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Virginia Administrative Code
Title 22. Social Services
Agency 40. Department of Social Services
Chapter 41. Neighborhood Assistance Tax Credit Program

22VAC40-41-20. Purpose; procedure for becoming an approved organization; eligibility criteria; termination of approved organization; appeal procedure.

A. The purpose of the Neighborhood Assistance Program is to encourage business firms and individuals to make donations to neighborhood organizations for the benefit of low-income persons.

B. Neighborhood organizations that do not provide education services and that wish to become an approved organization must submit an application to the commissioner. Neighborhood organizations that provide education services must submit an application to the Superintendent of Public Instruction. The application submitted to the Superintendent of Public Instruction must comply with regulations or guidelines adopted by the Board of Education. The application submitted to the commissioner must contain the following information:

1. A description of eligibility as a neighborhood organization, the programs being conducted, the low-income persons assisted, the estimated amount that will be donated to the programs, and plans for implementing the programs.

2. Proof of the neighborhood organization's current exemption from income taxation under the provisions of § 501(c)(3) or 501(c)(4) of the Internal Revenue Code, or the organization's eligibility as a community action agency as defined in the Economic Opportunity Act of 1964 (42 USC § 2701 et seq.) or housing authority as defined in § 36-3 of the Code of Virginia.

3. For neighborhood organizations with total revenues (i) of more than $100,000, an audit or review for the most recent year or (ii) of $100,000 or less, a compilation for the most recent year. The audit, review, or compilation shall be performed by an independent certified public accountant. "Total revenues" means all revenues, including the value of all donations for the organization's most recent year.

4. A copy of the organization's current federal form 990.

5. A current brochure describing the organization's programs.

6. A copy of the annual report filed with the Department of Agriculture and Consumer Services' Division of Consumer Protection.

7. A statement of objective and measurable outcomes that are expected to occur and the method the organization will use to evaluate the program's effectiveness.

C. To be eligible for participation in the Neighborhood Assistance Program, the applicant and any of its affiliates must meet the following criteria:

1. Applicants must have been in operation as a viable entity, providing neighborhood assistance for low-income people, for at least 12 months.

2. Applicants must demonstrate that at least 50% of the persons served shall be low-income and at least 50% of the total revenues shall be used to provide services to low-income persons.

3. Applicant's audit must not contain any significant findings or areas of concern for the ongoing operation of the neighborhood organization.

4. Applicants must demonstrate that at least 75% of total revenue received is expended to support their ongoing programs each year.

D. Beginning with tax credit allocations for fiscal year 2016‑2017, the applicant and any of its affiliates must meet the following requirements:

1. Affiliates of neighborhood organizations must demonstrate that at least 50% of the persons served are low-income persons;

2. Affiliates of neighborhood organizations must demonstrate that at least 50% of the revenues are used to provide services to such persons;

3. Affiliates must also meet the definition of "neighborhood organization" under § 58.1-439.18 of the Code of Virginia; and

4. Affiliates are not required to submit an audit, review, or compilation, and such reports shall not apply in determining the eligibility of the neighborhood organization submitting a proposal.

E. Requirements in subsection D of this section do not apply to a neighborhood organization submitting a proposal and any of its affiliates, provided that:

1. The neighborhood organization otherwise meets all statutory requirements and regulations;

2. The neighborhood organization received a fiscal year 2013‑2014 allocation of neighborhood assistance tax credits; and

3. No affiliate of the neighborhood organization submits a proposal for or receives an allocation of tax credits pursuant to this chapter for the program year for which the neighborhood organization has submitted its proposal.

F. The application period will start no later than March 15 of each year. All applications must be received by the Department of Social Services no later than the first business day of May. An application filed without the required audit, review, or compilation will be considered timely filed provided that the audit, review, or compilation is filed within 30 days immediately following the deadline.

G. Those applicants submitting all required information and reports and meeting the eligibility criteria described in this section will be determined an approved organization. The program year will run from July 1 through June 30 of the following year.

H. The commissioner may terminate an approved organization's eligibility based on a finding of program abuse involving illegal activities or fraudulent reporting on contributions.

Statutory Authority

§§ 58.1-439.20 and 63.2-217 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 15, Issue 9, eff. February 17, 1999; amended, Virginia Register Volume 18, Issue 12, eff. April 1, 2002; Volume 23, Issue 22, eff. September 1, 2007; Volume 25, Issue 23, eff. September 1, 2009; Volume 29, Issue 1, eff. October 10, 2012; Volume 30, Issue 20, eff. July 2, 2014; Volume 30, Issue 23, eff. August 15, 2014; Volume 32, Issue 6, eff. December 31, 2015; Volume 33, Issue 2, eff. October 19, 2016; Volume 33, Issue 23, eff. August 10, 2017.

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