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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsOctober 2019


Regulatory Flexibility Act Form

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1 DE Admin. Code 901
The Historic Preservation Tax Credit Act (30 Del.C. Ch. 18, Subch. II) was first enacted by the General Assembly in 2001 and was amended in 2002, 2003, 2004, 2005, 2010 and 2014. Program regulations were adopted on July 11, 2002 (6 DE Reg. 108 published 07/01/02), and were amended on July 11, 2004 (8 DE Reg. 194 published 07/01/04), on January 11, 2005 (8 DE Reg. 1031 published 01/01/05), on October 11, 2010 (14 DE Reg. 485, published 11/01/2010), on September 11, 2014 (18 DE Reg. 237 published 09/01/14), and on November 11, 2018 (22 DE Reg. 409 published 11/1/18). The purpose of this proposed regulatory amendment is to eliminate section 7.4 which allows applicants to request an increase in their credit award. The intent of the provision, added to the regulation in 2010, was to take into consideration changes in project costs that can occur during construction. However the provision is not included in the enabling legislation or Delaware Code, and as written is open to interpretation and therefore vulnerable to challenges. Section 8.1.2 regarding fees for increased awards would also be eliminated from the regulation, as the removal of section 7.4 will render that subsection irrelevant. An amendment to section 7.6 of the regulation is also proposed to reflect changes to the program made in the 149th and 150th General Assembly of Delaware. The Bond and Capital Improvements Acts increased the total amount of credits available in each state fiscal year, through state fiscal year 2025 (81 Del. Laws c. 303 and 82 Del. Laws c. 86), but did not specifically allocate credits to a type of project. The amendment will establish the process for distributing unallocated credits in accordance with Delaware Code.
30 Del.C. Ch. 18, Subch. II, §1815(b)
PLEASE TAKE NOTICE, pursuant to 29 Del.C. Ch. 101, the Division of Historical and Cultural Affairs proposes to amend rules and regulations pursuant to its authority under 30 Del.C. §1815(b). The Division will receive and consider all written comments on the proposed rules and regulations related to implementation of amendments to the Historic Preservation Tax Credit Act. Submit comments to the Division in care of Timothy A. Slavin, Director, Division of Historical and Cultural Affairs, 21 The Green, Dover, DE 19901. The final date to submit comments is October 31, 2019. Anyone wishing to obtain a copy of the proposed amendments to the rules and regulations should notify Timothy A. Slavin at the above address or call 302-736-7400. This notice will be published in two newspapers of general circulation.
These regulations are created pursuant to 30 Del.C. Ch. 18, Subch. II, which authorizes the Division of Historical and Cultural Affairs to promulgate regulations for implementation of the provisions of this subchapter (except tax‑related procedures) including, but not limited to, setting of fees and development of standards for the rehabilitation of eligible historic properties. The subchapter further authorizes the Division of Historical and Cultural Affairs to promulgate the application and forms governing participation in the certification program.
Act” means the “Historic Preservation Tax Credit Act”, under 30 Del.C. Ch. 18, Subch. II.
Application” means the Delaware Historic Preservation Tax Credit application that shall consist of four parts, as follows: the Request for Certification of Historic Property (Part 1); the Request for Certification of Rehabilitation (Part 2); the Request for Certificate of Completion (Part 3), and the Request for Credit Award.
Building” means created principally to shelter any form of human activity.
"Certification of Completion", or "Certificate of Completion" means the certificate issued by the Delaware State Historic Preservation Officer attesting that the certified rehabilitation, or, if applicable, a phase of the certified rehabilitation project, has been completed, and that the documentation of qualified expenditures and project plans that would be required in order to qualify for tax credits under Section 47 of the Internal Revenue Code (26 USC 47) (whether or not the project would be eligible for the federal tax credit) has been obtained.
Certified historic property” means a property located within the State of Delaware that is:
Certified rehabilitation” means rehabilitation of a certified historic property, or portion of the property, that has been certified by the Delaware State Historic Preservation Officer as a substantial rehabilitation, and is in conformance with the Secretary of the Interior’s Standards for Rehabilitation (36 CFR 67) or other standards as the State Office shall from time to time adopt.
Credit award” means the amount of qualified expenditures as determined by the State Office multiplied by the appropriate percentage as determined in 30 Del.C. §1813.
Delaware State Historic Preservation Officer” means the person designated and appointed in accordance with the National Historic Preservation Act of 1966, as amended (54 USC §302301(1). The Delaware State Historic Preservation Officer is an appointed position held by the Director, Division of Historical and Cultural Affairs.
Downtown Development District” or “DDD” means an area within a municipality or unincorporated area designated by the governor as a Downtown Development District under 79 Del. Laws c. 240.
Federal tax credit” means the Federal Rehabilitation Tax Credit as defined in the United States Tax Code, Title 26, Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart E, Section 47 (26 USC 47).
Fiscal Year” means the State of Delaware’s fiscal year.
National Register of Historic Places” or “National Register” means the National Register of districts, sites, buildings, structures, and objects significant in American history, architecture, archaeology, engineering, and culture that the United States Secretary of the Interior is authorized to expand and maintain pursuant to Section 302101 of the National Historic Preservation Act of 1966, as amended (54 USC §300101 et seq.).
"Office" or "State Office" means the Delaware State Historic Preservation Office, which is a part of the Division of Historical and Cultural Affairs.
"Owner-occupied historic property" means a certified historic property, or portion of the property, which is owned by the applicant and is being used, or within a reasonable period will be used, by an applicant as the applicant’s principal residence. The property may consist of part of a multiple dwelling or multiple purpose building or series of buildings, including a cooperative or condominium. If only a portion of a building is used as the principal residence, only those qualified expenditures that are properly allocable to that portion shall be eligible under this subchapter to apply for tax credits calculated at the percentage available to owner-occupants.
"Person" or applicant means an individual; any form of company or corporation which is lawful within the State of Delaware (including limited liability companies and S corporations) whether or not for profit; any form of partnership which is lawful within the State of Delaware (including limited liability partnerships) whether or not for profit; any trust or estate; and any lawful joint venture. "Person" or “applicant” shall also mean a non-state governmental entity; or a pass-through entity or person under a lease contract for five years or longer.
Phased rehabilitation” means a certified rehabilitation of a certified historic property reasonably expected to be completed in two or more distinct stages of development as more fully described in Treasury Regulation 1-48-12(b)(v) or a successor provision.
"Property" means real estate and shall include any building which meets the definition in this section, including multiple-unit buildings.
Qualified expenditure” means an amount properly expended by a person for the certified rehabilitation of a certified historic property, but shall not include:
Reasonable period” means that an owner shall occupy the rehabilitated property as their principal residence within six months of the issuance of the Certificate of Completion. The State Office, in its sole discretion, may offer one extension, not to exceed three months, for cause.
Resident Curator” means a person who has entered into a contractual agreement with the owner of a certified property in which the person agrees to pay for full restoration of the owner’s property in exchange for a life tenancy in the property without remunerative compensation to the owner for the life tenancy.
Substantial rehabilitation” or “full restoration” means rehabilitation of a certified historic property for which the qualified expenditures exceeds:
Taxpayer” means a person, as defined in this section, and shall include an individual or corporation taxable under Title 5, or taxable under either 30 Del.C. Ch. 11, or 30 Del.C. Ch. 19.
6.5 After issuing a Certificate of Completion for a project, or an approved phase, the State Office shall submit the documentation of qualified expenditures and an 1811AC 0905 form to the Division of Revenue, and request a determination of the value of the documented expenditures and assignment of the calculated tax credits to the applicant in accordance with subsection 7.4 of these regulations for the completed project or an approved phase. For all projects in which the tax credits are to be applied against franchise taxes, and at other times as requested by the Division of Revenue, the forms and documentation will also be submitted to the State Bank Commissioner’s Office.
7.57.4 Despite having been assigned a certain credit award, an applicant may only claim the amount of tax credits which are supported by their actual rehabilitation costs.
7.67.5 Each fiscal year, $5 million of the total that is allocated for Credit Awards is to be distributed as follows:
7.6.17.5.1 $100,000 is reserved for distribution to qualified resident curators. If, in any fiscal year, there are insufficient qualified resident curators to exhaust this allotment, the unused credit amount will be available in the next fiscal year for award to any eligible project.
7.6.27.5.2 $1.5 million is reserved for projects receiving a credit award of not more than $300,000. After April 1, any unassigned portion of the $1.5 million is released to be available for credit awards to any eligible project.
7.6.37.5.3 $1.5 million is reserved for projects located in Downtown Development Districts, of which $500,000 is reserved for projects in DDDs receiving tax credits of not more than $300,000. After April 1, any unassigned portion of the $1.5 million is released to be available for credit awards to any eligible project.
11.1 Annually, on or before January 31st, the Delaware State Historic Preservation Officer shall issue an annual report on the restoration and rehabilitation status of all tax credit projects approved in the previous fiscal year.
Last Updated: December 31 1969 19:00:00.
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