Current through Register Vol. 49, No. 9, September, 2024
I. PURPOSE
Pursuant to Arkansas Laws Act 855 of 2019, the Division of
Arkansas Heritage through its Arkansas Historic Preservation Program hereby
establishes these rules governing the four part application process for which
the Owner of a historic Arkansas property may apply for an income tax credit
under The Arkansas Major Historic Rehabilitation Income Tax Credit Act.
II. ENABLING LEGISLATION
Arkansas Code Annotated $
19-5-1150 (Act 855 of 2019)
created on the books of the Treasurer of State, the Auditor of State, and the
Chief Fiscal Officer of the State, a trust fund known as the "Arkansas Major
Historic Rehabilitation Trust Fund".
Arkansas Code Annotated $
26-51-2601et seq. (Act 855 of
2019), the "Arkansas Major Historic Rehabilitation Income Tax Credit Act",
allows a credit against the Arkansas Income Tax Act of 1929, Ark. Code Ann. $$
26-51-101 -
26-51-2510 and the Insurance
Premium Tax levied under $$
26-57-603 -
26-57-605;
III. DEFINITIONS
"Act" means Ark. Acts, No. 855 as codified at Arkansas Code
Annotated $
19-5-1150 and at $
26-51-2601et seq., as such may be
amended from time to time.
"AHPP" means the Arkansas Historic Preservation Program, an
agency of the Division of Arkansas Heritage ("DAH") under the Arkansas
Department of Parks, Heritage & Tourism.
"Application" means the Arkansas Major Historic Rehabilitation
Tax Credit Application that constitutes a written plan for development and
operation of a Rehabilitation project. Applications are submitted in four
parts:
1. Determination of Eligibility
(Part 1) is used by the AHPP to determine whether a property is of historic
significance and eligible to receive tax credits. Upon approval of a Part 1,
the AHPP will issue a certificate of eligibility.
2. Proposed Rehabilitation Project (Part 2)
is used by AHPP to determine whether a proposed Rehabilitation project will
comply with the Secretary of the Interior's Standards for the Treatment of
Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring
& Reconstructing Historic Buildings (as used herein, the "Secretary's
Standards"). See
https://www.nps.gov/tps/standards/treatment-guidelines-2017.pdf3. Application for Funding Allocation (Part
3) is the process used by AHPP to guarantee that projects will have funding for
their requested Major Historic Rehabilitation Tax Credit at the completion of
the rehabilitation process. Funding awards may not exceed $12 million dollars.
Rehabilitation projects will be ranked based on the priorities of the Arkansas
Major Historic Rehabilitation Tax Credit Act via an allocation priority score.
Funding will be reserved on a priority basis, according to assigned allocation
priority score. Applications which would cause the total amount of funding
allocation to exceed the amount of non-allocated funding remaining in the
Arkansas Major Historic Rehabilitation Trust Fund will be rolled over to the
following period for rescoring.
4.
Completed Rehabilitation Project (Part 4) is used by AHPP to determine whether
a completed Rehabilitation project successfully complied with the Secretary's
Standards. Upon approval of a Part 4, the AHPP will issue a Certificate of
Completion. Holders will submit Certificates of Completion to the appropriate
taxing authority to claim tax credits.
"Arkansas Major Historic Rehabilitation Income Tax Credit"
means the income tax credit allowed under this subchapter against the income
tax imposed by this chapter and the Premium Tax levied under $$
26-57-601 -
26-57-605;
"Certification of Completion" means a certificate issued by the
Division of Arkansas Heritage certifying that a project is a Certified
Rehabilitation of an Eligible Property that qualifies for the Arkansas Major
Historic Rehabilitation Income Tax Credit;
"Certified Rehabilitation" means the total of appropriate and
approved Rehabilitation work on an Eligible Property that results in a
substantial rehabilitation of an Eligible Property that has been issued an
eligibility certificate.
"Eligible Property" means property that is located in the state
that:
(A) Qualifies as a certified
historic structure under 26 U.S.C. $ 47, as it existed on January 1,
2019;
(B) Will qualify as a
certified historic structure following Certified Rehabilitation;
(C) Is listed in the National Register of
Historic Places;
(D) Is designated
as contributing to a district listed in the National Register of Historic
Places; or
(E) Is eligible for
designation as contributing to a district listed in the National Register of
Historic Places following Certified Rehabilitation.
"Federal Rehabilitation Tax Credit" means the federal tax
credit provided under 26 U.S.C. $ 47, as it existed on January 1, 2009;
"Historic District" means a geographically definable area,
urban or rural, that possesses a significant concentration, linkage or
continuity of sites, buildings, structures or objects united historically or
aesthetically by plan or physical development. A district may also comprise
individual elements separated geographically during the period of significance
but linked by association or function.
"Holder" means the holder of a Certification of Completion that
is:
(A) A person, firm, or corporation
subject to the income tax imposed by this chapter; or
(B) An insurance company paying the Premium
Tax on its gross premium receipts;
"Income Tax Credits" means the authorized amount that may be
applied against Arkansas income tax or Premium Tax, whether earned by an
individual, partnership, limited liability company, S Corporation or
Corporation.
"National Register" or "National Register of Historic Places"
means the National Register of districts, sites, buildings, structures, and
objects significant in American history, architecture, archeology, engineering,
and culture pursuant to section 101(a)(1) of the National Historic Preservation
Act of 1966, as amended. (The procedures of the National Register appear in 36
CFR part 60 et seq.)
"Owner" means a person or an entity that owns Eligible Property
and is the initial recipient of the Certification of Completion from the
Division of Arkansas Heritage;
"Premium Tax" means a tax levied under Ark. Code Ann. $$
26-57-603 -
26-57-615;
"Qualified Rehabilitation Expenses" means costs and expenses
incurred to complete a Certified Rehabilitation that are Qualified
Rehabilitation Expenses under the Federal Rehabilitation Tax Credit or under
the Arkansas Major Historic Rehabilitation Income Tax Credit.
"Rehabilitation" means the process of returning a building or
buildings to a state of utility, through repair or alteration, which makes
possible an efficient use while preserving those portions and features of the
building and its site and environment which are significant to its historic,
architectural, and cultural values.
Funding Reservation Award: Where funds within the Arkansas
Major Historic Rehabilitation Trust Fund are obligated to a specific
rehabilitation project which continues to meet progression requirements.
Funding awards may not exceed $12 million dollars.
"State Historic Preservation Officer" (SHPO) means the Director
of the Division of Arkansas Heritage, or other official designated by the
Governor or statute to act as liaison for purposes of administering historic
preservation programs within Arkansas.
"Tourism Attraction" means cultural or historical site,
recreational or entertainment facility, area of natural phenomenon or scenic
beauty, theme park, amusement or entertainment park, indoor or outdoor play or
music show, botanical gardens, or cultural or educational
centers.
IV. DELEGATION OF
AUTHORITY
A. The State Historic Preservation
Officer is delegated all powers necessary and convenient to carry out the
responsibilities contained in these rules.
B. The Arkansas Department of Finance and
Administration and the Arkansas State Insurance Department are responsible for
all procedures, legal determinations, and rules concerning the tax consequences
relating to the Act. Any certification made by the State Historic Preservation
Officer pursuant to the Act or these rules shall not be considered as binding
upon the Arkansas Department of Finance and Administration and the Arkansas
State Insurance Department with respect to tax consequences.
V. INTRODUCTION TO CERTIFICATIONS
OF ELIGIBILITY AND REHABILITATION
A. Who may
apply:
1. Ordinarily, only the fee simple
Owner of the property in question may apply for the certifications herein
described. However, if an Application is made by someone other than the fee
simple Owner, the Application must be accompanied by a written statement from
the fee simple Owner indicating that the Owner is aware of the Application and
has no objection to the request for certification.
2. Upon receipt of an Application, the AHPP
may determine whether a particular structure qualifies as an Eligible Property.
The AHPP shall do so, however, only after notifying the Owner of the request,
informing such Owner of the possible tax consequences of such a decision, and
permitting the Owner a 30-day time period to submit written comments to the
AHPP prior to decision. Such time period for comment may be waived by the
Owner.
3. Owners of properties that
appear to meet National Register criteria, but are not yet listed in the
National Register or are located within potential Historic Districts, may
request preliminary determinations of historic significance from the AHPP as to
whether such structures may qualify as Eligible Properties when and if the
properties or the potential Historic Districts in which they are located are
listed in the National Register. Preliminary determinations may also be
requested for properties outside the period or area of historic significance of
registered Historic Districts. Procedures for obtaining these determinations
shall be the same as those herein described. Such determinations are
preliminary only and are not binding on the AHPP. Preliminary determinations
will become final as of the date of the listing of the property, or district,
in the National Register. For properties outside the period or registered
Historic District, preliminary determinations will become final, except as
provided below, when the district documentation on file with the National Park
Service ("NPS") is formally amended. If during review of a request for a
Certificate of Rehabilitation, it is determined that the property does not
contribute to the historic significance of the district because of changes that
occurred after the preliminary determination of historic significance was made.
Eligible Property designation will be denied.
4. Owners of structures not yet designated
Eligible Properties may obtain determinations from the AHPP on whether
Rehabilitation proposals meet the Secretary's Standards. Such determinations
will be made only when the Owner has requested a preliminary determination of
the historic significance of the property as described above and such request
for determination has been acted upon by the AHPP. Final certifications of
Rehabilitation will be issued only to Owners of Eligible Properties.
5. Owners of properties who have not taken a
Rehabilitation tax credit on the Eligible Property within the past 24 months.
B. How to apply:
1. Requests for certifications of eligibility
and of Rehabilitation shall be made on Major Historic Preservation
Certification Applications. Part l of the Application shall be used in
requesting a certification of eligibility and for preliminary determinations of
eligibility; while Part 2 of the Application, shall be used in requesting an
evaluation of a proposed Rehabilitation project.
2. Application forms are available by
contacting AHPP and requesting a hard copy or an electronic version via e-mail.
It is important that an applicant contact AHPP staff prior taking any action on
the proposed tax credit project.
3.
Applications should be reviewed within 30 days of receipt of a complete,
adequately documented Application. Where adequate documentation is not
provided, the Owner will be notified of the additional information needed to
undertake or complete review. The time periods in this part are based on the
receipt of a complete Application. They will be adhered to as closely as
possible and are defined as calendar days. They are not, however, considered to
be mandatory, and the failure to complete review within the designated periods
does not waive or alter any certification requirement. It is the applicant's
responsibility to notify the State Historic Preservation Officer if Application
reviews are not completed within the time periods specified above. The State
Historic Preservation Officer, in turn, will consult with the AHPP to ensure
that the review is completed in as timely manner as possible under the
circumstances.
4. Approval of
Applications and amendments to Applications is conveyed only in writing by duly
authorized officials of the AHPP acting on behalf of the State Historic
Preservation Officer. Decisions with respect to certifications are made on the
basis of the descriptions contained in the Application form and other available
information. In the event of any discrepancy between the Application form and
other, supplementary material submitted with it (such as architectural plans,
drawings, specifications, etc.), the applicant shall be requested to resolve
the discrepancy in writing. In the event the discrepancy is not resolved, the
description in the Application form shall take precedence. Intentional
falsification of factual representations in the Application is subject to
criminal and civil sanctions.
5.
Although certifications of eligibility and Rehabilitation are considered
separately, Owners must submit Part 1 of the Historic Preservation
Certification Application prior to, or with, Part 2. Part 2 of the Application
will not be processed until an adequately documented Part 1 is on file and
acted upon unless the property is already individually listed on the National
Register. Applications will not be considered if the Owner has objected to the
listing of the property in the National Register.
VI. APPLICATION PERIOD
A. The Division of Arkansas Heritage shall
accept Applications for the Arkansas Major Historic Rehabilitation Income Tax
Credit beginning July 1, 2020, and ending June 30th, 2025. All tax credit
projects must have their completed Part III Application submitted by May 30th
2030. Any additional work required to bring the project into compliance with
the Secretary's Standards must have been completed and final documentation
submitted for review no later than May 30th 2030.
B. An Arkansas Major Historic Rehabilitation
Income Tax Credit approved under an Application on or before the June 30, 2030
date may be carried forward to be claimed up to five years from the date of
issue of the certificate.
VII. CERTIFICATIONS OF ELIGIBILITY (Part 1
Application)
A. Requests for certifications of
historic significance should be made by the Owner to determine:
1. That a property located within a National
Register Historic District is of historic significance to such district;
or
2. That a property not yet
listed on the National Register appears to meet National Register criteria;
or
3. That a property located
within a potential Historic District appears to contribute to the historic
significance of such district; and
4. If a property has received a
Rehabilitation tax credit within the past 24 months.
B. To determine whether a property is
individually listed or is part of a district in the National Register, the
Owner may consult the AHPP for current information.
C. If a property is located within the
boundaries of a National Register Historic District and the Owner wishes the
AHPP to certify whether the property contributes or does not contribute to the
historic significance of the district, or if the Owner is requesting a
preliminary determination of eligibility, the Owner must complete Part 1 of the
Historic Preservation Certification Application according to instructions
accompanying the Application. Such documentation includes but is not limited
to:
1. Name and mailing address of the
Owner;
2. Name and address of the
property;
3. Name of the Historic
District;
4. Current photographs of
the property; photographs of the building and its site and landscape features
prior to alteration if Rehabilitation has been completed; photograph(s) showing
the property along with adjacent properties and structures on the street; and
photographs of interior features and spaces adequate to document historic
significance;
5. Brief description
of appearance including alterations, distinctive features and spaces, and
date(s) of construction;
6. Brief
statement of historic significance summarizing how the property does or does
not reflect the values that give the district its distinctive historical and
visual character, and explaining any significance attached to the property
itself (i.e., unusual building techniques, important event that took place
there, etc.).
7. Sketch map clearly
delineating the property's location within the district; and
8. Signature of the Owner requesting or
concurring in a request for evaluation.
D. If a structure is individually listed in
the National Register, it is generally considered an Eligible Property or
certified historic structure and no further certification is required, with the
following exceptions:
1. If the property is
individually listed in the National Register and the Owner believes it has lost
the characteristics that caused it to be nominated and therefore wishes it
delisted, the Owner should refer to the delisting procedures outlined in the
U.S. Code of Federal Regulations at 36 CFR part 60.
2. Some properties individually listed in the
National Register include more than one structure. In such cases, the Owner
must submit a single Part 1 Application and include descriptions of all the
buildings within the listing. The AHPP will determine which of the structures
included within the listing are of historic significance to the
property.
E. Properties
containing more than one structure where the structures are judged by the AHPP
to have been functionally related historically to serve an overall purpose
(such as a mill complex or a residence and carriage house) will be treated as a
single Eligible Property, whether the property is individually listed in the
National Register or is located within a Historic District, when rehabilitated
as part of an overall project. Structures that are functionally related
historically are those which have functioned together to serve an overall
purpose during the property's period of significance. In the case of a property
within a registered Historic District that contains more than one structure
where the structures are judged to be functionally related historically, an
evaluation will be made to determine whether the component buildings contribute
to the historic significance of the property and whether the property
contributes to the significance of the Historic District.
F. Applications for preliminary
determinations for individual listing must show how the property individually
meets the National Register criteria for evaluation. An Application for a
property located in a potential Historic District must document how the
district meets the criteria and how the property contributes to the historic
significance of that district. An Application for a preliminary determination
for a property in a Historic District that is outside the period of
significance in the district documentation on file with the AHPP must document
and justify the expanded historic significance of the district and how the
property contributes to the significance of the district or document the
individual historic significance of the property. Applications must contain
substantially the same level of documentation as National Register nominations,
as specified in the U.S. Code of Federal Regulations at 36 CFR part 60 and
National Register Bulletin 16, Guidelines for Completing National Register of
Historic Places Forms (available from the AHPP).
Owners should understand that intent to nominate to the
National Register, or amend an existing National Register listing, does not
constitute listing in the National Register, nor does it constitute a
certification of eligibility as required by law for tax incentives. Owners
should further understand that they are proceeding at their own risk. If the
property or district is not listed in the National Register for procedural,
substantive or other reasons; if the district documentation is not formally
amended; or if the historic significance of the property has been lost as a
result of alterations or damage, these preliminary determinations of
significance will not become final. The State Historic Preservation Officer
must nominate the property or the district before the preliminary certification
of eligibility can become final.
G. The AHPP discourages the moving of
historic buildings from their original sites. However, if a building is to be
moved as part of a Rehabilitation project for which certification is sought,
the Owner must follow different procedures depending on whether the building is
individually listed in the National Register or is within a Historic District.
When a building is moved, every effort should be made to re-establish its
historic orientation, immediate setting, and general environment. Moving a
building may result in removal of the property from the National Register or,
for buildings within a Historic District, denial or revocation of a
certification of eligibility. Consequently, a moved building may, in certain
circumstances, be ineligible for tax credits.
H. Documentation must be submitted that
demonstrates:
1. The effect of the move on the
building's integrity and appearance (any proposed demolition, proposed changes
in foundations, etc.);
2.
Photographs of the site and general environment of the proposed site; Evidence
the proposed site does not possess historical significance that would be
adversely affected by the moved building;
3. The effect of the move on the distinctive
historical and visual character of the district, where applicable;
and
4. The method to be used for
moving the building.
For buildings individually listed in the National Register, the
procedures contained in the U.S. Code of Federal Regulations at 36 CFR part 60
must be followed prior to the move, or the building will be removed from the
National Register, will not be considered an Eligible Property, and will have
to be renominated to the National Register. The Owner may submit a Part 1
Application in order to receive a preliminary determination from the AHPP of
whether a move will cause the property to be removed from the National
Register. However, preliminary approval of such a Part 1 application does not
satisfy the requirements for property eligibility. The applicant must follow
the remaining National Register procedures to ensure that the moved building
will remain listed in the National Register and retain its status as an
Eligible Property.
If an Owner moves (or proposes to move) a building into a
National Register Historic District or moves (or proposes to move) a building
elsewhere within a Historic District, a Part 1 Application containing the
required information must be submitted. The building to be moved will be
evaluated to determine if it contributes to the historic significance of the
district both before and after the move.
I. Properties within Historic Districts will
be evaluated to determine if they contribute to the historic significance of
the district by Application of the Secretary's Standards for Evaluating
Significance within Historic Districts as listed in the U.S. Code of Federal
Regulations at 36 CFR $67.5.
J.
Once the historic significance of a property located within a registered
Historic District or a potential Historic District has been determined by the
AHPP, written notification will be sent to the Owner in the form of a
certification of eligibility.
K.
Owners shall report to the AHPP any substantial damage, alteration or changes
to a property that occurs after issuance of a certification of eligibility and
prior to a final Certification of Completion. The AHPP may withdraw a
certification of eligibility, upon thirty days' notice to the Owner, if a
property has been damaged, altered or changed effective as of the date of the
occurrence, the property may also be removed from the National
Register.
VIII.
STANDARDS FOR EVALUATING SIGNIFICANCE WITHIN HISTORIC DISTRICTS
A. Properties located within Historic
Districts are reviewed by the AHPP to determine if they contribute to the
historic significance of the district by applying the following Standards for
Evaluating Significance within Historic Districts:
1. A building contributing to the historic
significance of a district is one which by location, design, setting,
materials, workmanship, feeling and association adds to the district's sense of
time and place and historical development.
2. A building not contributing to the
historic significance of a district is one which does not add to the district's
sense of time and place and historical development; or one where the location,
design, setting, materials, workmanship, feeling and association have been so
altered or have so deteriorated that the overall integrity of the building has
been irretrievably lost.
3.
Ordinarily, buildings that have been built within the past 50 years shall not
be considered to contribute to the significance of a district unless a strong
justification concerning their historical or architectural merit is given or
the historical attributes of the district are considered to be less than 50
years old.
B. A
condemnation order may be presented as evidence of physical deterioration of a
building, but will not of itself be considered sufficient evidence to warrant
certification of historic non-significance for loss of integrity. In certain
cases it may be necessary for the Owner to submit a structural engineer's
report to help substantiate physical deterioration and/or structural damage.
Guidance on preparing a structural engineer's report is available from the
AHPP.
C. Some properties listed in
the National Register, primarily districts, are resources whose concentration
or continuity possesses greater historical significance than many of their
individual component buildings and structures. These usually are documented as
a group rather than individually. Accordingly, this type of National Register
documentation is not conclusive for the purposes of determining eligibility and
must be supplemented with information on the significance of the specific
property. Certifications of historic significance and non-significance will be
made on the basis of the Application documentation, existing National Register
documentation, and other available information as needed. The AHPP may submit
an amended National Register nomination or the National Park Service if the
Application material warrants such an amendment. If a certification request is
received for a property, which is not yet listed on the National Register or
which is outside a district's established period or area of significance, a
preliminary determination of eligibility will be issued only if the request
includes adequate documentation and if there is written assurance that the
Owner plans to nominate the property or district or that the district
nomination in question is being revised to expand its significance.
Certifications will become final when the property or district is listed or
when the district documentation is officially amended, unless the historic
significance of the property has been lost as a result of alteration or damage.
For procedures on amending listings to the National Register and additional
information on the use of National Register documentation. Owners should
contact the AHPP.
D. Where
Rehabilitation credits are sought, certifications of eligibility will be made
on the appearance and condition of the property before Rehabilitation was
begun.
E. If a non-historic surface
material obscures a facade, it may be necessary for the Owner to remove a
portion of the surface material prior to requesting certification so that a
determination of historic significance or non-significance can be made. After
the material has been removed, if the obscured facade has retained substantial
historic integrity and the property otherwise contributes to the Historic
District, it will be determined to be an Eligible Property.
IX CERTIFICATIONS OF PROPOSED
REHABILITATION (Part 2 Application)
A. Owners
who want Rehabilitation projects for Eligible Properties to be certified by the
AHPP as being consistent with the historic character of the structure, and,
where applicable, the district in which the structure is located, thus
qualifying as a Certified Rehabilitation, shall comply with the procedures
listed below:
1. To initiate review of a
Rehabilitation project for certification purposes, an Owner must complete Part
2 of the Historic Preservation Certification Application according to
instructions accompanying the Application. The Application may describe a
proposed Rehabilitation project, a project in progress, or a completed
project.
2. These instructions
explain in detail the documentation required for certification of a
Rehabilitation project. In all cases, documentation, including photographs
(color processed photographs) adequate to document the appearance of the
structure(s), both on the exterior and on the interior, and its site and
environment prior to Rehabilitation must accompany the Application. The social
security or taxpayer identification number(s) of all Owners must be provided in
the Application. Other documentation, such as window surveys Or cleaning
specifications, may be required by the AHPP to evaluate certain Rehabilitation
projects. Plans for any attached, adjacent, or related new construction must
also accompany the Application. Where necessary documentation is not provided,
review and evaluation may not be completed and a denial of certification will
be issued on the basis of lack of information.
3. Owners are strongly encouraged to submit
Part 2 of the Application prior to undertaking any Rehabilitation work. Owners
who undertake Rehabilitation projects without prior review and approval from
the AHPP do so strictly at their own risk. Because the circumstances of each
Rehabilitation project are unique to the particular certified historic
structure involved, certifications that may have been granted to other
Rehabilitations are not specifically applicable and may not be relied on by
Owners as applicable to other projects.
4. A project does not become a Certified
Rehabilitation until it is completed and so designated by the AHPP. A
determination that the completed Rehabilitation of a structure not yet
designated an Eligible Property meets the Secretary's Standards does not
constitute a Certification of Completion. When requesting certification of a
completed Rehabilitation project, the Owner shall submit a Request for
Certification of Completion (Part 4) and provide the project completion date
and a signed statement that the completed Rehabilitation project meets the
Secretary's Standards and is consistent with the work described in Part 2 of
the Major Historic Preservation Certification Application. Also required in
requesting Certification of Completion are costs attributed to the
Rehabilitation, photographs adequate to document the completed Rehabilitation,
and the social security or taxpayer identification number(s) of all
Owners.
B. For
certification purposes, a Rehabilitation project encompasses all work on the
interior and exterior of the Eligible Property and its site and environment, as
determined by the AHPP, as well as related demolition, new construction or
Rehabilitation work, which may affect the historic qualities, integrity or
site, landscape features, and environment of the Eligible Property. More
specific considerations in this regard are as follows:
1. All elements of the Rehabilitation project
must meet the Secretary's Standards for Rehabilitation; portions of the
Rehabilitation project not in conformance with the Standards may not be
exempted, in general, an Owner undertaking a Rehabilitation project will not be
held responsible for prior Rehabilitation work not part of the current project
or Rehabilitation work that was undertaken by previous Owners or third
parties.
2. However, if the AHPP
considers, or has reason to consider, that a project submitted for
certification does not include the entire Rehabilitation project subject to
review hereunder, the AHPP may choose to deny a Certificate of Completion or to
withhold a decision on such a certification until such time as the AHPP has
determined the proper scope of the Rehabilitation project to be reviewed.
Factors to be taken into account by the AHPP in this regard include, but are
not limited to, the facts and circumstances of each Application and:
a. whether previous demolition, construction
or Rehabilitation work irrespective of ownership or control at the time was in
fact undertaken as part of the Rehabilitation project for which certification
is sought; and
b. whether property
conveyances, reconfigurations, ostensible ownership transfers or other
transactions were transactions which purportedly limit the scope of a
Rehabilitation project for the purpose of review by the AHPP without
substantially altering beneficial ownership or control of the property. The
fact that a structure may still qualify as an eligible after having undergone
inappropriate Rehabilitation, construction or demolition work does not preclude
the AHPP from determining that such inappropriate work is part of the
Rehabilitation project to be reviewed.
3. Conformance to the Standards will be
determined on the basis of the Application documentation and other available
information by evaluating the property as it existed prior to the commencement
of the Rehabilitation project, regardless of when the structure becomes or
became an Eligible Property.
4. For
Rehabilitation projects involving more than one Eligible Property where the
structures are judged by the AHPP to have been functionally related
historically to serve an overall purpose (such as a mill complex or a residence
and carriage house) a Certification of Completion will be issued on the merits
of the overall project rather than for each structure or individual component.
For Rehabilitation projects where there is no historic functional relationship
among the structures, the decision will be made for each separate Eligible
Property regardless of how they are grouped for ownership or development
purposes,
5. Demolition of a
building as part of a Rehabilitation project involving multiple buildings may
result in denial of a Certification of Completion. In projects where there is
no historic functional relationship among the structures being rehabilitated,
related new construction which physically expands one Eligible Property
undergoing Rehabilitation and, therefore, directly causes the demolition of an
adjacent structure, will generally result in denial of a Certification of
Completion unless a determination has been made that the building to be
demolished is not an Eligible Property. In Rehabilitation projects where the '
structures have been determined to be functionally related historically,
demolition of a component may be approved, in limited circumstances, when:
a. The component is outside the period of
historic significance of the property, or
b. The component is so deteriorated or
altered that its integrity has been irretrievably lost; or
c. The component is a secondary one that
generally lacks historic, engineering, or architectural significance or does
not occupy a major portion of the site and persuasive evidence is present to
show that retention of the component is not technically or economically
feasible.
6. In
situations involving Rehabilitation of an Eligible Property in a Historic
District, the AHPP will review the Rehabilitation project first as it affects
the Eligible Property and second as it affects the district and make a decision
accordingly.
7. In the event that
an Owner of a portion of an Eligible Property requests a certificate of
completion related only to that portion, but there is or was a larger related
Rehabilitation project(s) occurring with respect to the Eligible Property,
AHPP's decision on the requested Certification of Completion will be based on
review of the overall Rehabilitation project(s) for the Eligible
Property.
C. Upon
receipt of the complete Application describing the Rehabilitation project, the
AHPP shall determine if the project is consistent with the Secretary's
Standards. If the project does not meet the Secretary's Standards, the Owner
shall be advised of that fact in writing and, where possible, will be advised
of necessary revisions to meet such standards.
D. Once a proposed or ongoing project has
been approved, substantive changes in the work as described in the Application
must be brought promptly to the attention of the AHPP by written statement to
ensure continued conformance to the Secretary's Standards. The AHPP will notify
the Owner in writing whether the revised project continues to meet these
standards. Oral approvals of revisions are not authorized or valid.
E. Projects in progress may be inspected by
an authorized representative of the State Historic Preservation Officer to
determine if the work meets the Secretary's Standards. The AHPP may deny a
Certification of Completion if it is determined that the Rehabilitation project
was not undertaken as represented by the Owner in the Application.
F. If a proposed, ongoing, or completed
Rehabilitation project does not meet the Secretary's Standards, an explanatory
letter will be sent to the Owner by the AHPP. A rehabilitated property not in
conformance with these Standards and which is determined to have lost those
qualities which caused it to be nominated to the National Register will be
removed from the National Register in accordance with U.S. Department of the
Interior regulations.
G. All
Rehabilitation projects seeking tax credits must address one or more of the
Program's priorities. Applications should indicate which of these priorities
their project addresses when submitting the Part 2 Application. Applications
will be prioritized in the following order:
1.
Creation of a new business
2.
Expansion of an existing business
3. Establishment of a Tourism
Attraction
4. Revitalization of a
commercial Historic District
5.
Rehabilitation of a significant property in a historic neighborhood
X. Application for
Allocation of Funding (Part 3)
A. Eligibility
for Allocation of Funding
Upon the approval of Part 2 of the application, a
rehabilitation project shall become eligible to apply for the Funding
Reservation Award within the Arkansas Major Historic Rehabilitation Trust Fund
within the Allocation of Funding Enrollment Period. Funding must be allocated
to a project via Part 3 before it may submit Part 4 of its application.
B. Part 3 Application components
All Part 3 Applications must contain:
1. The
Completed Part 1 Application.
2.
The Completed Part 2 Application
3.
A commercially reasonable estimate of total eligible rehabilitation costs
signed by a licensed commercial contractor. Estimates shall not result in the
reservation of over $12 million dollars in funding.
4. The Allocation Priority Score
Application
C. Allocation
Priority Score Application
Allocation Priority Score Application will contain the
following categories that applicants may request for certification and
cumulative scoring;
Primary Prioritization Category (Select up to three to apply
for)
1. Creation of a new business (Up
to 80 points)
2. Expansion of an
existing business (Up to 75 points)
3. Establishment of a tourism attraction (Up
to 70 points)
4. Revitalization of
a commercial historic district (Up to 65 points)
5. Rehabilitation of a significant property
in a historic neighborhood. (Up to 60 points)
Secondary Prioritization Category (Select all
applicable)
1. Potential Structural
Crisis and Dilapidation (Up to 50 points)
2. Percentage of Occupancy Increase (Up to 50
points)
3. Financing Availability
(Up to 50 points)
4. Historic
Importance of Property to the State or Local Community (Up to 50
points)
5. Potential to Contribute
to Revitalization. (Up to 50 points)
Applications for the Funding Reservation Award shall be
reviewed and Allocation Priority Score Applications scored by the State
Historic Preservation Officer in consultation with the Director of the
Department of Heritage and the Federal Programs and Tax Credit Manager within
the Department of Heritage.
D. Reservation Process
The AHPP shall first have an open reservation application
period from 03/01/2024 to 03/31/2024. In this period, major historic
rehabilitation projects which have completed Part 1 and Part 2 applications may
apply for the allocation of funds. At the conclusion of the application period,
the projects shall be scored. No project with a score of less than 100 shall be
given a funding allocation. When funding all allocation applications with a
score of 100 or greater would cause allocated funds to exceed the amount
certified available, the projects shall be ranked, and the highest score shall
be given the highest priority. Projects which would cause the allocation of
funds to exceed the current certification shall be rolled over to the next open
reservation application period for rescoring. No project shall be awarded more
that $12 million dollars in funding.
Beginning in Fiscal Year 2025, the Department of Heritage shall
have biannual open application periods each July
l-31st and January
l-31st. In this period, major historic
rehabilitation projects which have completed Part 1 and Part 2 applications may
apply for Part 3 allocation of funding . At the conclusion of the application
period, the Allocation Priority Score Applications shall be scored. No project
with a score of less than 100 shall be given funding allocation. When
allocating funding for all allocation applications with a score of 100 or
greater would, as measured by AHPP, cause the amount of total allocated funds
to exceed the amount certified available, the projects shall be ranked, and the
highest score shall be given the highest priority. Projects which would cause
the total amount of funds allocated via the Part 3 process to exceed the
current funding certification shall be rolled over to next open reservation
application period for rescoring. No project shall be awarded more than $12
million dollars in funding.
Only projects with a Funding Reservation Award shall be deemed
to have completed Part 3 of the application.
E. Amendments:
Amendments may alter the applicant, scope of the project, cost,
timeline for completion, financing, rehabilitation activities, or end use. No
amendment may be accepted which materially negates the original primary or
secondary prioritization categories of the restoration project. Amendments to
the Part 3 Application total rehabilitation cost reservation are acceptable to
the extent additional funding is available. The acceptance of any amendment
resides in the sole discretion of the AHPP.
F. Progression Requirements:
Upon receiving a Funding Reservation Award for a specific
project, the AHPP shall give the project a date by which the Part 4 application
must be submitted to retain the reservation of funds. This date shall consider
the scope and difficulty of the project attempted, while encouraging
timeliness. If the Part 4 application is not submitted by the required date,
the rehabilitation project must reapply for funding allocation.
The AHPP may request evidence of the progression of a specific
project at their discretion, but no more often than every 60 days. Acceptable
evidence may include permits, drawings, active permit applications, new
financial documents, purchase orders, site photographs, or other industry
standard evidence of progression. If no material evidence is provided to the
AHPP within 90 days of a request, the reservation shall be forfeited.
Forfeited reservation awards will be made available to other
applicants to the extent possible. DFA will be notified of any forfeiture of
reservation awards for the revocation of the fund obligation.
XI. STANDARDS FOR
REHABILITATION
A. The standards for
rehabilitation cited herein are the criteria used to determine if a
Rehabilitation project qualifies as a Certified Rehabilitation. The intent of
the standards is to assist the long term preservation of a property's
significance through the preservation of historic materials and features. The
standards pertain to historic buildings of all materials, construction types,
sizes, and occupancy and encompass the exterior and the interior of historic
buildings. The standards also encompass related landscape features and the
building's site and environment, as well as attached, adjacent, or related new
construction. To be certified, a Rehabilitation project must be determined by
the AHPP to be consistent with the historic character of the structure(s) and,
where applicable, the district in which it is located.
B. The following standards are to be applied
to specific Rehabilitation projects in a reasonable manner, taking into
consideration economic and technical feasibility:
1. A property shall be used for its historic
purpose or be placed in a new use that requires minimal change to the defining
characteristics of the building and its site and environment.
2. The historic character of a property shall
be retained and preserved. The removal of historic materials or alteration of
features and spaces that characterize a property shall be avoided.
3. Each property shall be recognized as a
physical record of its time, place, and use. Changes that create a false sense
of historical development, such as adding conjectural features or architectural
elements from other buildings, shall not be undertaken.
4. Most properties change over time. Those
changes that have acquired historic significance in their own right shall be
retained and preserved.
5.
Distinctive features, finishes, and construction techniques or examples of
craftsmanship that characterize a historic property shall be
preserved.
6. Deteriorated historic
features shall be repaired rather than replaced. Where the severity of
deterioration requires replacement of a distinctive feature, the new feature
shall match the old in design, color, texture, and other visual qualities and,
where possible, materials. Replacement of missing features shall be
substantiated by documentary, physical, or pictorial evidence.
7. Chemical or physical treatments, such as
sandblasting, that cause damage to historic materials shall not be used. The
surface cleaning of structures, if appropriate, shall be undertaken using the
gentlest means possible.
8.
Significant archeological resources affected by a project shall be protected
and preserved. If such resources must be disturbed, mitigation measures shall
be undertaken.
9. New additions,
exterior alterations, or related new construction shall not destroy historic
materials that characterize the property. The new work shall be differentiated
from the old work and shall be compatible with the massing, size, scale, and
architectural features to protect the historic integrity of the property and
its environment.
10. New additions
and adjacent or related new construction shall be undertaken in such a manner
that if removed in the future, the essential form and integrity of the historic
property and its environment would be unimpaired.
C. The quality of materials and craftsmanship
used in a Rehabilitation project must be commensurate with the quality of
materials and craftsmanship of the historic building in question. Certain
treatments, if improperly applied, or certain materials by their physical
properties, may cause or accelerate physical deterioration of historic
buildings. Inappropriate physical treatments include, but are not limited to:
improper repointing techniques; improper exterior masonry cleaning methods; or
improper introduction of insulation where damage to historic fabric would
result. In almost all situations, use of these materials and treatments will
result in denial of a Certification of Completion. Similarly, exterior
additions, that duplicate the form, material, and detailing of the structure to
the extent that they compromise the historic character of the structure, will
result in denial. For further information on appropriate and inappropriate
Rehabilitation treatments, Owners are to consult the Guidelines for
Rehabilitating Historic Buildings published by the U.S. National Park Service
(see
https://www.nps.gov/tps/standards/rehabilitation/rehab/guide.htm).
Technical information to help property Owners formulate plans for the
Rehabilitation, preservation, and continued use of historic properties
consistent with the intent of the Secretary's Standards is available from the
AHPP. Owners are responsible for procuring this material as part of planning
for a Rehabilitation project.
D. In
certain limited cases, it may be necessary to dismantle and rebuild portions of
an Eligible Property to stabilize and repair weakened structural members and
systems. In such cases, the AHPP will consider such extreme intervention if:
1. The necessity for dismantling is justified
in supporting documentation;
2.
Significant architectural features and overall design are retained;
and
3. Adequate historic materials
are retained to maintain the architectural and historic integrity of the
overall structure. Owners are cautioned that the standards for rehabilitation
require retention of distinguishing historic materials of external and internal
walls as well as structural systems. In limited instances, Rehabilitations
involving removal of existing external walls, (i.e., external walls that
detract from the historic character of the structure such as in the case of a
non-significant later addition or walls that have lost their structural
integrity due to deterioration) may be certified as meeting the Secretary's
Standards.
E. Prior
approval of a project by other state, federal, or local agencies or
organizations does not ensure certification by the AHPP for tax purposes. The
Secretary's Standards take precedence over other regulations and codes in
determining whether the Rehabilitation project is consistent with the historic
character of the property and, where applicable, the district in which it is
located.
F. The qualities of a
structure and its environment which qualify it as an Eligible Property are
determined taking into account all available information, including information
derived from the physical and architectural attributes of the building; such
determinations are not limited to information contained in National Register or
related documentation.
XII. CERTIFICATION OF COMPLETION (Part 4
Application)
A. Upon completion of a
Rehabilitation project and successful Part 1, Part 2, and Part 3 Applications,
the Owner shall submit documentation required by the AHPP to verify that the
completed Rehabilitation qualifies as a Certified Rehabilitation.
1. The Owner shall certify to the AHPP the
validity of costs and expenses claimed as Qualified Rehabilitation Expenses and
shall maintain a record supporting the claim for at least five (5) years after
the issuance of the Certification of Completion.
2. An Owner's record supporting a claim for
Qualified Rehabilitation Expenses may be reviewed by the AHPP, the appropriate
tax collection authority, or a Holder.
B. If the AHPP determines that a completed
Rehabilitation project qualifies as a Certified Rehabilitation and that the
Certified Rehabilitation is complete, the AHPP shall issue a freely
transferable certificate of completion specifying the total amount of the
Qualified Rehabilitation Expenses and Arkansas Major Historic Rehabilitation
Income Tax Credit allowed. Accordingly:
1. The
Arkansas Major Historic Rehabilitation income Tax Credit allowed shall be an
amount equal to twenty-five percent (25%) of the total Qualified Rehabilitation
Expenses incurred by the Owner to complete the Certified
Rehabilitation.
2. The Division of
Arkansas Heritage shall not issue Arkansas Major Historic Rehabilitation Income
Tax Credits for more than the amount certified under $
19-5-1150(c) (1)
(A) or for an amount greater than the Funding
Reservation Award with accepted amendments.
a.
Any unused tax credits shall not be carried over to the following fiscal year
for use by the AHPP or the Division of Arkansas Heritage.
b. Any Certification of Completion that would
cause the Arkansas Major Historic Rehabilitation Income Tax Credit to exceed
the amounts listed above during the fiscal year will be carried forward for
consideration during the following fiscal year.
3. The Arkansas Major Historic Rehabilitation
Income Tax Credit shall be available to an Owner of an Eligible Property that:
a. Completes a Certified Rehabilitation that
is placed in service after January 1, 2019;
b. Has a minimum investment of one million
five hundred thousand dollars ($1,500,000) in Qualified Rehabilitation
Expenses; and
c. Is not receiving a
tax credit under any other state law for the same Eligible Property.
d. Has completed and been approved Part 1,
Part 2, and Part 3 of the Application.
C. Upon issuance of a certificate of
completion, the AHPP will notify the appropriate tax authority within fifteen
(15) business days.
XIII. CLAIMING CREDIT/TRANSFERRING CREDIT
A.
1. A
Holder shall submit the certificate of completion and documents proving an
assignment, if any, with the appropriate tax collection authority at the time
of filing the Holder's income tax return or Premium Tax return.
2. The appropriate tax collection authority
may refuse to recognize the Arkansas Major Historic Rehabilitation Income Tax
Credit claimed if the Holder fails to submit the Certification of Completion
and any assignment documents.
B. The amount of the Arkansas Major Historic
Rehabilitation Income Tax Credit that may be used by a Holder for a taxable
year may equal but shall not exceed the amount of income tax or Premium Tax
due.
C. A Holder of an unused
Arkansas Major Historic Rehabilitation Income Tax Credit may carry forward part
or all of an Arkansas Major Historic Rehabilitation Income Tax Credit for five
(5) consecutive taxable years to apply against the Holder's income taxes due or
the Holder's Premium Tax due. The credit will be forfeited after the fifth tax
year from the date of issue of the certificate.
D.
1. An
Owner of an Arkansas Major Historic Rehabilitation Income Tax Credit may freely
transfer, sell, or assign part or all of the Arkansas Major Historic
Rehabilitation Income Tax Credit amount identified in the Certification of
Completion.
2. A subsequent Holder
may transfer, sell, or assign part or all of the remaining Arkansas Major
Historic Rehabilitation Income Tax Credit.
E. An Owner may sell the Owner's Eligible
Property after the issuance of the Certification of Completion.
F. An Arkansas Major Historic Rehabilitation
Income Tax Credit granted to a partnership, Subchapter S corporation, a limited
liability company taxed as a partnership, or multiple Owners of property shall
be passed through to the partners, members, or Owners respectively on a pro
rata basis or pursuant to an executed agreement among the partners, members, or
Owners documenting an alternate distribution method.
G.
1. A
Holder may use the Arkansas Major Historic Rehabilitation Income Tax Credit to
offset up to one hundred percent (100%) of the state income taxes due or
Premium Tax due from the Holder.
2.
A Holder is not required to have any ownership or other interest in the
Eligible Property for which an Arkansas Major Historic Rehabilitation Income
Tax Credit is claimed.
3. An
Arkansas Major Historic Rehabilitation Income Tax Credit may be used up to its
total amount by any Holder without limitation and is not subject to limits
imposed by federal law or regulation on the use of Federal Rehabilitation Tax
Credits.
H. An Owner or
Holder that assigns part or all of an Arkansas Major Historic Rehabilitation
Income Tax Credit shall perfect the transfer by notifying the Division of
Arkansas Heritage and the appropriate tax collection authority in writing
within thirty (30) calendar days following the effective date of the transfer
and shall provide any information as may be required by the Division of
Arkansas Heritage and the appropriate tax collection authority to administer
and carry out the Act and to ensure proper tracking of the ownership of the
unused Arkansas Major Historic Rehabilitation Income Tax Credit.
I.
1. Any
consideration received for the transfer of an Arkansas Major Historic
Rehabilitation Income Tax Credit shall not be deducted from income taxable by
the State of Arkansas.
2. Any
consideration paid for the transfer of an Arkansas Major Historic
Rehabilitation Income Tax Credit shall not be included as income taxable by the
State of Arkansas.
XIV. FEES
A.
The fee for review of a proposed Rehabilitation project (Part 2) is fifty
dollars ($50). This initial review fee is non-refundable and is due upon
submission of a Proposed Rehabilitation Project (Part 2).
B. The fees for reviewing Completed
Rehabilitation Projects (Part 4) for an income-producing property are based on
the dollar amount of the costs attributed solely to the Qualified
Rehabilitation Expenses on the eligible structure, in accordance with the
schedule below.
Fee Size of Rehabilitation
$400 review fee for $1,500,000 or more
1. The initial fee of $50 will be deducted
from these fees.
2. The balance
shall be paid by the applicant upon submission of the Part 4
Application.
3. No Certification of
Completion shall be issued until the balance due has been paid.
4. No Certification of Completion shall be
issued until the pending Eligible Property has officially been placed on the
National Register, individually or as a contributing structure in a National
Register Historic District.
C. The fee for perfecting the transfer of an
unused tax credit, in whole or in part, is seventy-five hundredths percent
(0.75%) of the amount of tax credit to be transferred.
D. All fees collected will be deposited into
the AHPP's cash funds and may be used for the administration of the Act or as
directed by the AHPP Director.
XV. APPEALS
Except as otherwise provided herein, an Owner may appeal any
decision or action of the State Historic Preservation Officer.
A. An Owner appealing the AHPP's
determination of eligibility for listing on the National Register of Historic
Places (Part 1 Application) may appeal to the National Park Service, in
accordance with the procedures set forth in 36 CFR part 60 et seq. The State
Historic Preservation Officer will consider the determination from the National
Park Service to be final.
B. An
appeal by the Owner may be made from any of the certifications or any decisions
made pursuant to the Act. Such appeals must be in writing and received by the
State Historic Preservation Officer within 30 calendar days of receipt of the
decision which is the subject of the appeal. The appellant may request an
opportunity for a meeting to discuss the appeal, but all information the Owner
wishes to be considered must be submitted in writing.
1. The State Historic Preservation Officer
will convene the Rehabilitation Tax Credit Appeals Committee with 30 calendar
days of an Owner's request for an appeal. The committee will be comprised of
the State Historic Preservation Officer or his/her designee, two members of the
State Review Committee for Historic Preservation, the AHPP director, and the
AHPP Federal Programs Manager.
2.
The committee will consider the record of the decision in question, any further
written submissions by the Owner, and other available information. The
committee will decide by majority vote whether the Application for a
Certification of Completion should be approved and shall provide the appellant
a written decision as promptly as circumstances permit.
3. The committee's decision constitutes an
administrative review of the decision appealed and will not be conducted as an
adjudicative proceeding.
