300 KAR 6:010. Historic rehabilitation
tax credit certifications.
RELATES
TO: KRS 171.396, 171.3961, 171.397, 16 U.S.C. 470a(a)(1), 36 C.F.R. 60, 67, 42
U.S.C. 12101
STATUTORY
AUTHORITY: KRS 171.397(12), (14)
NECESSITY,
FUNCTION, AND CONFORMITY: KRS 171.397(12) and (14) authorizes the Kentucky
Heritage Council to promulgate administrative regulations to implement the
certified historic structures rehabilitation tax credit and to impose fees for
tax credit applications. This administrative regulation establishes the application
process to determine a taxpayer’s eligibility to claim a certified historic
structure rehabilitation tax credit.
Section
1. Definitions. (1) "Act" means the enabling legislation for the
historic rehabilitation tax credit, KRS 171.396 to 171.397.
(2)
"Adjusted basis of the structure" means the
purchase price of the property, minus the cost of land, plus improvements
already made, minus allowable depreciation.
(3)
"Certified historic structure" is defined by KRS 171.396(1).
(4)
"Certified rehabilitation" is defined by KRS 171.396(2).
(5)
"Certified rehabilitation credit cap" is defined by KRS 171.396(3).
(6)
"Completed rehabilitation project" means any
certified historic structure which has been substantially rehabilitated and,
after the completion date, has been submitted by the applicant to the council
for final certification of rehabilitation under the Act.
(7)
"Completion date" means:
(a)
For owner-occupied residential property, the month, date, and year in which the
last eligible rehabilitation expense is incurred; or
(b)
For all other property, the month, date, and year when the rehabilitation
project is completed to allow occupancy of the entire building or some
identifiable portion of the building and, if applicable, a certificate of occupancy
has been issued.
(8)
"Department" means the Kentucky Department of Revenue.
(9)
"Director" means the executive director of the Kentucky Heritage
Council.
(10)
"Disqualifying work" is defined by KRS 171.396(5).
(11)
"Exempt entity" is defined by KRS 171.396(6).
(12)
"File" or "filed" means physical receipt by the council of
an application for certification along with the tender of the appropriate review
fee.
(13)
"Final amount of credit approved" means the individual credit awarded
for certified rehabilitation to an owner of a certified historic structure as
determined pursuant to KRS 171.397 or KRS 171.3961, whichever is applicable,
when the Certificate of Rehabilitation-Part 3 is filed and approved by the
council.
(14)
"Inspection" means a visit by the director or an authorized
representative of the council to a property for the purposes of reviewing and
evaluating the significance of the structure and the ongoing or completed
rehabilitation work.
(15)
"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 that the U. S.
Secretary of the Interior is authorized to expand and maintain pursuant to
Section 101(a)(1) of the National Historic Preservation Act of 1966, 16 U.S.C.
470a(a)(1), and implemented through 36 C.F.R. Part 60.
(16)
"Owner" means:
(a)
The person, partnership, corporation, public agency, or other entity holding a
fee simple interest in a property, or any other person or entity recognized by
the department for purposes of the applicable tax benefit under KRS 171.397 or
KRS 171.3961, whichever is applicable; or
(b)
A lessee, if the remaining term of the lease is not less than twenty-seven and
one-half (27 1/2) years for residential property or thirty-nine (39) years for
all other property.
(17)
"Owner-occupied residential property" is defined by KRS 171.396(8).
(18)
"Preliminary tax credit allocation" means the maximum individual
credit available for certified rehabilitation to an owner of a certified historic
structure as determined pursuant to KRS 171.397, on June 30 of the year in
which the Certificate of Rehabilitation-Parts 1 and 2 are filed and approved by
the council.
(19)
"Property" means a building and its site and landscape features.
(20)
"Qualified rehabilitation expense" is defined by KRS 171.396(9).
(21)
"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 as determined by the director.
(22)
"Rehabilitation plan" means a plan pursuant to which a certified
historic structure will be substantially rehabilitated.
(23)
"Rehabilitation project" means any certified historic structure,
submitted by the applicant to the council, for certifications of rehabilitation
under the Act.
(24)
"Standards for rehabilitation" mean the Secretary of the Interior’s
Standards for Rehabilitation, 36 C.F.R. 67.7, as established by the U. S.
Department of Interior and restated in Section 4(2) of this administrative
regulation.
(25)
"Starting date" means the date upon which the applicant applies for
the building permit for work proposed by the rehabilitation plan or the date
upon which actual physical work contemplated by the plan of rehabilitation
begins.
(26)
"Substantial rehabilitation" is defined by KRS 171.396(10).
(27)
"Taxpayer" is defined by KRS 171.396(11).
Section
2. Certifications of Rehabilitation. (1) For tax credits under KRS 171.3961, a
request for certification of historic significance and of rehabilitation under
the Act shall be a five (5) stage process that requires the filing of the
following forms:
(a)
Certification Application-Intent to Apply for Expanded Credit;
(b)
Certification Application Part 1-Evaluation of National Register Status;
(c)
Certification Application Part 2-Description of Rehabilitation;
(d)
Certification Application Part 3-Request for Certification of Completed Work;
and
(e)
Certification Application-Summary of Investment and Election of Credit.
(2)
For tax credits under KRS 171.397, a request for certification of historic
significance and of rehabilitation under the Act shall be a four (4) stage
process that requires the filing of the following forms:
(a)
Certification Application Part 1-Evaluation of National Register Status;
(b)
Certification Application Part 2-Description of Rehabilitation;
(c)
Certification Application Part 3-Request for Certification of Completed Work;
and
(d)
Certification Application-Summary of Investment and Election of Credit.
(3)
Intent to Apply for Expanded Credit shall be a request for certification of an
applicant’s intent to claim a tax credit established by KRS 171.3961 for a
proposed rehabilitation project.
(4)
Part 1 shall be a request for certification of historic significance.
(5)
Part 2 shall be a request for certification of a proposed rehabilitation
project.
(6)
Part 3 shall be a request for certification of a completed rehabilitation
project.
(7)
Summary of Investment and Election of Credit shall be actual cost, square
footage, and use attributed to the rehabilitation work and an irrevocable
election by the taxpayer to receive a refundable credit or transfer the credit.
(8)
Certification of applications shall be filed with the council as follows:
(a)1.
Part 1 and Part 2 shall be filed with the council on or before April 29 for a
preliminary determination of maximum credit eligibility for a credit under KRS
171.397.
2.
Part 1, Part 2, and Intent to Apply for Expanded Credit shall be filed with the
council on or before June 30, 2015, for a credit under KRS 171.3961.
(b)
Part 1 and Part 2 may be filed after rehabilitation has commenced, but an applicant
who begins rehabilitation prior to receiving Part 2 certification assumes the
risk that certification may be denied.
(c)
Part 3 and Summary of Investment and Election of Credit shall be filed with the
council after the completion date of a completed rehabilitation project for a
final determination of credit.
(9) If at any stage an application is not approved by the
council, the rehabilitation project shall not qualify as a certified rehabilitation
for purposes of the Act.
Section
3. Certifications of Historic Significance-Part 1. (1) Application. The
Certification Application Part 1-Evaluation of National Register Status form
shall be timely filed with the council for certification of historic significance.
(a)
Property individually listed in the National Register of Historic Places.
Individually listed property shall be considered certified a historic structure
for purposes of the Act subject to confirmation by the council. The following
information shall be provided by the applicant:
1.
Names and mailing addresses of owners;
2.
Name and address of property;
3.
Photographic documentation of the building and property prior to and after
alteration, showing exterior and interior features and spaces to insure that
the listed property has not lost the characteristics which caused it to be
listed on the National Register of Historic Places;
4.
Descriptions of all the buildings within the listing if the property contains
more than one (1) building for the purpose of determining which of the
buildings are of historic significance to the property;
5.
Brief description of appearance including alterations, distinctive features and
spaces, and dates of construction;
6.
Brief statement of significance summarizing how the property reflects the
values that give its distinctive historical and visual character, and explaining
any significance attached to the property itself;
7.
A copy of a map indicating where the subject property is located. If an
individually-listed property is also located in a historic district listed in
the National Register of Historic Places, a copy of the map of the National
Register historic district where the subject property is located and a clear
delineation of the property’s location within the district shall also be
included; and
8.
Signatures of owners requesting confirmation of listing in the National
Register of Historic Places or concurring in the request if the owners are not
the applicants.
(b)
Property located in a historic district listed in the National Register of
Historic Places. An applicant shall request that the property be certified by
the council as a historic structure contributing to the significance of a
historic district. The following information shall be provided:
1.
Names and mailing addresses of owners;
2.
Name and address of property;
3.
Name of historic district;
4.
Photographic documentation of the building and property prior to and after
alteration, showing exterior and interior features and spaces, and photographic
documentation of adjacent properties and structures on the street showing
significance to the historic district;
5.
Brief description of appearance including alterations, distinctive features and
spaces, and dates of construction;
6.
Brief statement of significance summarizing how the property reflects the
values that give the district its distinctive historical and visual character,
and explaining any significance attached to the property itself;
7.
A copy of the map of the National Register historic district where the subject
property is located and a clear delineation of the property’s location within
the district; and
8.
Signatures of owners requesting certification or concurring in the request if
the owners are not the applicants.
(2)
Multiple structures. A property containing more than one (1) building shall be
treated as a single certified historic structure if the council determines that
the buildings have been functionally-related historically to serve an overall
purpose, whether the property is individually listed in the National Register
or is located within a registered historic district. Buildings that are
functionally related historically shall be those which have functioned together
to serve an overall purpose during the property’s period of significance.
(3)
Standards for evaluating significance.
(a)
In addition to the existing National Register documentation, an application for
certification of historic significance shall contain documentation with information
about the significance of the specific buildings and structures.
(b)
A property located within a historic district listed in the National Register
of Historic Places shall be evaluated for contribution to the historic
significance of the district by applying the following standards:
1.
A property contributing to the historic significance of a district shall be a
property 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 property not contributing to the historic significance of a district shall be
a property which does not add to the district’s sense of time and place and historical
development; or where the location design, setting, materials, workmanship,
feeling and association have been so altered or have so deteriorated that the
overall integrity of the property has been irretrievably lost; and
3.
If the building was built within the past fifty (50) years, it shall not be
considered to contribute to the significance of a district, unless a strong
justification concerning its historical or architectural merit is given or the
historical attributes of the district are considered to be less than fifty (50)
years old.
(c)
An evaluation of historic significance shall be made based upon the appearance
and condition of the property before rehabilitation was begun.
(d)
The qualities of a property and its environment which qualify it as a certified
historic structure shall be determined taking into account all available
information, including information derived from the physical and architectural
attributes of the building, and shall not be limited to information contained
in the National Register nomination reports.
(e)
If a nonhistoric surface material obscures a façade, it may be necessary to
remove the surface materials prior to requesting certification so that a
determination of significance can be made. After the material has been removed,
if the obscured façade has retained substantial historic integrity and the
property otherwise contributes to the historic district, it shall be determined
to be a certified historic structure.
(4)
Review of Part 1 Applications.
(a)
A complete and adequately-documented Certification Application Part
1-Evaluation of National Register Status form shall be reviewed by the council
to determine if the property contributes to the historic significance of the
district by applying the standards established in subsection (3) of this
section.
(b)
After consideration of the information contained in the application and other
available information, the council shall approve the application if:
1.
The property meets the standards for evaluating for significance established in
subsection (3) of this section; or
2.
The director confirms that the property is individually listed in the National
Register of Historic Places.
(5)
If the application is not adequate to complete the review, the council shall attempt
to notify the applicant by mail, telephone, or e-mail using the contact
information provided on the application. The applicant’s failure to respond may
result in denial of the application. The council’s notification or failure to
notify shall not constitute a waiver of a deficiency or an alteration of a time
limitation established under the Act.
(6)
An applicant shall notify the council of any substantial damage, alteration, or
changes to a property that occurs after issuance of a Certification of Part
1-Evaluation of National Register Status. The council may, upon thirty (30)
days written notice to the applicant, withdraw a certification of historic
significance and may seek to have the property removed from the National
Register under 36 C.F.R. 60.15.
Section
4. Certifications of Rehabilitation-Part 2. (1) Applications.
(a)
A Certificate of Application Part 2-Description of Rehabilitation form shall be
timely filed with the council for certification that a rehabilitation plan is a
substantial rehabilitation and meets the standards for rehabilitation
established in subsection (2) of this section.
(b)
A rehabilitation project shall be done according to a rehabilitation plan.
(c)
The burden shall be upon the applicant to supply sufficient information to the
council for a determination that the rehabilitation plan is a substantial
rehabilitation and meets the standards for rehabilitation.
(d)
An application shall include the following information:
1.
Names and mailing addresses of owners;
2.
Name and address of property;
3.
Designation of whether the application is for owner-occupied residential
property or other property;
4.
Information sufficient to establish the proposed use of the structure;
5.
The adjusted basis for the property if other than owner-occupied residential or
owned by an exempt entity;
6.
Proposed starting date and completion date;
7.
Projected qualified rehabilitation expenses;
8.
Numbered photographs adequate to document the appearance of the structure, both
on the interior and exterior, and its site and environment before
rehabilitation that correspond to numbered positions on existing plans;
9.
The taxpayer identification number or Social Security number;
10.
Written detailed description of existing features and their conditions, and a
written description of proposed rehabilitation work and the impact on existing
features;
11.
Plans for any attached, adjacent, or related new construction, if applicable;
and
12.
Signatures of owners requesting certification or concurring in the request if
the owners are not the applicant.
(2)
Standards for rehabilitation.
(a)
The standards for rehabilitation shall be the criteria used to determine if the
rehabilitation qualifies as a certified historic rehabilitation. Rehabilitation
shall be consistent with the historic character of the structure or structures
and, if applicable, the district in which it is located.
(b)
A rehabilitation project shall meet all of the standards for rehabilitation
established in this paragraph.
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. A change that creates a false sense of historical development, such as
adding a conjectural feature or architectural element from another building,
shall not be undertaken.
4.
Changes to the property 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 architectural features shall be repaired rather than replaced. If
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, if possible, materials. Replacement of missing architectural
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 these resources shall 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, craftsmanship, and related new construction in
rehabilitation shall match the quality of materials, craftsmanship, and design
of the historic structure in question. Certain treatments, if improperly
applied, or certain materials by their physical properties, may cause or
accelerate physical deterioration of historic buildings, and use of these
treatments or materials shall result in denial of certification. The burden
shall be upon the applicant to consult with the council for a determination as
to what rehabilitation measures are appropriate for the structure. Inappropriate
rehabilitation measures on historic properties shall include:
1.
Improper masonry repointing materials and techniques;
2.
Improper exterior masonry cleaning methods;
3.
Improper introduction of insulation if damage to historic fabric would result;
and
4.
Incompatible additions and new construction.
(d)
The council may consider the dismantling and rebuilding of a portion of a
certified historic structure to stabilize and repair weakened structural
members and systems as a certified historic rehabilitation 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.
(3)
Substantial rehabilitation. A rehabilitation project shall be a substantial
rehabilitation only if the requirements of KRS 171.396(9) and (10) are met. To
determine whether a rehabilitation project is a substantial rehabilitation, the
conditions established in this subsection shall apply.
(a)
Increases to the adjusted basis of the structure shall include capital
improvements to the structure, legal fees incurred for perfecting title, and
zoning costs. Any depreciation previously claimed for the structure shall be
subtracted from this figure.
(b)
If a cost only partially qualifies as an eligible rehabilitation expense
because some of the cost is attributable to the enlargement of the building,
the expenditures shall be apportioned proportionately between the original
portion of the building and the enlargement.
(c)
In addition to the expenses listed in KRS 171.396(9), qualified rehabilitation
expenses shall include:
1.
The cost of work done to structural components of the building within the
footprint of the historic structure if they are permanent;
2.
Costs related to new heating, plumbing, and electrical systems, as well as
expenses related to updating kitchens and bathrooms, compliance with the Americans with Disabilities Act of 1990 (42 U.S.C. 12101),
and fire suppression systems and fire escapes; and
3.
The cost of architectural and engineering fees, site survey fees, legal
expenses, development fees, and other construction-related costs, if those
costs are added to the basis of the property.
(d)
In addition to the exclusions listed in KRS 171.396(9), qualified
rehabilitation expenses shall not include the construction costs for a new
building, parking lot, or sidewalk.
(4)
Review of Part 2 Applications.
(a)
A complete and adequately documented Certification Application Part 2-
Description of Rehabilitation shall be reviewed by the council for a
determination that the rehabilitation plan is a substantial rehabilitation and
meets the standards for rehabilitation.
(b)
After consideration of the information contained in the application and other
available information, the council shall issue a preliminary certification of
rehabilitation if the rehabilitation plan is a substantial rehabilitation and
meets the standards for rehabilitation established in subsection (2) of this
section.
(5)(a)
If the application is not adequate to complete the review or if revisions to the rehabilitation project are necessary to
meet the standards of rehabilitation established in subsection (2) of
this section, the council shall attempt to notify the applicant by mail, telephone,
or e-mail using the contact information provided on the application.
(b)
An applicant's failure to respond may result in denial of the application.
(c)
The council’s notification or failure to notify shall not constitute a waiver
of a deficiency or an alteration of a time limitation established under the
Act.
(6)
Changes to rehabilitation plans. Once a rehabilitation
plan has been approved by the council, an applicant may only make substantive
changes in the work described in the application by:
(a) Filing a Certification
Application-Continuation/Amendment form with the council; and
(b) Receiving notification from the council that the
revised plan continues to meet the standards of rehabilitation established in
subsection (2) of this section and is a substantial rehabilitation.
Section
5. Certifications of Rehabilitation-Part 3 Completed Work. (1) Application.
Upon completion of a rehabilitation project, an applicant shall file a
Certification Application Part 3-Request for Certification of Completed Work
form with the council for final certification of rehabilitation. An application
shall include the following information:
(a)
Names and mailing addresses of owners;
(b)
Name and address of property;
(c)
Designation of whether the application is for owner-occupied residential
property or other property;
(d)
Actual starting date and completion date;
(e)
Actual qualified rehabilitation expenses;
(f)
Photographs adequate to document the appearance of the structure, both on the
interior and exterior, and its site and environment during and after
rehabilitation;
(g)
The taxpayer identification number or Social Security number; and
(h)
Signatures of owners or a representative authorized to sign on behalf of the
owner requesting certification.
(2)
Summary of Investment and Election of Credit. In addition to filing a
Certification Application Part 3-Request for Certification of Completed Work
form, the applicant shall file a Summary of Investment and Election of Credit
form with the council. The Summary of Investment and Election of Credit shall
include the following:
(a)
Names and mailing addresses of the owners;
(b)
Name and address of the property;
(c)
Actual costs attributed to the rehabilitation work;
(d)
Signatures of the owners or a representative authorized to sign on behalf of
the owner;
(e)
Notarization of the signatures if the property is an owner-occupied residence
or, for all other property, compilation by a certified
public accountant or equivalent of the actual costs attributed to the
rehabilitation of the historic structure; and
(f)
An irrevocable election by the taxpayer to:
1.
Use the credit, in which case, the credit shall be refundable; or
2.
Transfer the credit, pursuant to KRS 171.397(8).
(3) Scope of review.
(a)1.
Rehabilitation shall encompass all work on the interior and exterior of the
certified historic structure or structures and the site and environment, as
determined by the council, 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 certified historic structure.
2.
Conformance to the standards of rehabilitation established
in Section 4(2) of this administrative regulation shall be determined on the basis of application documentation and
other available information by evaluating the property as it existed prior to
the commencement of rehabilitation.
(b) A phased
rehabilitation project shall not be permitted. Each rehabilitation project
shall be self-contained, and completion of the rehabilitation project shall not
be contingent upon a phased rehabilitation to commence after receiving final
certification of rehabilitation.
(c)
Portions of a completed rehabilitation project that are not in conformance with
the standards for rehabilitation shall not be exempted, and may result in
denial of the Certification Application Part 3-Request for Certification of
Completed Work.
(4)
Review of Part 3 Applications. A complete and adequately-documented
Certification Application Part 3 - Request for Certification of Completed Work
shall be reviewed by the council for a determination that the completed
rehabilitation project is a certified rehabilitation and a determination of the
final amount of credit approved. The council shall issue a final certification
of rehabilitation if all the following requirements have been met:
(a)
All elements of the completed rehabilitation project meet the standards for
rehabilitation as established in Section 4(2) of this administrative
regulation;
(b) The completed rehabilitation project was a substantial
rehabilitation; and
(c)
Part 3 was filed with the council after the completion date.
(5)
If the application is not adequate to complete the review or if revisions to the rehabilitation project are necessary to
meet the standards of rehabilitation established in Section 4(2) of this
administrative regulation, the council shall attempt to notify the applicant by
mail, telephone, or e-mail using the contact information provided on the
application. Applicant’s failure to respond may result in denial of the
application. The council’s notification or failure to notify shall not
constitute a waiver or alteration of time limitations established under the
Act.
Section
6. Recapture of Preliminary Tax Credit Allocation For Credits Under KRS 171.397.
(1) Notice of Recapture. For tax credits under KRS 171.397, if an owner fails
to obtain a Certification of Completed Work within thirty-six (36) months from
the date of the taxpayer’s preliminary allocation of tax credit, the director
shall mail to the owner written notice of recapture of the preliminary tax
credit allocation.
(2)
Objection.
(a)
If the owner objects to the recapture of the preliminary allocation of tax
credit, the owner shall file written notice of objection accompanied by a
supporting statement setting forth grounds for objection within forty-five (45)
days of the date of the notice of recapture.
(b)
If the owner does not timely object, the preliminary tax credit allocation
shall be recaptured by the council and added to the certification
rehabilitation credit cap for the next calendar year, pursuant to KRS
171.397(2)(c).
(3)
Reinstatement. Within thirty (30) days of receipt of the owner’s notice of
objection, the council shall review the objection and determine if the owner
has provided reasonable grounds as established in subsection (5) of this section
to reinstate the preliminary allocation.
(a)
If the council determines that the preliminary tax credit allocation shall be
reinstated, the:
1.
Council shall give the owner written notice that the preliminary tax credit
allocation has been reinstated for an additional twenty-four (24) months;
2.
Owner shall pay a review fee for a Part 2 application in the amount established
in Section 10(2) and (3) of this administrative regulation, whichever is
applicable; and
3.
Owner shall obtain a Certification of Completed Work on or before the
expiration of twenty-four (24) months. If the owner fails to obtain a
Certification of Completed Work or fails to request an extension under subsection
(4) of this section, the council shall initiate recapture of the preliminary
tax credit allocation under the procedures established in this section.
(b)
If the council determines that the preliminary tax credit allocation shall not
be reinstated:
1.
The council shall give the owner written notice that the preliminary tax credit
allocation has not been reinstated;
2.
The owner shall be given thirty (30) days from the date of the notice that the
preliminary tax credit allocation has not been reinstated to file an appeal,
pursuant to Section 8 of this administrative regulation; and
3.
If the owner fails to file a timely appeal, pursuant to Section 8 of this
administrative regulation:
a.
The preliminary allocation shall not be reinstated;
b.
The preliminary tax credit allocation shall be recaptured by the council; and
c.
The preliminary tax credit allocation shall be added to the certification
rehabilitation credit cap for the next calendar year, pursuant to KRS
171.397(2)(c).
(4)
Extension of Preliminary Tax Credit Allocation. (a) At any time prior to
expiration of thirty-six (36) months from the date of the taxpayer’s
preliminary allocation of tax, an owner may request in writing that the
preliminary tax credit allocation be extended for a period of twenty-four (24)
months if the:
1.
Owner provides written documentation of reasonable grounds established in subsection
(5) of this section for an extension; and
2.
Owner pays a review fee for a Part 2 application in the amount established in
Section 10(2) and (3) of this administrative regulation, whichever is
applicable.
(b)
Prior to the expiration of the twenty-four (24) month extension, the owner may
request another extension under the procedures established in this subsection.
There shall not be a limit on the number of extensions that an owner may
request.
(5)
Grounds for Reinstatement or Extension.
(a)
Reasonable grounds shall be documentation of on-going efforts to obtain
financial, legal, material, or physical resources necessary to complete the
rehabilitation project or documentation that the delay in completion of the
rehabilitation project is necessary and unavoidable.
(b)
Reasonable grounds shall not include casualty loss or demolition to the extent
that the structure no longer qualifies as a certified historic structure,
inability to qualify as a substantial rehabilitation, or inability or
unwillingness to perform work conditioned by the council and necessary to qualify
the project as a certified rehabilitation.
(c)
The number of prior reinstatements or extensions shall not be a factor in
determining if a reinstatement or extension shall be granted.
Section
7. Inspection. The director or an authorized representative of the council
shall be permitted to conduct an inspection of the property at any time up to
three (3) years after the council has issued a Certification of Completed Work
to determine if the work meets the standards for rehabilitation established in
Section 4(2) of this administrative regulation.
Section 8. Appeal. A taxpayer may appeal a determination
that the rehabilitation project does not qualify as a certified rehabilitation
for purposes of the Act by filing an appeal in writing, in care of the council,
to the director or a reviewing officer designated by the director to hear an
appeal. (1) An appeal shall be made within thirty (30) days of the date of
receipt of the determination being appealed.
(2) The director or the reviewing officer shall decide,
based solely upon the record developed by the council, if the council:
(a) Reached incorrect conclusions of law;
(b) Made clearly erroneous factual findings;
(c) Did not consider relevant facts; or
(d) Abused the discretion available to that person.
(3) The director’s or reviewing officer’s decision shall:
(a) Confirm the determination;
(b) Reverse the determination on account of incorrect conclusions
of law; or
(c) Remand the matter to the council for further
proceedings.
(4) The director or reviewing officer shall decide the
appeal and shall notify the taxpayer of the decision in writing within thirty (30)
days from the date the appeal is received.
(5) If the appeal is decided by a reviewing officer and the
reviewing officer affirms the determination, the taxpayer may appeal the
reviewing officer's determination in writing to the director, pursuant to this subsection.
(a) An appeal to the director shall be filed within the time
period established in subsection (1) of this section.
(b) The director shall use the same standards of review established
in subsection (2) of this section.
(c) The director shall:
1. Confirm the decision of the reviewing officer;
2. Reverse the determination on account of incorrect conclusions
of law; or
3. Remand the matter to the council for further proceedings.
(d) The director shall decide the appeal and shall notify
the taxpayer of the decision in writing within thirty (30) days from the date
the appeal is received.
Section 9. Revocation of Owners’ Certifications. (1) If,
after obtaining final certification of rehabilitation, the council determines
that the rehabilitation was not undertaken as represented by the owner in the
applications, amendments, or supporting documentation, or the owner upon
obtaining final certification undertook disqualifying work, the council may
revoke a certification by giving written notice to the owner.
(2) The owner may file an appeal, pursuant to Section 8 of this administrative regulation.
(3) If the owner fails to file a timely appeal, the final
certification of rehabilitation shall be revoked.
Section
10. Fees for Processing Rehabilitation Certification Requests. (1) Payment of fees for review of Parts 2 and 3 shall be
filed with the council when applications are filed and are nonrefundable.
Certification shall not be issued until the appropriate remittance is received.
Payment shall be made by check or money order payable to the Kentucky State
Treasurer.
(2)
For tax credits under KRS 171.397, fees for reviewing
rehabilitation certification requests of owner-occupied residential property shall
be charged in accordance with the following schedule. If a Part 2 application
is denied, there shall not be a charge for a Part 3 review.
Rehabilitation
Costs for Owner-Occupied Residences
Part
2 Review Fee
Part
3 Review Fee
Less
than $100,000
$60
$40
$100,000
or greater
$150
$100
(3) For tax credits under KRS 171.397, fees for reviewing rehabilitation certification requests for all
property other than owner-occupied residential property shall be charged in
accordance with the following schedule. If a Part 2 application is denied,
there shall not be a charge for a Part 3 review.
Rehabilitation
Costs for Commercial and Other Buildings
Part
2 Review Fee
Part
3 Review Fee
Less
than $50,000
$60
$40
$50,000-
$99,999
$150
$100
$100,000-$499,999
$300
$200
$500,000-$999,999
$450
$300
$1
million or greater
$900
$600
(4)
For tax credits under KRS 171.3961, fees for
reviewing rehabilitation certification requests shall be charged in accordance
with the following schedule. If a Part 2 application is denied, there shall not
be a charge for a Part 3 review.
Rehabilitation
Costs
Part
2 Review Fee
Part
3 Review Fee
Greater
than $15 million
$3,000
$2,500
Section 11. Incorporation by Reference. (1) The following
material is incorporated by reference:
(a) "Certification Application Part 1-Evaluation of National
Register Status", KHC Form TC-1, Rev. 2014;
(b)
"Certification Application Part 2-Description of Rehabilitation", KHC
Form TC-2, Rev. 2014;
(c)
"Certification Application Part 3-Request for Certification of Completed
Work", KHC Form TC-3, Rev. 2014;
(d)
"Certification
Application-Continuation/Amendment", KHC Form TC-2a, Rev. 2014;
(e)
"Summary of Investment and Election of Credit", KHC Form TC-4, Rev. 2014; and
(f) "Certification Application-Intent to Apply for
Expanded Credit", KHC Form TC-0, Rev. Dec. 2014.
(2) This material may be inspected, copied, or
obtained, subject to applicable copyright law, at the Kentucky Heritage Council,
300 Washington Street, Frankfort, Kentucky 40601, Monday through Friday, 9 a.m.
to 4 p.m. (33
Ky.R. 2229; Am. 2937; eff. 4-6-2007; 41 Ky.R. 847; 1364; 1513; eff. 2-6-2015.)
