D.C. Mun. Regs. tit. 10, r. 10-B5903

Current through Register Vol. 71, No. 44, November 1, 2024

Rule 10-B5903 - REQUIREMENTS FOR TAX ABATEMENTS FOR NEW RESIDENTIAL DEVELOPMENTS

5903.1

As a prerequisite to a property receiving a tax abatement, the provisions of section 5903 of this chapter must be satisfied. No request for certification will be accepted by DMED until the date this chapter becomes effective. The application process for a residential tax abatement is governed by the following subsections:

(a) 5903.2 and 5903.3, Excluded projects;

(b) 5903.4, Eligible area deadlines;

(c) 5903.5, Threshold requirement for Eligible Area # 1;

(d) 5903.6, Threshold requirement for Eligible Area # 2;

(e) 5903.7, Threshold requirements for Eligible Area # 3;

(f) 5903.8, Building permit or first level of concrete requirement;

(g) 5903.9, Certification request process if an owner has a certificate of occupancy;

(h) 5903.10, Certification request process if owner does not have a certificate of occupancy;

(i) 5903.11, Review process for certification requests and issuance of reservation letter;

(j) 5903.12, Compliance deadlines;

(k) 5903.13, Ordering of certification requests;

(l) 5903.14, Final requirements for certification following issuance of reservation letter;

(m) 5903.15, Certification of tax abatement;

(n) 5903.16, Condominiums; and

(o) 5903.17, Penalties.

5903.2

A tax abatement under this chapter shall not be allowed for a project which is financed in any part by the Tax Increment Financing program set forth in subchapter IX of chapter 12 of Title 2 (D.C. Official Code § 2-1217.01 et seq.).

5903.3

A tax abatement under this chapter shall not be allowed for a property which receives relief as the result of the Distressed Properties Program under D.C. Official Code § 42-3508.02.

5903.4

A tax abatement shall not be allowed unless the owner obtains the documents required by section 5903.8(a) or (b) of this chapter and submits to DMED the letter and other documents required by section 5903.9 of this chapter prior to the following deadlines:

(a) December 31, 2003, if the property is located in Eligible Area # 1;

(b) December 31, 2005, if the property is located in Eligible Area # 2; or

(c) December 31, 2004, if the property is located in Eligible Area # 3.

5903.5

A tax abatement in Eligible Area # 1 shall only be allowed if the final building permit was issued after April 30, 2001; or, if the final building permit was issued before April 30, 2001 and the last of the building's excavation and sheeting and shoring permits were issued after January 1, 2001.

5903.6

A tax abatement in Eligible Area # 2 shall only be allowed if the final building permit was issued after April 19, 2002.

5903.7

A tax abatement in Eligible Area # 3 shall only be allowed if the final building permit was issued after April 19, 2002 and the owner has received a letter from DMED stating that such tax abatement is needed to supplement, or is in lieu of, financial assistance granted by the D.C. Housing Finance Agency or the Department of Housing and Community Development.

5903.8

Prior to requesting certification of a tax abatement, the owner must receive:

(a) A final building permit; or

(b) Letters from the building architect and DMED certifying that the first level of concrete has been laid and the building has received building permits for both (1) the building's sheeting and shoring and excavation work and (2) the building's foundation to grade structural work. Certification by DMED that the first level of concrete has been laid shall be deemed to have been given upon the submission by the owner of the standard test reports to DCRA. DMED shall issue a certification letter regarding the first layer of concrete being laid within ten (10) business days following receipt of written request from the owner and receipt of the standard concrete tests reports by DCRA, if such reports are required by DCRA. However, if the owner has obtained a certificate of occupancy prior to requesting certification of a tax abatement, section 5903.8 shall not be applicable.

5903.9

If a certificate of occupancy has been issued to the owner, the owner shall submit a letter to DMED requesting a tax abatement certification that the property is eligible for a certain annual dollar amount of residential tax abatement as set forth in Title VI of the Housing Act of 2002. The letter shall include the information required in 5903.10(a) (i) -- (iv), (vi), (vii), (ix) and (x) and, if applicable (xi) -- (xiii), along with the documents in 5903.10(b) (iv) (A), (B) and (E), 5903.10(b) (v), and 5903.14.

5903.10

If a certificate of occupancy has not been issued to the owner, the owner shall submit a letter to DMED requesting a tax abatement certification that the property is eligible for a certain annual dollar amount of residential tax abatement as set forth in Title VI of the Housing Act of 2002.

(a) The owner's request letter shall include the following information about the project:

(i) the Eligible Area in which the project is located;

(ii) the address of the project;

(iii) the square and lot number;

(iv) the proposed number of residential units;

(v) a statement that the documents required by subsection 5903.8 of this chapter have been obtained and are attached;

(vi) the total residential FAR square footage;

(vii) the annual dollar amount of residential tax abatement requested;

(viii) confirmation of the use of concrete construction and underground parking;

(ix) a statement that no financing is being provided under the Tax Increment Financing program referenced in subsection 5903.2 of this chapter;

(x) a statement that no relief is being provided under the Distressed Properties program referenced in subsection 5903.3 of this chapter;

(xi) for projects eligible pursuant to sections 5906 through 5909, a statement that the units made available to a low-income household, sixty (60%) percent of area median income household, very low-income household or extremely low-income household are equivalent in size and quality to the other dwelling units in the development and reasonably similar to the variety of sizes of the dwelling units in the eligible property as a whole; and

(xii) for projects in Eligible Area # 3, a statement that the tax abatement is needed to supplement, or is in lieu of, financial assistance from the D.C. Housing Finance Agency or the Department of Housing and Community Development, and any additional information DMED may require.

(b) the owner's request letter shall include the following attachments:

(i) No more than three (3) dated photographs of the project taken within the ten (10) day period that proceeds the date of submission of the owner's request for tax abatement reservation to DMED; provided, that if the owner's request letter states that the first level of concrete has been laid, at least one (1) photograph must show the first level of concrete;

(ii) the documents specified under section 5903.8(a) or (b) of this chapter;

(iii) certification of the total residential FAR square footage certified by DMED or by the owner's architect;

(iv) the following items:

(A) an area map showing the applicable eligibility area boundary and the project by location arrow;

(B) scaled site plan with building footprint; provided, that the plans shall be submitted in both full size and 11" by 17" format;

(C) tabulation of the zoning data for the project prepared and certified by the project architect, which includes both allowed and used lot occupancy, height, FAR, yards, courts, parking and loading, and if any zoning variance is being requested;

(D) a calculation of the total residential FAR square footage; and

(E) a calculation of the annual dollar amount of residential tax abatement being requested, showing total residential FAR square footage and tax abatement per square foot of total residential FAR square footage; and

(v) if a project is in Eligible Area # 3, then a letter from DMED stating that such tax abatement is needed to supplement, or is in lieu of, financial assistance granted by the D.C. Housing Finance Agency or the Department of Housing and Community Development.

5903.11

Within ten (10) business days of receipt of the owner's request letter and documents specified in section 5903.9 or 5903.10 of this chapter, DMED shall:

(a) transmit a reservation letter to the owner

(i) acknowledging that the property is eligible for the applicable tax abatement and,

(ii) stating that the District has reserved a tax abatement of a certain authorized annual dollar amount for the property based on the total residential FAR square footage submitted under 5903. 10(b)(iii). In addition, DMED shall also post biweekly such individual amounts and the then cumulative annual amounts reserved for all previously reserved properties on the DMED website and inform the owner of the deadlines as set forth in section 5903.4 and the additional documents which must be filed pursuant to section 5903.14 prior to DMED's issuance of a certificate approval letter.

(b) if an owner's request letter is not complete, transmit a letter to the owner requesting the required additional information, which shall not affect the date of the submission by the owner of its request to DMED for certification (unless such letter was grossly deficient) or otherwise negate DMED's acceptance of the original submission of the owner's request letter;

(c) transmit a letter of partial reservation and partial non-certification, if the amount of the tax abatement authorized for the property partially exceeds the amount of abatement remaining under caps set forth in section 5910 of this chapter; or

(d) transmit a letter of non-certification, if the amount of the tax abatement requested exceeds the caps set forth in section 5910 of this chapter.

DMED may extend the ten (10) day review period up to thirty (30) days for a project submitted pursuant to sections 5908 or 5909.

5903.12

A tax abatement authorized by the Act and reserved by DMED pursuant to section 5903.11 shall not be allowed:

(a) unless the first level of concrete for the project has been laid within six (6) months after the date the reservation letter required by section 5903.11(a) of this chapter is transmitted by DMED, if certification was requested pursuant section 5903.10 of this chapter; or

(b) if the project does not receive a certificate of occupancy within thirty (30) months after the date the reservation letter is transmitted by DMED pursuant to section 5903.11(a) of this chapter; provided, that DMED may extend the thirty (30) month period by up to an additional six (6) months if the building's construction has reached grade, as certified by the project architect and DCRA.

5903.13

Requests for certification shall be reviewed by DMED pursuant to section 5903.11 of this chapter in the order in which they were received, and without regard to the type of tax abatement for which certification is requested; provided, that such requests are for projects in an Eligible Area and include the documents specified in sections 5903.8 and 5903.10 or section 5903.9 of this chapter; provided further, however, that any project which has achieved the requirements of section 5903.5, 5903.6, or 5903.7 prior to the effective date of this chapter shall be given preference for review and certification of eligibility in order of the date the requirements of section 5903.5, 5903.6, or 5903.7 were achieved; and provided further, that this preference shall be applicable beginning on the date this chapter becomes effective and only for the first thirty (30) days thereafter. No request for certification will be accepted by DMED until the date this chapter becomes effective.

5903.14

Once the certificate of occupancy has been issued by DCRA and the owner has complied with sections 5903.9 or 5903.10, the owner shall submit the following documents to DMED:

(a) a copy of the certificate of occupancy to DMED;

(b) a calculation of the "as-built" total residential FAR square footage certified by the project architect; and

(c) a schedule of the dollar amounts for the property's twenty (20) semiannual tax abatements for the ten (10) year tax abatement period beginning with the first full six month period of the tax year (October 1 through March 31 or April 1 through September 30) following the issuance date of the certificate of occupancy.

5903.15

Upon receipt of the documents required under section 5903.14, DMED shall certify the total residential FAR square footage and within twenty (20) days:

(i) issue to the owner a letter certifying the tax abatement pursuant to D.C. Official Code § 47-857.02(a)(3),

(ii) notify OTR of the owner's eligibility for the annual dollar amount of residential tax abatement, provided that such annual dollar amount shall not exceed the amount reserved under 5903.11, and provide OTR with a schedule of the tax abatement dollar amounts to be reflected on for the property's twenty (20) semiannual tax bills issued during the ten (10) year tax abatement period, and

(iii) post such certification of a project's annual dollar amount of residential tax abatement on DMED's website according to its bi-weekly update schedule. OTR shall thereafter reflect the tax abatement in a real property tax bill issued for the first full six month period of the tax year (October 1 through March 31 or April 1 through September 30) following the issuance date of the certificate of occupancy; provided, that the tax abatement is a deduction that cannot be carried forward or carried back. Certification by DMED of the building's total FAR square footage shall be deemed to have been given upon the issuance of the certificate of occupancy by DCRA.

5903.16

In the event that a condominium regime is established at the property pursuant to District of Columbia law, and condominium units are sold, the tax abatement shall be prorated among the residential unit owners of the condominium in proportion to their percentage interest in the condominium regime, and the tax abatement shall accrue only to residential unit owners. DMED shall appropriately allocate the tax abatement to the individual units, based on a schedule of the dollar amounts for the semiannual tax abatements for the then remaining portion of the ten (10) year tax abatement period. The owner shall provide this schedule to DMED at the time of the unit sale, DMED shall certify such allocation to OTR and OTR shall notate the tax bills for such units to specifically reflect the abatement.

5902.17

The imposition of any penalty or disallowance of the tax abatement by DMED pursuant to the provisions of this chapter shall be subject to the notice and hearing provisions of Title 16 DCMR, Chapter 31 (the Civil Infractions Act of 1985).

D.C. Mun. Regs. tit. 10, r. 10-B5903

Final Rulemaking published at 50 DCR 553 (January 17, 2003)