1. (a) Property eligibility:

   1. (1) The property must be listed on the California Register of Historical Resources or National Register of Historic Places.

      1. (A) Dual projects are qualified to apply for state tax credit when the signed NPS Part 1 “Evaluation of Significance” form pursuant to 36 CFR 67.4 is received by OHP.
      2. (B) Properties not listed on the California Register or National Register and applying for tax credit must first be nominated and listed using the criteria in either the California Code of Regulations Title 14 Division 3, Chapter 11.5 section 4851 and Public Resources Code 5024.1, or Title 36 Part 60.6 of the Code of Federal Regulations.

   2. (2) For properties not listed on the California Register, or the listing status is unclear, request clarification of the property listing status from the OHP:

      1. (A) Send an email to [email protected], using subject line “CR listing status request for <property address, city and county>”
      2. (B) In the body of the email, provide the full name of the correspondent, the historic name the building is known by (if any), and the year the building was built, if known. Photos of the property may be attached at the correspondent's option.
      3. (C) The OHP will contact the correspondent by email within 10 business days of the initial email receipt with the property listing status and further directions for listing the property.
   3. (3) Nomination and listing of a property in the California or National Register is a separate regulatory action which must be completed before applying for state tax credit. For information on the nomination procedure, refer to section 4853 or 36 CFR 60.6.

2. (b) Who may apply:

   1. (1) The fee simple owner of the property, or
   2. (2) If an application is made by someone other than the fee simple owner, the application must be accompanied by a written statement from the fee simple owner indicating that he or she is aware of the application and has no objection to the request for certification.

3. (c) How to apply:

   1. (1) Requests for rehabilitation tax credits shall use the state tax credit Application forms v. 5/24 incorporated by reference herein.

   2. (2) Applications for rehabilitation tax credit consist of two parts:

      1. (A) The Initial Project Application shall be used as confirmation that the subject property is listed in the California Register (Initial Project Application form v. 5/24 Section 1), to submit a description of the proposed rehabilitation and supplemental material (Initial Project Application form v. 5/24 Section 2), and to request a tax credit allocation (Initial Project Application form v. 5/24 Section 3).

         1. 1. An Amendment form template (Initial Project Application form v. 5/24 Section 2) is provided as part of the Initial Project Application v.5/24 to revise the project if needed.
      2. (B) The Completed Project Application (Completed Project Application form v. 5/24 Section 4) shall be used to confirm the rehabilitation project was completed as described in the Initial Project Application v. 5/24 and meets the Standards for Rehabilitation and certifies the Qualified Rehabilitation Expense (QRE) cost (Completed Project Application form v. 5/24 Section 5).

   3. (3) Certified historic structure projects receive a tax credit of 20% of the certified QRE costs. Applicants have the option to qualify for a 25% tax credit if the certified historic structure meets one of the following criteria:

      1. (A) The structure is located on federal surplus property, if obtained by a local agency under Section 54142 of the Government Code, on surplus state real property, as defined by Section 11011.1 of the Government Code, or on surplus land, as defined by subdivision (b) of Section 54221 of the Government Code.
      2. (B) The rehabilitated structure includes affordable housing for lower-income households, as defined by Section 50079.5 of the Health and Safety Code.
      3. (C) The structure is located in a designated census tract, as defined in paragraph (7) of subdivision (b) of Section 17053.73.
      4. (D) The rehabilitated structure is a part of a military base reuse authority established pursuant to Title 7.86 (commencing with Section 67800) of the Government Code.

      5. (E) The structure is a transit-oriented development that is a higher density, mixed-use development within a walking distance of one-half mile of a transit station.

         Specific criteria documenting 25% tax credit qualification are in Appendix D of the Instructions v. 5/24, incorporated by reference herein.

   4. (4) Applicants apply for one of three tax credit allocation categories:

      1. (A) Qualified Residences
      2. (B) Projects with QRE costs less than $1,000,000
      3. (C) Projects with QRE costs $1,000,000 or more

   5. (5) Each category is allocated specific budget amounts by the legislature every fiscal year. When the anticipated cost totals of every project in that category approach the total budgeted allocation amounts, OHP will announce that applications for that category are no longer accepted until the next fiscal year when allocations are budgeted again.

      As each tax credit funding category is exhausted, OHP will stop taking applications for that category. OHP will return any unprocessed applications and fees to the applicant.

      OHP will notify the public that the funding category is exhausted, and applications are no longer being accepted by OHP email lists and the OHP social media.

      When additional funding is available, OHP will begin accepting applications and will notify the public by OHP email lists and the OHP social media. Applications returned due to lack of allocation funding must resubmit their application.

   6. (6) OHP charges a fee to review the Initial Project Application and the Completed Project Application. The fee must be submitted with the application for the review to be performed. Fees will be calculated based on the rates published in the Instructions v. 5/24. Fees are nonrefundable except where provided in subsection (c)(4).
   7. (7) Applications received by OHP are logged in their order of arrival.
   8. (8) Application reviews are concluded within 30 days of receipt of a complete, adequately documented application submittal.
   9. (9) Applications and supplemental documentation submitted for state tax credit Qualified Residences only, may be submitted either electronically or as a hard copy at the applicant's discretion.
   10. (10) Directions for electronic submission are in the Application Instructions v. 5/24.
   11. (11) The OHP may request hard copies of some or all application materials on a case-by-case basis when needed for review purposes.
4. (d) Upon receipt of a complete Initial Project Application describing the rehabilitation project, the OHP shall determine if the project is consistent with the Standards for Rehabilitation. If the project does not meet the Standards for Rehabilitation, the applicant will be notified in writing and will be advised of necessary revisions to meet the Standards for Rehabilitation.
5. (e) If adequate documentation is not provided, the Applicant will be notified of the additional information needed to undertake the review. The review will be placed on “hold” until complete information is received, at which time the review period begins again.
6. (f) Application decisions by the OHP are conveyed in writing only to the applicant and to the CTCAC.
7. (g) Decisions are based on the descriptions contained in the application form and other supplementary material. In the event of any discrepancy between the application form and supplementary material submitted with it (such as architectural plans, drawings, specifications, etc.), the applicant shall be requested to resolve the discrepancy in writing. In the event the discrepancy is not resolved, the description in the application form shall take precedence.
8. (h) An applicant will not be held responsible for prior rehabilitation work that was undertaken by previous owners.
9. (i) Because the circumstances of each rehabilitation project are unique to the individual historic structure involved, previous certifications granted to other rehabilitations do not form a precedent and may not be relied on as applicable to other projects.

10. (j) For rehabilitation projects that are to be completed in phases over the alternate 60-month period allowed in Section 47 of the Internal Revenue Code (and Section 17053.91 of the California Revenue and Taxation Code), the Initial Project Application and supporting architectural plans and specifications should identify the project as a 60-month phased rehabilitation project and describe the number, order, and general scope of each phase. If the Initial Project Application clearly identifies the project as a phased rehabilitation, the OHP will consider the project in all its phases as a single rehabilitation.

    1. (1) Work undertaken in a later phase of a 60-month phased project that does not meet the Standards for Rehabilitation, whether or not submitted for review, may result in a denial of certification of the entire rehabilitation, considered in the context of the project as a whole.
11. (k) Qualified Residence projects are not eligible for phasing.
12. (l) Applicants must commence rehabilitation within 365 days after issuance of the tax credit allocation by the CTCAC. If rehabilitation is not commenced within this time period, the tax credit allocation shall be forfeited, and the credit amount associated with the tax credit allocation shall be treated as an unused allocation tax credit amount. Applicants shall provide documentation, such as a Notice to Proceed or a signed construction contract, to the OHP before the deadline expires.
13. (m) The reviewed Initial Project Application form is sent by the OHP to the CTCAC for their action in the order reviews are completed.

14. (n) Once a proposed project has been approved, substantive changes in the work from those described in the application must be brought promptly to the attention of the OHP using the Amendment form v. 5/24 to ensure continued conformance to the Standards for Rehabilitation. The OHP will notify the applicant whether the revised project continues to meet the Standards for Rehabilitation. Amendments do not incur any additional fees.

    1. (1) Dual projects submitting Amendments use the federal Amendment/Advisory Determination Form pursuant to 36 CFR 67.6(d).

Note: Authority cited: Sections 17053.91 and 23691, Revenue and Taxation Code; and Section 5024.6, Public Resources Code. References: Secretary of the Interior's Standards for Rehabilitation, Part 67.7 of Title 36 of the Code of Federal Regulations; and Sections 17053.91 and 23691, Revenue and Taxation Code.

History

1. New section filed 11-13-2024; operative 11-13-2024 pursuant to Government Code section 11343.4(b)(3) (Register 2024, No. 46).