HISTORIC PRESERVATION CERTIFICATION
Filed with the secretary of state on
These rules take effect immediately upon filing with the secretary of state unless adopted under section 33, 44, or 45a(9) of the administrative procedures act of 1969, 1969 PA 306, MCL 24.233, 24.244, or 24.245a. Rules adopted under these sections become effective 7 days after filing with the secretary of state.
(By authority conferred on the state historic preservation office by sections 266a and 676 of the income tax act of 1967, 1967 PA 281, MCL 206.266a and 206.676)
R 206.201, R 206.202, R 206.203, R 206.204, R 206.205, R 206.206, R 206.207, R 206.208, R 206.209, R 206.210, R 206.211, and R 206.212 are added to the Michigan Administrative Code, as follows:
Rule 201. The purpose of these rules is to prescribe the procedures whereby a qualified taxpayer may request all of the following in order to qualify for a tax credit under the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.713:
(a) A certification of historic significance.
(b) Certification of a rehabilitation plan.
(c) Certification of a completed rehabilitation of a historic resource.
Rule 202. (1) As used in these rules:
(a) “Act” means the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.713.
(b) “Applicant” means a qualified taxpayer or taxpayers making application for the tax credits.
(c) “Compliance period” means the 5-year period beginning on the date a certificate of completed rehabilitation is issued.
(d) “Federal Secretary” means the United States Secretary of the Interior, or a designee authorized by the Secretary, in the course of carrying out the Secretary's responsibilities to certify historic significance, rehabilitation plans, and rehabilitation work under federal law.
(e) "Inspection" means a visit by an authorized representative of the office to a certified or potentially certified historic resource for the purposes of reviewing and evaluating the significance of the historic resource or the ongoing or completed rehabilitation or for the purpose of determining whether an unapproved alteration to the completed rehabilitation was made during the 5-year compliance period.
(f) “In writing” means written comments provided via first class, certified mail, or e-mail.
(g) “Project types” means owner-occupied residential resources, small nonresidential historic resources, and large nonresidential historic resources as defined in the act.
(h) “Property” means 1 or more historic resources located on 1 or more parcels under the control of a common owner where the structures are judged by the office to have been functionally related historically to serve an overall purpose, such as a mill complex or a residence and carriage house.
(i) "Rehabilitation" means the process of returning historic resource to a useful state, through repair or alteration, which makes possible an efficient or a functional use while preserving the portions and features of the historic resource that are significant to its historical, architectural, and cultural values.
(j) “Returned to service” means the date on which, based on all the facts and circumstances, either of the following occur:
(i) The historic resource has reached a degree of completion that would permit its operation at substantially its designed level, even though it is not in operation.
(ii) The historic resource is, in fact, in operation at substantially its designed level.
(k) "Standards and Guidelines" mean the Federal Secretary's standards for rehabilitation and guidelines for rehabilitating historic buildings set forth in, and authorized by, 36 CFR 67.
(l) "Tax credit" means a credit against a federal tax as allowed by section 47(a)(2) of the internal revenue code of 1990, 26 USC section 47, or against a state tax as allowed by section 266a or section 676 of the act, MCL 206.266a and 206.676.
(m) “Year” means a calendar year beginning January 1 and ending December 31.
(2) A term defined in the act has the same meaning when used in these rules.
Rule 203. A qualified taxpayer who owns or holds a long-term lease for a resource that they not only believe to be a historic resource but also, if rehabilitated, could qualify them for a tax credit, may communicate with the office and request information on a preliminary basis with respect to whether the resource appears to be historic, whether a rehabilitation plan appears to conform with standards and guidelines, or whether completed rehabilitation appears to conform with standards and guidelines. Preliminary comments are not binding on the office, nor do they replace any formal reviews prescribed by these rules.
Rule 204. (1) An applicant shall first submit an application to the office for certification of historic significance of the possible historic resource. If the applicant is eligible to claim a federal tax credit, or both federal and state tax credits, then they shall apply on a historic preservation certification application prescribed by the National Park Service and also file a state part 1 application, remit the state fee as prescribed in R 206.209, and provide any other project information prescribed by the office. If the applicant is eligible to claim a state tax credit exclusively, then they shall apply only on a historic preservation certification application state part 1, remit the state fee as prescribed in R 206.209, and provide any other project information prescribed by the office. An applicant may seek state part 1 certification on the basis that a property is individually eligible for listing in the National Register of Historic Places.
(2) A state part 1 application must include all of the following:
(a) Applicant name, business entity name, mailing address, phone number, and email of each owner or long-term lessee, if any, seeking the credit.
(b) Common modern name and historic name, if any, of the resource.
(c) Address of the resource.
(d) Name of any historic district in which the resource is located, if applicable.
(e) For any historic resources not already individually listed in the National Register of Historic Places, current photographs of the resource detailing the following:
(i) The historic resource, site, and landscaping before alteration.
(ii) The historic resource in conjunction with adjacent properties and structures along the streetscape.
(iii) All interior spaces, such as a room, and each significant interior feature.
(f) For any historic resource not already individually listed in the National Register of Historic Places or seeking a preliminary determination of individual eligibility, all of the following must be provided:
(i) A brief description of the resource, including major alterations, distinctive features and spaces, and dates of construction activity.
(ii) A brief statement of significance, summarizing how the resource reflects historical values, including the values that may give a designated historic district its distinctive character.
(iii) A map clearly locating the resource in a local unit or in an established historic district.
(iv) A letter or letters from the office indicating that all of the following has been met:
(A) A National Register of Historic Places preliminary questionnaire has been received by the office.
(B) The National Register of Historic Places preliminary questionnaire has been reviewed by the office.
(C) The resource appears to be individually eligible for listing in the National Register of Historic Places.
(g) The social security number or federal taxpayer identification number of each applicant.
(h) The signature of each applicant.
(i) A completed declaration of location form if the resource is located within a local historic district.
(j) Any other information requested by the office.
(k) The state review fee as prescribed in R 206.209.
(3) In addition to the state part 1 application, an applicant shall also submit those attachments that the office deems necessary to perform its evaluation and determination. The office shall notify an applicant, in writing, if additional information or materials are required and the office shall refrain from processing the application until the requested information or materials have been furnished by the applicant to the satisfaction of the office.
(4) Upon receipt of a complete and adequately documented application, the office shall review the submission to determine the eligibility of a possible historic resource for participation in the federal or state tax credit program, or both.
(5) Within 120 days of its receipt of a complete application, the office shall provide written notification to the applicant of its determination on the application for historic significance certification.
Rule 205. (1) To initiate a review of a rehabilitation plan for certification purposes, an applicant with an approved state part 1 application shall submit a state part 2 application to the office for the historic resource. An applicant may submit their state part 1 and 2 application simultaneously; however, the state part 2 application will not be reviewed until the office has determined that the state part 1 applications is complete, and that the property is a qualified historic resource. If the applicant is eligible to claim a federal tax credit or both federal and state tax credits, then they shall apply on a historic preservation certification application prescribed by the National Park Service and also file a state part 2 application, remit the state fee as prescribed in R 206.209, and provide any other project information prescribed by the office. If the applicant is eligible to claim a state tax credit exclusively, then they shall apply on a historic preservation certification application state part 2, remit the state fee as prescribed in R 206.209, and provide any other project information prescribed by the office and also a verification of state equalized value form, as required by the act.
(2) The office will accept only 1 state part 2 application per property at a time. If multiple state part 2 applications for a property are received, the first complete and properly documented state part 2 application received by the office will be accepted and processed for review. Any additional state part 2 applications received by the office for a property will be deemed invalid.
(3) Applications for projects with National Park Service part 2 approvals, work carried out or, that were complete and returned to service before the effective date of the legislation will not be accepted.
(4) An applicant may file a state part 2 application that includes work already completed. The office will determine if the completed work is acceptable on its own and in conjunction with the proposed work included in the state part 2 application. In no case may a state part 2 application include any work that was completed more than 1 year prior to the date a state part 2 application was submitted to the office. If a state part 2 application includes previously completed work, and is awarded a preapproval letter, the 8-year period for completion of the project will be reduced to 7 years and the period to submit the state part 3 application reduced to the earliest of the following to occur:
(a) Eight years from the date of the preapproval letter.
(b) One year after the historic resource is returned to service.
(5) A state part 2 application must include all of the following:
(a) Applicant name, business entity name, mailing address, phone number, and email of each owner or long-term lessee, if any, seeking the credit.
(b) Common modern name and historic name, if any, of the resource.
(c) Address of the resource.
(d) Photographs deemed sufficient by the office to document the interior and exterior appearance of the historic resource, its site, and environment before the commencement of rehabilitation.
(e) Verification of the resource's state equalized value as required by the act.
(f) Plans and specifications for the proposed rehabilitation work.
(g) Any plans for adjacent, attached, or related new construction.
(h) The social security number or federal taxpayer identification number of each applicant.
(i) Any additional documentation, such as window surveys or masonry cleaning specifications, requested by the office.
(j) The signature of each applicant.
(k) Any other documents the office or its governing agency require or deem necessary.
(l) The state review fee as prescribed in R 206.209.
(6) Upon receipt of a complete and adequately documented state part 2 application, the office shall review the submission to determine whether the applicant's rehabilitation plan meets the standards and guidelines. If the office deems that additional information or documentation is needed to evaluate the submission, then the office shall notify the applicant in writing and shall refrain from processing the application until the information or documents, or both, have been furnished. To qualify for certification, a proposed rehabilitation plan must comport with each element of the standards and guidelines, to the extent applicable.
(7) Within 120 days of its receipt of a complete state part 2 application, the office shall notify the applicant in writing whether the rehabilitation plan meets the standards and guidelines. If the office determines that the rehabilitation plan meets the standards and guidelines, the office will issue a preapproval letter to the applicant. If the office determines that the rehabilitation plan does not meet the standards and guidelines, it shall advise the applicant of any revisions necessary for the rehabilitation plan to meet the standards and guidelines. An applicant may submit a revised rehabilitation plan to the office. The office shall refrain from processing the application further until the necessary revisions have been made and furnished.
(8) In the event that all available credits have been awarded, all approved state part 2 applications not receiving a preapproval letter will be granted priority status in accordance with the provision of R 206.206.
(2) In any year, if the maximum amount of credit allocated to a specific project type or the annual maximum credit limit for the program is reached, the office will do the following:
(a) Notify the public via its website that it will no longer accept any additional applications for that project type or the program for the remainder of the year.
(b) Assign a priority number to all remaining complete applications that did not receive a preapproval letter. Priority numbers will be assigned to each application based on the date the completed application was received by the office.
(c) Allow applicants who submitted incomplete applications to submit a revised application. In the event a revised application is deemed complete, it will be assigned a priority number based on the date the revised complete application was received by the office.
(d) In the last month of each year, the office will review all applications that have been assigned priority numbers and based on the lowest priority number, contact applicants to verify if they are still seeking credit for their project. If so, the office will do the following:
(i) Issue a preapproval letter for any recaptured, unclaimed, or returned credits from previous years to other applications within that project type based on priority numbers. If there are no applications within that specific project type that will accept the recaptured, unclaimed, or returned credit, then it must be made available to any approved application, regardless of project type, based on priority number.
(ii) Notify any applicants who have not received a preapproval letter and that have a priority number that was issued at least 2 years prior to the review date that their application has expired, they will no longer be eligible for any available credit, and they will need to submit a new application if they want to continue to seek a credit.
(iii) Determine which projects will receive funding in the next year based on priority number and project types.
(iv) Post on its website the total amount of credit if any per project type that will be available to new applications in the subsequent year.
(3) On the first business day of the new year, the office shall begin accepting new applications for that year for all project types with available credits until any or all conditions in subrule (2) of this rule are met.
R 206.207 Certification; rehabilitation plan amendments.
Rule 207. (1) To initiate a review of a rehabilitation plan amendment for certification purposes, an applicant with an approved state part 1 and 2 application shall submit a state amendment application to the office for the historic resource. If the applicant is eligible to claim a federal tax credit or both federal and state tax credits, then they shall apply on a historic preservation certification application amendment form as prescribed by the National Park Service and also file a state application amendment form and any other project information prescribed by the office. If the applicant is eligible to claim a state tax credit exclusively, then they shall apply only on a historic preservation certification application amendment form prescribed by the office.
(2) An application for rehabilitation plan amendment must include all of the following:
(a) Applicant name, business entity name, mailing address, phone number, and email of each owner or long-term lessee, if any, seeking the credit.
(b) Common modern name and historic name, if any, of the resource.
(c) Address of the resource.
(d) Photographs deemed sufficient by the office to document the condition and appearance of the area or areas affected by the proposed work scope modifications.
(e) A written description of the proposed changes or new work.
(f) Plans and specifications for the amended rehabilitation work.
(g) Any plans for adjacent, attached, or related new construction as appropriate.
(h) The social security number or federal taxpayer identification number of each applicant.
(i) Any additional documentation, such as window surveys or masonry cleaning specifications, requested by the office.
(j) The signature of each applicant.
(k) Any other documents the office or its governing agency require or deem necessary.
Rule 208. (1) To initiate a review of a completed rehabilitation, an applicant with an approved state part 1 and 2 application shall submit a state part 3 application to the office. If the applicant is eligible to claim a federal tax credit or both federal and state tax credits, then they shall apply on a historic preservation certification application prescribed by the National Park Service and also file a state part 3 application, remit the state fee as prescribed in R 206.209, and provide any other project information prescribed by the office. If the applicant is eligible to claim a state tax credit exclusively, then they shall file the historic preservation certification application state part 3, remit the state fee as prescribed in R 206.209, and provide any other project information prescribed by the office.
(2) For an historic resource with a preliminary determination of eligibility for listing in the National Register of Historic Places state part 1, the listing process must be completed before the state part 3 application is submitted.
(3) Except as stipulated in R 206.205(4), the state part 3 application must be submitted within 9 years after the date of the preapproval letter or within in 1 year of the date that the historic resource is returned to service, whichever occurs first. If the state part 3 application is not submitted within the required time frame, the office will rescind the preapproval letter, notify the applicant in writing of the rescission, and the applicant will no longer be eligible for credits relating to the rescinded preapproval letter.
(4) The state part 3 application must include all of the following:
(a) Applicant name, business entity name, mailing address, phone number, and email of each owner or long-term lessee, if any, seeking the credit.
(b) Common modern name and historic name, if any, of the resource.
(c) Address of the resource.
(d) Date the preapproval letter was issued.
(e) The project completion date.
(f) The social security number or federal taxpayer identification number of each applicant.
(g) A signed statement that the completed rehabilitation is consistent with the approved state part 2 application and meets the standards and guidelines.
(h) Photographs adequate to document the completed rehabilitation.
(i) For an historic resource with a preliminary determination of eligibility for listing in the National Register of Historic Places, the date the historic resource was officially listed.
(j) The state review fee as prescribed in R 206.209.
(k) All economic data as described in the legislation.
(l) Assignment/Reassignment form or forms if the credits are being transferred.
(5) When filing a state part 3 application, an applicant may request additional credit in excess of the amount stated in the preapproval letter. Requests for additional credit in excess of the amount stated in the preapproval letter will be treated as a new credit request and will be given a new priority level based on the date of the request. Before the end of the year in which the state part 3 application was received the office shall either approve the applicant’s request for additional credits if any are available or approve the existing state part 3 application based on the amount of credit listed in the applicant’s preapproval letter.
(6) Upon receipt of a complete and adequately documented request for certification of completed work and other items as described in this rule, the office shall perform a review to determine whether the completed rehabilitation conforms with the rehabilitation plans and plan amendments, if any, and meets the standards and guidelines. The office shall determine conformance to the standards and guidelines on the basis of application documentation and other available information showing the historic resource as it existed in its historic setting. To qualify for certification, the completed rehabilitation work shall comport with each element of the standards and guidelines, to the extent applicable.
(7) Within 120 days of the receipt of the state part 3 application, the office shall notify the applicant of its determination in writing. The office may require changes in the completed rehabilitation that enable it to meet the standards and guidelines. The office shall refrain from processing the state part 3 application any further until the required changes in the completed rehabilitation have been made by the applicant.
(8) If the office determines that the completed rehabilitation meets the standards and guidelines, then the office shall notify both the applicant and the Michigan department of treasury of its determination.
Rule 209. (1) An applicant who submits a historic preservation certification application prescribed by the National Park Service by itself, or in conjunction with a historic preservation certification application prescribed by the office, is responsible for the payment of fees to the National Park Service in the amount prescribed in 36 CFR 67.11.
(2) An applicant who submits a historic preservation certification application prescribed by the office, or in conjunction with a historic preservation certification application prescribed by the National Park Service, is responsible for payment of fees described in subrule (1) of this rule as well as those fees specified in subrules (3), (4), and (5) of this rule. The office shall not provide an applicant with any certification decision until the appropriate fee has been received. Upon request of the office, the applicant shall remit the appropriate fee as directed by the office. All fees are nonrefundable.
(3) An applicant shall remit the following state part 1 fees to the office based on property type:
(a) Owner-occupied residential properties: $50.00.
(b) All other properties: $100.00.
(4) An applicant shall remit the following state part 2 fees to the office based on property type and amount of qualified expenditures:
(a) Owner-occupied residential properties:
(i) One hundred dollars if anticipated qualified expenses are $20,000.00 or less.
(ii) Two percent of the anticipated credit if anticipated qualified expenses are greater than $20,000.00.
(b) All other properties:
(i) Two hundred dollars if anticipated qualified expenses are $40,000.00 or less.
(ii) Two percent of the anticipated credit if anticipated qualified expenses are greater than $40,000.00.
(5) An applicant shall remit the following state part 3 fees to the office based on the following fee schedule:
(a) Owner-occupied residential properties:
(i) One hundred dollars if anticipated qualified expenses are $20,000.00 or less.
(ii) Two percent of the credit received, not to exceed the preapproval letter credit if anticipated qualified expenses are greater than $20,000.00.
(b) All other properties:
(i) Two hundred dollars if anticipated qualified expenses are $40,000.00 or less.
(ii) Two percent of the credit received, not to exceed the preapproval letter credit if anticipated qualified expenses are greater than $40,000.00.
(6) Sale or transfer agreement processing: $1,000.00.
Rule 210. (1) The office may conduct an inspection of a historic resource during the rehabilitation process and during the compliance period.
(2) The office may, after giving the qualified taxpayer 30 days' written notice, issue a revocation of a certificate of completed rehabilitation if the office determines that a rehabilitation was either not undertaken in conformity with the standards and guidelines or, if during the compliance period, either the historic resource was damaged, altered, or substantially changed or the applicant undertook further unapproved work inconsistent with the standards and guidelines. The office shall notify the Michigan department of treasury of any revocation issued under this subrule. The Michigan department of treasury shall determine the Michigan tax consequences to the qualified taxpayer of a revocation of certification in accordance with section 266a(9) of the act, MCL 206.266a.
Rule 211. (1) An applicant may appeal a denial of an application for certification submitted under these rules. If the appeal involves a historic preservation certification application prescribed by the National Park Service by itself, or in conjunction with a historic preservation certification application prescribed by the office, then the appellant shall follow the procedures set forth in 36 CFR 67.10 to appeal the federal portion of the credit. If the appeal involves an application for certification prescribed by the office by itself, then the applicant shall follow the procedures prescribed in this rule for the state credit.
(2) To file an appeal under this rule, an applicant shall submit a written appeal to the state historic preservation officer, c/o the office, within 60 days from the date of the denial. The request shall state “APPEAL” on its header, state the reason or reasons the applicant believes the denial should be reversed, and include all information, records, and other materials the applicant wants considered.
(3) The state historic preservation officer, or their delegate, shall schedule a hearing. Once a final order has been issued, an applicant is deemed to have exhausted all of their administrative remedies.
Rule 212. (1) If, during the compliance period, a qualified taxpayer wishes to either sell or transfer the qualified taxpayer’s interest in the historic resource, they shall notify the office and the Michigan department of treasury in writing of their intent at least 6 months prior to the proposed sale or transfer.
(2) The qualified taxpayer shall do all of the following:
(a) Provide at their own expense, and in a form and manner acceptable to the office, all of the following information, in addition to their notice:
(i) Copy of the executed purchase and sale agreement.
(ii) Proof of notification to the Michigan department of treasury.
(iii) A copy of the deed to the property.
(iv) The name and project number of the project that received the credits.
(v) The name and address of the property being transferred.
(vi) The legal description of the property.
(vii) The name and contact information for all qualified taxpayers that received credits resulting from the previous state part 3 certification.
(viii) The name and contact information for the new owner.
(ix) The date the state part 3 certification for the project was issued.
(x) The total amount of state credits received by the project.
(xi) Any additional document or information requested by the office.
(b) Execute the historic resource transfer agreement.
(c) Remit the fee in accordance with rule R 206.209(6).
(3) Upon receipt of a fully executed historic resource transfer agreement, the office or their designee shall do all the following:
(a) Record the historic resource transfer agreement with the register deeds having jurisdiction over the property.
(b) Return a fully executed and recorded copy of the historic resource transfer agreement to the qualified taxpayer and the new owner.