§ 404A.3 — Application and registration — agreement — compliance and examination

Iowa § 404A.3

• Jurisdiction: Iowa
• Title IX: LOCAL GOVERNMENT
• Ch. 404A: HISTORIC PRESERVATION TAX CREDIT

Text

1. Application and fees.
a. Aneligibletaxpayerseekinghistoricpreservationtaxcreditsprovidedinsection404A.2
shall make application to the authority in the manner prescribed by the authority.
b. The authority may accept applications on a continuous basis or may accept
applications, or one or more components of an application, during one or more application
periods.
c. The application shall include any information deemed necessary by the authority to
evaluate the eligibility under the program of the applicant and the rehabilitation project, the
amount of projected qualified rehabilitation expenditures of a rehabilitation project, and the
amount and source of all funding for a rehabilitation project. An applicant shall have the
burden of proof to demonstrate to the authority that the applicant is an eligible taxpayer and
the project is a qualified rehabilitation project under the program.
d. Theauthoritymayestablishcriteriafortheuseofelectronicorotheralternativefilingor
submission methods for any application, document, or payment requested or required under
this program. Such criteria may provide for the acceptance of a signature in a form other
than the handwriting of a person.
e. (1) Theauthoritymaychargeapplicationandotherfeestoeligibletaxpayerswhoapply
§404A.3, HISTORIC PRESERVATION TAX CREDIT 4
toparticipateintheprogram. Theamountofsuchfeesshallbedeterminedbasedonthecosts
to the authority of administering the program.
(2) Fees collected by the authority pursuant to this paragraph shall be deposited with the
authority notwithstanding section 8A.708, subsection 1.
2. Registration.
a. Upon review of the application by the authority, the authority may register a qualified
rehabilitation project under the program. If the authority registers the project, the authority
shall make a preliminary determination as to the amount of tax credits for which the project
qualifies.
b. After registering the qualified rehabilitation project, the authority shall notify the
eligible taxpayer of successful registration under the program within a period of time
established by the authority by rule. The notification shall include the amount of tax credits
under section 404A.2 for which the qualified rehabilitation project has received a tentative
award and a statement that the amount is a preliminary determination only.
3. Agreement.
a. Upon successful registration of a qualified rehabilitation project, the eligible taxpayer
shall enter into an agreement with the authority for the successful completion of all
requirements of the program.
b. The agreement shall contain mutually agreeable terms and conditions which, at a
minimum, provide for the following:
(1) The amount of the tax credit award. An eligible taxpayer has no right to receive a tax
credit certificate or claim a tax credit until all requirements of the agreement and subsections
4 and 5 have been satisfied. The amount of tax credit included on a tax credit certificate
issued under this section shall be contingent upon verification by the authority of the amount
of final qualified rehabilitation expenditures.
(2) The rehabilitation work to be performed. An eligible taxpayer shall perform the
rehabilitation work consistent with the United States secretary of the interior’s standards
for rehabilitation, as determined by the authority.
(3) The budget of the qualified rehabilitation project, including the projected qualified
rehabilitation expenditures, allowable cost overruns, and the source and amount of all
funding received or anticipated to be received. The amount of allowable cost overruns
provided for in the agreement shall not exceed the following amount:
(a) For a qualified rehabilitation project with final qualified rehabilitation expenditures of
not more than seven hundred fifty thousand dollars, fifteen percent of the projected qualified
rehabilitation expenditures provided for in the agreement.
(b) For a qualified rehabilitation project with final qualified rehabilitation expenditures
of more than seven hundred fifty thousand dollars but not more than six million dollars, ten
percent of the projected qualified rehabilitation expenditures provided for in the agreement.
(c) For a qualified rehabilitation project with final qualified rehabilitation expenditures
of more than six million dollars, five percent of the projected qualified rehabilitation
expenditures provided for in the agreement.
(4) The date by which the qualified rehabilitation project must commence, which shall be
no later than one calendar year from the registration date. Upon application of the eligible
taxpayer, the authority may, at the discretion of the authority, extend the date by which
the qualified rehabilitation project must commence up to an additional twelve consecutive
months.
(5) (a) The date by which the qualified rehabilitation project must be completed, which
shall be no later than three consecutive calendar years from the registration date. The
qualified rehabilitation project shall be considered complete as of the date the property that
is the subject of the qualified rehabilitation project is placed in service, as described in 26
U.S.C. §47.
(b) Upon application of the eligible taxpayer, the authority may, at the discretion of the
authority, extend the date by which the qualified rehabilitation project must be complete up
to an additional twelve consecutive months.
(c) Upon application of the eligible taxpayer made prior to the expiration of an extension
under subparagraph division (b), the authority may, at the discretion of the authority,
5 HISTORIC PRESERVATION TAX CREDIT, §404A.3
extend the date by which the qualified rehabilitation project must be complete up to an
additional twelve consecutive months. The qualified eligible taxpayer must substantiate to
the satisfaction of the authority that the requested extension is warranted due to extenuating
circumstances outside the control of the eligible taxpayer.
(d) An application by an eligible taxpayer under subparagraph division (b) or (c) shall be
made in the manner and form prescribed by the authority by rule.
(6) The date on which the agreement terminates, which date shall not be earlier than five
years from the date on which the tax credit certificate is issued.
4. Compliance.
a. The eligible taxpayer shall, for the length of the agreement, annually certify to the
authoritycompliancewiththerequirementsoftheagreement. Thecertificationshallbemade
at such time as the authority shall determine in the agreement.
b. The eligible taxpayer shall have the burden of proof to demonstrate to the authority
that all requirements of the agreement 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.
c. (1) 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, the authority may find the taxpayer in default under the agreement and may
revoke the tax credit award.
(2) 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 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 subparagraph.
(3) For purposes of this paragraph:
(a) “Control” means when a person, directly or indirectly or acting through or together
with one or more persons, satisfies any of the following:
(i) Owns, controls, or has the power to vote fifty percent or more of any class of voting
securities or voting membership interests of another person.
(ii) Controls, inanymanner, theelectionofamajorityofthedirectors, managers, trustees,
or other persons exercising similar functions of another person.
(iii) Has the power to exercise a controlling influence over the management or policies of
another person.
(b) “Prohibited activity” means a breach or default under the agreement with the
authority, the violation of any warranty provided by the eligible taxpayer to the authority
or the department of revenue, the claiming of a tax credit issued under this chapter
for expenditures that are not qualified rehabilitation expenditures, the violation of any
requirements of this chapter or rules adopted pursuant to this chapter, misrepresentation,
fraud, or any other unlawful act or omission.
(c) “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:
(i) 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.
§404A.3, HISTORIC PRESERVATION TAX CREDIT 6
(ii) A director, officer, or employee of the eligible taxpayer.
(iii) A relative of the eligible taxpayer or a person listed in subparagraph subdivision (i)
or (ii) 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.
(iv) A person who is owned or controlled, in whole or in part, by a person listed in
subparagraph subdivision (i) or (ii).
(d) “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.
5. Examination of project.
a. An eligible taxpayer shall engage a certified public accountant authorized to practice in
this state to conduct an examination of the project in accordance with the American institute
of certified public accountants’ statements on standards for attestation engagements.
Upon completion of the qualified rehabilitation project, the eligible taxpayer shall submit
the examination to the authority, along with a statement of the amount of final qualified
rehabilitation expenditures and any other information deemed necessary by the authority in
order to verify that all requirements of the agreement, this chapter, and all rules adopted
pursuant to this chapter have been satisfied. The authority shall adopt rules governing
examinations required under this subsection.
b. Notwithstanding paragraph “a”, the authority may waive the examination requirement
in this subsection if all the following requirements are satisfied:
(1) The final qualified rehabilitation expenditures of the qualified rehabilitation project,
as verified by the authority, do not exceed one hundred thousand dollars.
(2) The qualified rehabilitation project is funded exclusively by private funding sources.
c. Upon review of the examination, if applicable, the authority shall verify that all
requirements of the agreement, this chapter, and all rules adopted pursuant to this chapter
have been satisfied and shall verify the amount of final qualified rehabilitation expenditures.
If the authority determines that all requirements of the agreement, this chapter, and all rules
adopted pursuant to this chapter have been satisfied and it has verified the amount of final
qualified rehabilitation expenditures, the authority shall issue a tax credit certificate to the
eligible taxpayer stating the amount of the credit under section 404A.2 the eligible taxpayer
may claim.
6. Waivers. Notwithstanding any other provision of this chapter to the contrary, the
authority may waive the requirements of subsections 1 through 4, except the requirements
relating to allowable cost overruns in subsection 3, paragraph “b”, subparagraph (3), and the
requirements in subsection 4, paragraphs “b” and “c”, for qualified rehabilitation projects
with final qualified rehabilitation expenditures of seven hundred fifty thousand dollars or
less and may establish by rule different application, registration, agreement, compliance, or
other requirements relating to such projects.
7. Amendments. The authority may for good cause amend an agreement.