Arkansas Administrative Code › Agency 233 - Department of Parks, Heritage, and Tourism › Division 04 - Division of Heritage › Rule 233.04.23-001 - Rules Governing The Arkansas Major Historic Rehabilitation Income Tax Credit Act

Current through Register Vol. 49, No. 6, June, 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.pdf
3. 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.