DEPARTMENT OF ARKANSAS HERITAGE ARKANSAS HISTORIC
PRESERVATION PROGRAM
RULES GOVERNING THE ARKANSAS HISTORIC REHABILITATION
INCOME TAX CREDIT PROGRAM
I.
PURPOSE
Arkansas's historic sites and districts provide the state with
significant benefits in the areas of community and economic development,
tourism, civic pride, and an overall sense of place for Arkansas. Yet Arkansas
continues to experience significant loss of historic structures. Since the
overwhelming majority of historic properties are held by private owners, the
state has developed this program to encourage these owners to restore and
rehabilitate historic structures.
II.
LEGISLATION
Arkansas Code Annotated §
26-51-2201
et seq. (Act 498 of 2009), the "Arkansas Historic
Rehabilitation Income Tax Credit of 2009", allows a credit against the tax
imposed by the Arkansas Income Tax Act of 1929, (§
26-51-101 et
seq.) and the premium tax levied under §§
26-57-603 -
26-57-605
for any taxpayer engaged in the qualified rehabilitation of certified historic
structures.
III.
DEFINITIONS
As used herein, unless the context otherwise requires:
Act means the Arkansas Historic
Rehabilitation Income Tax Credit of 2009 (A.C.A. §
26-51-2201
et seq.).
Tax credits means the authorized
amount that may be applied against Arkansas personal income tax, corporate
income tax or premium tax, whether earned by an individual, partnership,
limited liability company, S Corporation or Corporation.
AHPP means the Arkansas Historic
Preservation Program ("AHPP"), an agency of the Department of Arkansas Heritage
("DAH").
Application means the Arkansas
Historic Rehabilitation Tax Credit Application, and constitutes a written plan
for development and operation of a rehabilitation project. Applications are
submitted in three parts:
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.
Proposed Rehabilitation Project (Part 2)
is used by AHPP to determine whether a proposed rehabilitation project
will comply with the Secretary's Standards for Rehabilitation.
Completed Rehabilitation Project (Part
3) is used by AHPP to determine whether a completed rehabilitation
project successfully complied with the Secretary's Standards for
Rehabilitation. Upon approval of a Part 3, the AHPP will issue a
Certificate of Completion. Holders will submit
Certificates of Completion to the appropriate taxing authority to claim tax
credits.
Eligible property means property
that is located in Arkansas that is:
A.
Income-producing property that:
1. Qualifies
as a certified historic structure under
26 U.S.C. §
47, as it existed on January 1, 2009;
or
2. Will qualify as a certified
historic structure following certified rehabilitation; and
B. Non-income-producing property that is:
1. Listed in the National Register of
Historic Places;
2. Designated as
contributing to a district listed in the National Register of Historic Places;
or
3. Eligible for designation as
contributing to a district listed in the National Register of Historic Places
following certified rehabilitation.
For purposes of the certification decisions set forth in this
part, an eligible property encompasses the historic building and its site,
landscape features, and environment. The National Park Service's decision to
list a property in the National Register of Historic Places, including boundary
determinations, does not limit the scope of review of the rehabilitation
project for tax certification purposes. Such review will include the entire
historic property as it existed prior to rehabilitation and any related new
construction.
Income-producing property means
nonresidential real property and residential rental property, as defined by the
US Internal Revenue Code, Section 168. For the purpose of this Act,
income-producing property includes properties to be
rehabilitated for resale as condominium units.
Non-income-producing property
means residential real property, as defined by the US Internal
Revenue Code, Section 168.
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.
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.)
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.
Certified rehabilitation means a
substantial rehabilitation of an eligible property, consistent with the
historic character of the eligible property and, where applicable, with the
district in which such structure is located.
Qualified rehabilitation expenses
means costs and expenses incurred to complete a certified
rehabilitation in accordance with the Standards for Rehabilitation, as
determined by the AHPP.
Standards for Rehabilitation
means the United State Secretary of the Interior's Standards
for Rehabilitation.
Owner means a person or an entity
that owns eligible property and is the initial recipient of the certification
of completion from the Department of Arkansas Heritage. An owner can be an
individual, partnership, limited liability company, Corporation, or public
agency holding a fee-simple interest in a property, or any other person or
entity recognized for purposes of the applicable tax benefits.
Holder means the holder of a
certification of completion that is:
A. A person, firm, or corporation subject to
the income tax imposed by the Income Tax Act of 1929, §
26-51-101 et
seq.;
B. An insurance company
paying the premium tax levied under §§
26-57-603 -
26-57-605
on its gross premium receipts.
State Historic Preservation Officer (SHPO)
means the Director of the Department 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 a
property designed to attract at least 25% of its visitors from out-of-state.
Tourism attraction does NOT include:
A. Retail sales facilities (unless the goods
are created on-site or if sales are incidental to the overall
property);
B. Facilities not open
to the general public;
C.
Facilities not likely to attract overnight guests from outside the state who
would stay in commercial lodging near the attraction;
D. Facilities owned by the State of Arkansas
or its political subdivisions;
E.
Gambling facilities (unless for approved pari-mutuel racing currently regulated
under Arkansas Code);
F. Lodging
facilities, unless it meets the following tests:
1. It must constitute a portion of a larger
tourism attraction project and represent less than sixty percent (60%) of the
total approved costs of the tourism attraction project; or
2. If the approved cost for the lodging
facility exceeds $5,000,000 and one of the following is met:
a. The lodging facility is attached to a
convention center containing a minimum of seventy-five thousand (75,000) square
feet, or
b. The lodging facility
contains a minimum of twelve thousand (12,000) square feet of meeting or
exhibit space.
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 Department of Finance and
Administration and Insurance Department are responsible for all procedures,
legal determinations, and rules and regulations concerning the tax consequences
relating to the Act. Upon satisfactory completion of an eligible project, the
State Historic Preservation Officer will transmit a signed certification of
project completion and credit eligibility to the Department of Finance and
Administration and the Insurance Department. Any certification made by the
State Historic Preservation Officer pursuant to the Act or these rules shall
not be considered as binding upon the Department of Finance and Administration
and 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 described below. If
an application for an evaluation of significance or rehabilitation project is
made by someone other than the fee simple owner, however, the application must
be accompanied by a written statement from the fee simple owner indicating that
he or she 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 or not a particular structure
qualifies as an eligible property. The AHPP shall do so, however, only after
notifying the fee simple owner of record of the request, informing such owner
of the possible tax consequences of such a decision, and permitting the
property 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 fee simple
owner.
3. Owners of properties
which appear to meet National Register criteria but are not yet listed in the
National Register or which are located within potential historic districts may
request preliminary determinations 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 significance of registered historic districts.
Procedures for obtaining these determinations shall be the same as those
described above. Such determinations are preliminary only and are not binding
on the AHPP. Preliminary determinations of significance will become final as of
the date of the listing of the individual property or district in the National
Register. For properties outside the period or area of significance of a
registered historic district, preliminary determinations of significance will
become final, except as provided below, when the district documentation on file
with the NPS is formally amended. If during review of a request for
certification of rehabilitation, it is determined that the property does not
contribute to the significance of the district because of changes which
occurred after the preliminary determination of 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 or not
rehabilitation proposals meet the Secretary's Standards for Rehabilitation.
Such determinations will be made only when the owner has requested a
preliminary determination of the 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.
B. How to
apply:
1. Requests for certifications of
eligibility and of rehabilitation shall be made on Historic Preservation
Certification Applications. Part 1 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 makes contact with 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 in 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 property owner has
objected to the listing of the property in the National Register.
VI.
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 significance
of such district.
B. To
determine whether or not 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
owner;
2. Name and address of
property;
3. Name of historic
district;
4. Current photographs of
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
significance;
5. Brief description
of appearance including alterations, distinctive features and spaces, and
date(s) of construction;
6. Brief
statement of 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 property's location within the district; and
8. Signature of fee simple 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
certified historic structure and no further certification is required, with the
following exception:
1. If the property is
individually listed in the National Register and the owner believes it has lost
the characteristics which caused it to be nominated and therefore wishes it
delisted, the owner should refer to the delisting procedures outlined in 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 which 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
significance of that district. An application for a preliminary determination
for a property in a historic district which is outside the period of
significance in the district documentation on file with the AHPP must document
and justify the expanded significance of the district and how the property
contributes to the significance of the district or document the individual
significance of the property. Applications must contain substantially the same
level of documentation as National Register nominations, as specified in 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 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.
1. Documentation must be submitted that
demonstrates:
a. The effect of the move on the
building's integrity and appearance (any proposed demolition, proposed changes
in foundations, etc.);
b.
Photographs of the site and general environment of the proposed site;
c. Evidence that the proposed site does not
possess historical significance that would be adversely affected by the moved
building;
d. The effect of the move
on the distinctive historical and visual character of the district, where
applicable; and
e. The method to be
used for moving the building.
2. For buildings individually listed in the
National Register, the procedures contained in 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.
3. 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 of the Interior's Standards for
Evaluating Significance within Historic Districts (listed below).
J. Once the 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.
VII.
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. 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 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 to 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 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.
C. Where
rehabilitation credits are sought, certifications of eligibility will be made
on the appearance and condition of the property before rehabilitation was
begun.
D. 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 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.
VIII.
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 or color digital accepted) 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 approval from the
AHPP do so strictly at their own financial risk. Failure to secure
approval of Part 2 could result in unapproved work having to be redone or in
the destruction of historic fabric that could preclude eligibility for the
credit and/or National Register listing. 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 for
Rehabilitation 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 3) and provide the
project completion date and a signed statement that the completed
rehabilitation project meets the Secretary's Standards for Rehabilitation and
is consistent with the work described in Part 2 of the Historic Preservation
Certification Application. Also required in requesting certificate 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 circumstance 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 project 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.
Some eligible properties may encompass more than one structure (such as a mill
complex or a residence and carriage house). For a proposed rehabilitation
project involving more than one structure, as indicated on the Part 2
application, the decision on a certificate of completion will be based on the
merits of the overall project rather than for each structure or individual
component.
For a proposed rehabilitation project on an individual
structure, the decision on a certificate of completeness will be based on the
merits of the work on that particular structure, regardless of its historical
or functional relationship to other structures located on the eligible
property. However, AHPP may deny a certificate of completion for the structure
in question if inappropriate work is undertaken on other structures located on
the property that would result in the property's removal from or ineligibility
for the National Register.
5. Demolition of a building as part of a
rehabilitation project involving multiple buildings may result in denial of a
certificate 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 certificate 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
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 certificate 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 Standards for
Rehabilitation. If the project does not meet the Standards for Rehabilitation,
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 Standards. The AHPP will notify the owner
in writing whether the revised project continues to meet the 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
Standards for Rehabilitation. The AHPP may deny a certificate 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 Standards for Rehabilitation, an
explanatory letter will be sent to the owner by the AHPP. A rehabilitated
property not in conformance with the Standards for Rehabilitation 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
US Department of the Interior regulations.
G. All rehabilitation projects receiving tax
credits must address one or more of the following program priorities.
Applications should indicate which of these priorities their project addresses
when submitting the Part 2 application. In rank order from highest to lowest,
those priorities are:
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
IX.
Standards for
Rehabilitation
A. The
following Standards for Rehabilitation 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 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 certificate 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 National Park Service. 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 for Rehabilitation 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
Standards for Rehabilitation.
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 for
Rehabilitation 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.
X.
Certificates of
Completion (Part 3 Application)
A. Upon completion of a rehabilitation
project, 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 historic rehabilitation income
tax credit allowed.
1. The 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 up to the first:
a. Five
hundred thousand dollars ($500,000) of qualified rehabilitation expenses on an
income-producing property; or
b.
One-hundred thousand dollars ($100,000) of qualified rehabilitation expenses on
a non-income-producing property.
2. The AHPP shall only issue Certificates of
Completion allowing tax credits for up to four million dollars ($4,000,000) in
any one (1) fiscal year.
a. Any unused tax
credits shall not be carried over to the following fiscal year for use by the
AHPP or the Department of Arkansas Heritage.
b. Any certification of completion that would
cause the Arkansas 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.
C. Upon issuance of a Certificate of
Completion, the AHPP will notify the appropriate tax authority within fifteen
(15) business days.
XI.
Transfer of Credits
A. An owner of an Arkansas historic
rehabilitation income tax credit may freely transfer, sell, or assign all or
part of the tax credit amount identified in the Certificate of Completion. A
subsequent holder may also transfer, sell, or assign all or part of the
remaining tax credit.
B. An owner
or holder that assigns part or all of a tax credit shall perfect the transfer
by notifying the AHPP 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 AHPP and the
appropriate tax collection authority to ensure proper tracking of the ownership
of the unused Arkansas historic rehabilitation income tax credit.
XII.
FEES
A. The
fee for review of a Proposed Rehabilitation Projects (Part 2) is fifty dollars
($50). This initial review fee is non-refundable.
B. The fee for review of a Completed
Rehabilitation Projects (Part 3) for a non-income-producing property is one
hundred fifty dollars ($150).
C.
The fees for reviewing Completed Rehabilitation Projects (Part 3) 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
|
$150
|
$25,000 to $99,999
|
$400
|
$100,000 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 3 application.
3. No Certificate of Completion shall be
issued until the balance due has been paid.
D. 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.
E. All fees collected will be deposited into
the AHPP's cash funds and may be used for the administration of the
Act.
XIII.
APPEALS
Except as otherwise provided herein, a taxpayer 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
Certificate of Completion should be approved and shall provide the appellant a
written decision as promptly as circumstances permit.
4. The committee's decision constitutes an
administrative review of the decision appealed and will not be conducted as an
adjudicative proceeding.