Ala. Admin. Code r. 460-X-25-.14

Current through Register Vol. 43, No. 1, October 31, 2024

Section 460-X-25-.14 - [Effective 12/15/2024] Tax Credit Allocation Reservation

(1)Committee Ranking List of Qualifying Projects. Once the Historic Tax Credit Evaluating Committee reviews Qualifying Projects, approves credits for Projects, and ranks Projects in the order in which Projects should receive tax credit reservations based on established criteria, the Commission will issue a Tax Credit Allocation Reservation in the amount based on the estimated Qualified Rehabilitation Expenditures provided by the Applicant on the Part B Application. Tax Credit Allocation Reservations will be issued in the order in which the Committee has ranked Complete Applications and Rehabilitation Plans for each Application Period. The Committee ranking list will be maintained by the Commission on an Application Period by Application Period basis, and a Qualifying Project approved by the Committee in an earlier Application Period will receive a Tax Credit Allocation Reservation before a Qualifying Project approved by the Committee in a subsequent Application Period (regardless of such Project's score determined under Rule 460-X-25-.10). The only exception to maintaining the Committee's ranking list on an Application Period basis is when the Commission must allocate credits to certain Projects eligible for the 40% annual set-aside described in (4) below.

(2)Commission Tracking. The Commission shall track the cumulative amount of Tax Credit Allocation Reservations and will discontinue issuing Tax Credit Allocation Reservations once the total has reached the Aggregate Tax Credit Allocation Amount. When the Aggregate Tax Credit Allocation Amount has been reached, no further Tax Credit Allocation Reservations will be made until:

1) additional amounts are returned through the rescission of Tax Credit Allocation Reservations; or

2) a new Aggregate Tax Credit Allocation Amount becomes available. If an Applicant has applied for a Tax Credit Allocation Reservation that exceeds the remaining allocation available under Aggregate Tax Credit Allocation Amount, the Commission shall issue a Tax Credit Allocation Reservation in the amount of the available partial allocation (the "Partial Allocation"), and the amount requested by the Application that exceeds the Partial Allocation (the "Excess Allocation") shall remain in the first position on the Committee's ranking list until additional amounts are available, at which time the Commission shall issue a Tax Credit Allocation Reservation in the amount of the Excess Allocation. In no event shall projects be added to the ranking list after the $200,000,000 cap has been reached.

(3)Aggregate Tax Credit Allocation Amount Limits. The availability of Tax Credit Allocation Reservations is limited to the Aggregate Tax Credit Allocation Amount per tax year beginning on January 1, 2018, and extending through the expiration of tax credits, December 31, 2027. Of the annual amount of tax credits available, 40% shall be reserved to taxpayers with a Certified Historic Structure located in a county in which the population does not exceed 175,000 according to the most recent federal decennial census. In the event that Complete Applications are not received and credits are not allocated for Projects in these areas by the close of the third quarter of the Program year, the credits may be reserved for other Qualifying Projects. If all of the Aggregate Tax Credit Allocation Amount for any tax year is not requested and reserved, any unreserved tax credit allocations may be utilized by the Commission in reserving tax credits in subsequent years. No tax credit claimed for any Qualified Rehabilitation Expenditures may exceed five million dollars ($5,000,000) for Certified Historic Structures. Applications for the reservation of tax credits will be accepted beginning November 1, 2017, but no tax credit may be credited before the taxpayer's return for the taxable year 2017. All Applications under this Program shall be received through the final Application Period in 2027. In no event shall applications be accepted by the Commission after the Historic Tax Credit Evaluating Committee has ranked

1) non-set-aside county projects with a total amount equaling $120,000,000; notwithstanding the availability of credits due to rescissions and/or carry-over of set-aside county allocations; and

2) set-aside county projects with a total amount equaling $80,000,000. Additional application periods may be announced due to rescissions and/or carry-over of set-aside county allocations after the first nine months of the tax year. Reservations/Ranking List Prior to May 14, 2021. Any application received by the Commission in active status on the ranking list of the Historic Tax Credit Evaluating Committee or granted a tax credit allocation reservation prior to May 14, 2021, shall remain on the ranking list or in reservation status and shall receive a tax credit allocation reservation or a tax credit allocation when additional credits become available, including in any tax year commencing after 2022, except for applications that meet the Disqualifying Use definition as defined in 460-X-25-.02.

Projects Not Likely to Receive a Reservation. The Commission shall notify Applicants in writing of the status for Projects that are not likely to receive a Tax Credit Allocation Reservation because of the Project's place on the Committee ranking list and the available Aggregate Tax Credit Allocation Amount for that particular year. As long as the $200,000,000 cap has not been reached, the Commission shall contact the Applicant to determine if they wish to remain on the committee ranking list until new tax credits become available either through rescissions or a new Aggregate Tax Credit Allocation Amount, and the Applicant will have thirty (30) days to notify the Commission in writing of their preference If the $200,000, 000 cap has been reached, Applications will be returned to the Applicant. Applications may be resubmitted if another review cycle is announced by the Commission, but these Applications hall be deemed to be a new submission and will be charged a new Application fee by the Commission.

(4)Supplemental Tax Credit Allocation Reservation. In the event the amount of Qualified Rehabilitation Expenditures (QRE) incurred by the Owner exceeds the amount of Qualified Rehabilitation Expenditures estimated on Part B of the Application for the purpose of establishing the Tax Credit Allocation Reservation, the Applicant may apply to the Commission for a reservation of a supplemental Tax Credit Allocation Reservation in an amount equal to the excess, not to exceed the $5 million cap. Applications for a supplemental Tax Credit Allocation Reservation shall be made on a form prescribed and available from the Commission and shall be submitted with the Part C Application. If Projects are in good standing, Supplemental Tax Credit Applications shall be recommended to the Committee in the next available Review Cycle. Applicants who apply for a supplemental Tax Credit Allocation Reservation may be invoiced an additional fee based on the Applicant's increased QRE. If the supplemental request maintains a total QRE within the same fee Tier, the Applicant will pay a fee that equals the difference between the new fee and the fee already paid (this will only apply to Projects in Tier 1). If the supplemental request increases the total QRE to a fee Tier above the fee already paid, the Applicant will pay a fee that equals the difference between the higher fee and the fee already paid. If the Commission notifies the Applicant that their supplemental request will receive a Tax Credit Allocation Reservation, then the Commission will invoice for the fee, if applicable, which must be paid to the Commission in order to receive the reservation. A separate Tax Credit Certificate shall be issued for any supplemental Tax Credit Allocation reserved by the Commission for the Project.

(5)All Requirements Shall Be Met. A Tax Credit Allocation Reservation reserves a credit in the name of the Applicant only. No Tax Credit Certificate will be issued or can be used by the Applicant until all the requirements of the Program have been satisfied.

(6)Rescission. If a Tax Credit Allocation Reservation is rescinded, it will be returned to the Aggregate Tax Credit Allocation Amount available. Any Applicant whose Tax Credit Allocation Reservation is rescinded shall be notified in writing of the rescission by the Commission. A new Application may be submitted, but it will be treated as a new Application and will be charged a new Application fee.

(a) If, at any time, the Commission determines that the proposed or ongoing rehabilitation work is not consistent with the Standards, the Tax Credit Allocation Reservation for the Applicant may be rescinded.

(b) If, at any time, the Commission has reason to believe that a Project has become inactive or that it is not likely that it will be able to meet any or all the requirements of the Program, it shall notify the Applicant by registered or certified mail of the Commission's intent to rescind the Tax Credit Allocation Reservation. If the Applicant fails to respond within thirty (30) calendar days receipt of the notice that the Project is still active, the Commission may rescind the Tax Credit Allocation Reservation.

Ala. Admin. Code r. 460-X-25-.14

Adopted by Alabama Administrative Monthly Volume XXXV, Issue No. 11, August 31, 2017, eff. 9/24/2017.

Amended by Alabama Administrative Monthly Volume XL, Issue No. 03, December 30, 2021, eff. 2/13/2022.

Amended by Alabama Administrative Monthly Volume XLI, Issue No. 09, June 30, 2023, eff. 8/14/2023.

Amended by Alabama Administrative Monthly Volume XLIII, Issue No. 01, October 31, 2024, eff. 12/15/2024.

Author: Chloe Mercer; Lee Anne Hewett

Statutory Authority: Act 2017-380; Act 2021-431; Act 2023-522.