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Virginia Administrative Code
Title 17. Libraries And Cultural Resources
Agency 10. Department of Historic Resources
Chapter 30. Historic Rehabilitation Tax Credit

17VAC10-30-50. Certifications of rehabilitation.

A. Owners requesting certification of rehabilitation projects shall comply with the procedures described in this section. A fee, described in 17VAC10-30-80, is charged by the Department of Historic Resources for reviewing all proposed, ongoing, and completed rehabilitation work. No certification decisions shall be issued to any owner until the appropriate remittance is received. Owners may request the department's review before, during, or after completion of a rehabilitation project. Owners are strongly encouraged to request the department's review before beginning a rehabilitation project. Though owners may begin work prior to review by the department, the department cannot guarantee in any way that such work will be certified for tax credits. Such work is undertaken at the risk of the owner.

1. To request review of a rehabilitation project, the project owner shall submit Part 2 of the Historic Preservation Certification Application, "Description of Rehabilitation," according to the instructions accompanying the application. Documentation, including photographs adequate to document the appearance of the structure, both on the interior and the exterior, and its site and environment before rehabilitation, shall accompany the application. Other documentation, including plans, specifications, surveys, renderings, and sight-line studies, may be required to evaluate rehabilitation projects. In the event of any discrepancy between the application and other supplementary material submitted with it (such as architectural plans, drawings, and specifications), the application shall take precedence. If necessary documentation is not provided and review and evaluation are not possible, a denial of certification will be issued on the basis of lack of information. Because the circumstances of each rehabilitation project are unique, 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.

2. To request certification of a completed rehabilitation project, the owner shall submit Part 3 of the Historic Preservation Certification Application, "Request for Certification of Completed Work," according to the instructions accompanying the application, and provide documentation that the completed project is consistent with the work described in Part 2. This documentation includes but is not limited to:

a. Name and mailing address or addresses of the owner or owners;

b. Name and address of the property;

c. Comprehensive photographs of the property showing the completed rehabilitation work, including exterior and interior features and spaces to demonstrate that the completed work is consistent with the Standards for Rehabilitation;

d. Assessed value of the building in the year preceding the start of rehabilitation;

e. Final costs attributed to the rehabilitation work (see 17VAC10-30-110 for information on eligible expenses);

f. For a project with (i) rehabilitation expenses of $500,000 or greater, a report of an audit of the rehabilitation expenses by an independent certified public accountant in accordance with the department's Rehabilitation Tax Credit Program Certification Requirements, dated October 2015; or (ii) less than $500,000 in rehabilitation expenses, an agreed-upon procedures engagement report of the rehabilitation expenses by an independent certified public accountant in accordance with the department's Rehabilitation Tax Credit Program Certification Requirements, dated October 2015;

g. Signature of the owner. By signing the application, the owner declares that the information stated is correct to the best of the owner's knowledge. Submission of false records or falsification of anything in communications with the department is grounds for denial of the certification of completed work and is punishable under Virginia law and federal law. The department shall submit any relevant information in its possession to the appropriate law-enforcement officials or governmental agencies as necessary; and

h. At the department's request, any additional information relevant to determining whether a project meets the requirements of the program. This includes the department's right to inspect the property upon reasonable notice.

B. Each rehabilitation project shall be done according to a plan of rehabilitation. Although the department has not set any formal requirements for a plan of rehabilitation, every plan shall include, at a minimum, the name of the owner of the property, the location of the property, and a description of the proposed, ongoing, or completed rehabilitation project. A plan of rehabilitation must provide the department with sufficient information to determine whether the rehabilitation qualifies for certification. The burden is on the owner to supply sufficient information for the department to make a determination.

C. A rehabilitation project for certification purposes encompasses all work on the interior and exterior of the certified historic structure or structures and its site and environment, as well as related demolition, new construction or rehabilitation work that may affect the historic qualities, integrity, site, landscape features, and environment of the property.

1. All elements of the rehabilitation project shall be consistent with the Standards for Rehabilitation, as set forth in 17VAC10-30-60. Portions of a project that are not in conformance with the standards may not be exempted, and the department may require remediation as a condition to receiving a certification of completed work. In general, an owner undertaking a rehabilitation project will not be held responsible for prior rehabilitation work not part of the current project, as long as it was done in good faith (without intent to circumvent the requirements set forth in this chapter or otherwise defraud the Commonwealth) and at least five years prior to submitting an application. Such prior work will not be considered done in good faith if the owner has received historic rehabilitation tax credits under Virginia's program in the past five years. Owners will not be held responsible for work or rehabilitation work that was undertaken by previous owners, as long as the previous owner is not a related party.

2. Conformance with the standards will be determined on the basis of the application documentation and other available information, which may include physical inspection of the property by the department, evaluation of the property as it existed before the beginning of the rehabilitation project, and its condition at the completion of the rehabilitation.

3. If the legal boundaries of the property change after the owner submits the Part 1 of the Historic Preservation Certification Application, this information must be disclosed to the department in writing. The disclosure must describe the change in the property boundaries and the relationships, if any, between the owner of the property and the owners of adjacent properties. Situations involving a related party between the owner of the property for which rehabilitation tax credits are sought and an owner of adjacent property may require an expanded scope of review by the department.

D. The department, on receipt of the complete application describing the rehabilitation project, shall determine if the project is consistent with the Standards for Rehabilitation. If the project does not meet the standards, the department shall advise the owner of that fact in writing. Where possible, the department will advise the project owner of necessary revisions to meet the standards.

E. Once a proposed or ongoing plan of rehabilitation has been certified, substantive changes in the work as described in the application shall be brought promptly to the attention of the department by written statement to ensure continued conformance to the Standards for Rehabilitation. The owner shall describe the change on the "Continuation/Amendment Sheet" of the Historic Preservation Certification Application and include relevant documentation for evaluation by the department. The department strongly recommends receiving certification of changes before commencing such work. Any work that does not conform to the plan of rehabilitation as certified by the department is at the owner's own risk, as changes that are not consistent with the standards may cause the entire project to be denied certification. After Part 3 of the application has been submitted, only essential corrections to the application may be made. The department may consider amendments to correct information within one year of the issuance of the certification of completed work, if justified.

F. An authorized representative of the department may inspect projects to determine if the work meets the Standards for Rehabilitation and is consistent with any information the owner supplied to the department, including whether the actual work completed is consistent with the costs reported. The department reserves the right to make inspections at any time up to three years after certification of completed rehabilitation and to revoke a certification, after giving the owner 30 days to comment on the matter, if it is determined that the rehabilitation project was not undertaken as represented in the application and supporting documentation. If the department discovers a material error of fact or misrepresentation in the information submitted for certification, the owner must address the issue within 60 calendar days of written notice by the department to avoid revocation of certification. The department may investigate any project where it reasonably suspects fraud or misrepresentation, regardless of the time that may have passed since certification of completed rehabilitation. The tax consequences of a revocation of certification will be determined by the Department of Taxation. However, certification shall not be revoked for changes that are determined to have been made following good-faith completion of the project.

Statutory Authority

§§ 10.1-2202 and 58.1-339.2 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 22, Issue 13, eff. April 5, 2006; amended, Virginia Register Volume 32, Issue 10, eff. February 10, 2016.

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