. Insubstantial deviations —(i) In gen- eral . An allocation of volume cap is valid for § 54C 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) of the regulations, as amended, regarding insubstantial deviations in the information required for public approval of tax-exempt private activity bonds under § 147(f) of the Code. IRS approval is not required for insubstantial deviations, and the IRS will not provide advice or rule on whether a deviation is insubstantial.

(ii) Notice of insubstantial deviation (1) Deviations before the submission of Notice of Issuance . If the insubstantial deviation occurs before the Applicant submits the Notice of Issuance described in section 8.b. of this Notice, the Notice of Issuance must include a description of the insubstantial deviation.

(2) Deviations after the submission of the Notice of Issuance . If the insubstantial deviation occurs after the Applicant submits the Notice of Issuance required under section 8.b. of this Notice, the Applicant must submit a supplement to the Notice of Issuance that 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 —(i) Substan- tial deviations before issuance . Other than as provided in section 7.b.(ii) below, an allocation of volume cap under an Application is invalid for purposes of § 54C 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 and

may submit a new Application under this Notice or future administrative guidance, as applicable, reflecting the modified information.

(ii) Certain post-issuance deviations . A substantial deviation that occurs after the proposed bonds are issued and prior to the allocation of 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, and only if, the substantial deviation does not change the category of qualified owner for the project and the Applicant submits a supplement to the Notice of Issuance (as defined in section 8.b. of this Notice) to the IRS. The supplement must (1) include a statement demonstrating that the Applicant, at the time of the issuance of the bonds, reasonably expected that the issuance of the proposed bonds and the allocation of the proceeds of such bonds to expenditures would not substantially deviate from the information provided in the Application; (2) describe in detail the substantial deviation and the surrounding circumstances by reference to 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 the requirements of §§ 54A and 54C (including any applicable regulatory and administrative guidance published under those Code sections). The Applicant must send this supplement to the address set forth in section 8.b. of this Notice within 90 days of the date that the Applicant reasonably expected that there would be a deviation and the supplement must be accompanied by a declaration, subject to the penalty of perjury, in substantially the same form as the declaration under section 3.02.k. of this Notice.