Iowa Administrative Code › Agency 261 - Economic Development Authority › Part III - Community Development Division › Chapter 49 - Historic Preservation and Cultural and Entertainment District Tax Credits › Rule 261-49.17 - Compliance

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Annual
				reports.
The eligible taxpayer shall, for the length of the agreement,
				annually certify to the authority compliance with the requirements of the
				agreement. The certification shall be due each year on the anniversary of the
				date upon which the agreement was entered into. Instructions and forms may be
				obtained by contacting the authority or by visiting the authority's Web
				site.
(2)
Burden of
				proof.
The eligible taxpayer shall have the burden of proof to
				demonstrate to the authority that all requirements of the agreement, Iowa Code
				chapter 404A, and the applicable rules are satisfied. The taxpayer shall notify
				the authority in a timely manner of any changes in the qualification of the
				rehabilitation project or in the eligibility of the taxpayer to claim the tax
				credit provided under this chapter, or of any other change that may have a
				negative impact on the eligible taxpayer's ability to successfully complete any
				requirement under the agreement.
(3)
Events of default, revocation,
				recapture.
If, after entering into the agreement but before a tax
				credit certificate is issued, the eligible taxpayer or the qualified
				rehabilitation project no longer meets the requirements of the agreement, Iowa
				Code chapter 404A, and the applicable rules, the authority may find the
				taxpayer in default and may revoke the tax credit award.
a.
Voluntary abandonment.
An
				applicant may choose to irrevocably decline the tax credit that is the subject
				of the agreement at any time after the agreement is entered into. To
				irrevocably decline the tax credit, the applicant shall send a letter to the
				authority stating the applicant's decision to irrevocably decline the tax
				credit. The authority shall notify the applicant by certified U. S. mail or
				courier that the tax credit has been irrevocably declined. The tax credit shall
				be reallocated to the extent permitted by Iowa Code section
				404A4..
				If the applicant wishes to apply for a tax credit on the same qualified
				rehabilitation project at a later date, the applicant must complete the
				application process as though the project is a new project.
b.
Revocation and recapture for
				prohibited activity; liability of certain transferees.
If an eligible
				taxpayer obtains a tax credit certificate from the authority by way of a
				prohibited activity, the eligible taxpayer and any transferee shall be jointly
				and severally liable to the state for the amount of the tax credits so issued,
				interest and penalties allowed under Iowa Code chapter 422, and reasonable
				attorney fees and litigation costs, except that the liability of the transferee
				shall not exceed an amount equal to the amount of the tax credits acquired by
				the transferee. The department of revenue, upon notification or discovery that
				a tax credit certificate was issued to an eligible taxpayer by way of a
				prohibited activity, shall revoke any outstanding tax credit and seek repayment
				of the value of any tax credit already claimed, and the failure to make such a
				repayment may be treated by the department of revenue in the same manner as a
				failure to pay the tax shown due or required to be shown due with the filing of
				a return or deposit form. A qualifying transferee is not subject to the
				liability, revocation, and repayment imposed under this paragraph. For purposes
				of this paragraph:
(1)
"Control"
means when a
				person, directly or indirectly or acting through or together with one or more
				persons, satisfies any of the following:
1.
				Owns, controls, or has the power to vote 50 percent or more of any class of
				voting securities or voting membership interests of another person.
2. Controls, in any manner, the election of a
				majority of the directors, managers, trustees, or other persons exercising
				similar functions of another person.
3. Has the power to exercise a controlling
				influence over the management or policies of another person.
(2)
"Prohibited activity
				"
means a breach or default under the agreement with the authority,
				the violation of any warranty provided by the eligible taxpayer to SHPO or the
				authority, the claiming of a tax credit issued under this chapter for
				expenditures that are not qualified rehabilitation expenditures, the violation
				of any requirements of Iowa Code chapter 404A or rules adopted pursuant to Iowa
				Code chapter 404A, misrepresentation, fraud, or any other unlawful act or
				omission.
(3)
"Qualifying
				transferee "
means a transferee who acquires a tax credit certificate
				issued under this chapter for value, in good faith, without express or implied
				notice of a prohibited activity of the eligible taxpayer who was originally
				issued the tax credit, and without express or implied notice of any other claim
				to or defense against the tax credit, and which transferee is not associated
				with the eligible taxpayer by being one or more of the following:
1. An owner, member, shareholder, or partner
				of the eligible taxpayer who directly or indirectly owns and controls, in whole
				or in part, the eligible taxpayer.
2. A director, officer, or employee of the
				eligible taxpayer.
3. A relative of
				the eligible taxpayer or a person listed in paragraph "1" or "2" of this
				subparagraph or, if the eligible taxpayer or an owner, member, shareholder, or
				partner of the eligible taxpayer is a legal entity, the natural persons who
				ultimately own such legal entity.
4. A person who is owned or controlled, in
				whole or in part, by a person listed in paragraph "1" or "2" of this
				subparagraph.
(4)
"Relative"
means an
				individual related by consanguinity within the second degree as determined by
				common law, a spouse, or an individual related to a spouse within the second
				degree as so determined, and includes an individual in an adoptive relationship
				within the second degree.