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Virginia Administrative Code
Title 13. Housing
Agency 5. Department of Housing and Community Development
Chapter 112. Enterprise Zone Grant Program Regulation
2/25/2020

13VAC5-112-340. Computation of Grant Amount.

A. For any qualified zone investor, the amount of the grant shall be equal to 20% of the amount of qualified real property investment in excess of $500,000 in the case of the construction of a new building or facility. In the case of the rehabilitation or expansion of an existing building or facility grants shall be equal to 20% of the amount of qualified real property investment in excess of $100,000. Beginning on January 1, 2019, the installation of solar panels shall be considered eligible investments for the purposes of the real property investment grant. A qualified zone investor may receive a grant for the installation of solar panels provided that such solar installation investment is in an amount of at least $50,000 and the grant shall be calculated at a rate of 20% of the amount of qualified real property investments in excess of $450,000 in the case of construction of a new building or facility. Grants shall be calculated at a rate of 20% of the amount of qualified real property investment in excess of $50,000 in the case of the rehabilitation or expansion of an existing building or facility. In the case where the grant is awarded based solely on solar investment, the grant shall be calculated at a rate of 20% of the amount of total qualified real property investments made in solar installation. For such properties eligible for real property investment grants made solely on the basis of solar installation investments of at least $50,000 but not more than $100,000, awards shall not exceed $1 million in aggregate in any fiscal year. Qualified zone investments are defined in subdivisions 1 and 2 of this subsection:

1. Qualified zone investments include expenditures associated with (i) any exterior, interior, structural, mechanical, or electrical improvements necessary to construct, expand, or rehabilitate a building for commercial, industrial, or mixed use; (ii) excavations; (iii) grading and paving; (iv) installing driveways; and (v) landscaping or land improvements. These can include costs associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, fire suppression systems, roofing, flashing, exterior repair, cleaning and cleanup, and solar panels.

2. Qualified real property investments do not include:

a. The cost of acquiring any real property or building.

b. Other costs, including (i) the cost of furnishings; (ii) any expenditure associated with appraisal, architectural, engineering, surveying, and interior design fees; (iii) loan fees, points, or capitalized interest; (iv) legal, accounting, realtor, sales and marketing, or other professional fees; (v) closing costs, permits, user fees, zoning fees, impact fees, and inspection fees; (vi) bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities incurred during construction; (vii) utility connection or access fees; (viii) outbuildings; (ix) the cost of any well or septic or sewer system; and (x) roads.

c. The basis of any property (i) for which a grant under this section was previously provided; (ii) for which a tax credit under § 59.1-280.1 of the Code of Virginia was previously granted; (iii) which was previously placed in service in Virginia by the qualified zone investor, a related party as defined by § 267(b) of the Internal Revenue Code, or a trade or business under common control as defined by § 52(b) of the Internal Revenue Code; or (iv) that was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom it was acquired or § 1014(a) of the Internal Revenue Code.

B. For any qualified zone investor making less than $5 million in qualified real property investment, the cumulative grant will not exceed $100,000 within any five-year period for any building or facility.

1. In cases where subsequent qualified real property investment within the five-year period results in the total qualified real property investment equaling $5 million or more then the qualified investors shall be eligible to receive grants provided that the total of all grants received within the five-year period does not exceed a maximum of $200,000 per building or facility.

2. In such cases the grant will be available to the qualified zone investor whose qualified real property investment application results in the total qualified real property investment for the building or facility to equal $5 million or more for the calendar year in which the $5 million threshold is met. The grant will be equal to 20% of the amount of qualified real property investment in excess of $500,000 in the case of the construction of a new building or facility, or in the case of the rehabilitation or expansion of an existing building or facility 20% of the amount of qualified real property investment in excess of $100,000 notwithstanding the $200,000 cap per building or facility pursuant to subsection D of this section.

C. For any qualified zone investor making $5 million or more in qualified real property investments, the cumulative grant will not exceed $200,000 within any five-year period for any building or facility.

D. Notwithstanding subsection E of this section, in the case of a building with multiple tenants or owners, the maximum amount of the real property investment grant to each tenant or owner shall relate to the proportion of the property for the tenant holds a valid lease or the owner has a deed of trust.

1. This maximum shall be determined by the cumulative level of qualified real property investment made within the five consecutive year period. The first five consecutive year period starts with the first real property investment grant issued pursuant to § 59.1-548 of the Code of Virginia.

2. If the total of all qualified real property investments up to and including those made in the current grant year are less than $5 million then the maximum real property investment grant that any one qualified zone investor shall receive shall be equal to the qualified zone investor's proportion of the building or facility's useable floor space times $100,000 or 20% of the amount of qualified real property investment in excess of $500,000 in the case of the construction of a new building or facility, or in the case of the rehabilitation or expansion of an existing building or facility 20% of the amount of qualified real property investment in excess of $100,000, whichever is less.

3. If the total of all qualified real property investments up to and including those made in the current grant year are $5 million or more then the maximum real property investment grant that any one qualified zone investor shall receive shall be equal the qualified zone investor's proportion of the building or facility's useable floor space times $200,000 or 20% of the amount of qualified real property investment in excess of $500,000 in the case of the construction of a new building or facility, or in the case of the rehabilitation or expansion of an existing building or facility, 20% of the amount of qualified real property investment in excess of $100,000, whichever is less.

E. The total grant amount per building or facility within a five-year period shall not exceed $200,000.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Volume 23, Issue 12, eff. March 21, 2007; amended, Virginia Register Volume 24, Issue 08, eff. January 23, 2008; Volume 26, Issue 01, eff. October 14, 2009; Volume 35, Issue 23, eff. August 7, 2019.

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