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Historic Preservation Certifications for Federal Income Tax Incentives

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National Park Service, Interior.


Final rule.


The National Park Service (NPS) is amending its procedures for obtaining historic preservation certifications for rehabilitation of historic structures. Individuals and corporations must obtain these certifications to be eligible for tax credits from the Internal Revenue Service (IRS). This rule incorporates references to the revised sections of the Internal Revenue Code containing the requirements for obtaining a tax credit; replaces references to NPS's regional offices with references to its Washington Area Service Office (WASO); requires NPS to accept appeals for denial of certain certifications; and removes the certification fee schedule from the regulation. These latter two revisions provide an additional avenue for appeals and allow NPS to update fees by publishing a notice in the Federal Register as administrative costs change.


The rule becomes effective June 27, 2011.


Chief, Heritage Preservation Services Program, National Park Service, 1849 C Street, NW. (org code 2255), Washington, DC 20240.

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Michael J. Auer, National Park Service, 1849 C Street, NW. (org code 2255), Washington, DC 20240;; fax: 202-371-1616.

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Section 47 of Title 26 of the United States Code (the Internal Revenue Code), formerly Section 48(g), authorizes tax credits for qualified expenditures of funds for “certified rehabilitation” of “certified historic structures.” This section of the Internal Revenue Code designates the Secretary of the Interior as the authority for review of applications for certifications to verify: (a) That buildings undergoing rehabilitation are “certified historic structures,” and (b) that the rehabilitation preserves the overall historic character of the buildings, and therefore is a “certified rehabilitation.”

These approvals take the form of notifications or “certifications” by the Secretary of the Interior to the Secretary of the Treasury. In addition, section 170(h) of the Internal Revenue Code allows a Federal income tax deduction for the donation of interests in qualified real property for conservation purposes.

Section 170(h) also designates the Secretary of the Interior as the authority who receives applications and issues certifications verifying to the Secretary of the Treasury that the building or buildings contribute to the significance of a historic district.

The final rule removes outdated references to the Internal Revenue Code, and deletes references to the regional offices and substitutes the NPS Washington office in their place. The final rule also lifts the prohibition on appeals from the denial of preliminary certification for rehabilitation of a property that is not a certified historic structure. The final rule also removes the certification fee schedule from the regulation, and incorporates an explanation of the method by which we will determine the kind and amount of review fees to be charged in the future. Until a revised means of determining fees is decided upon, approved, and published, the 1984 fee schedule will remain in effect. The changes are technical rather than substantive in nature.

Public Comments

The proposed rule was published on October 15, 2010 (75 FR 63428) and was open for public comment for 60 days. We received three comments. One was fully in support of the changes. The second made several proposals on how fees charged by NPS for review of rehabilitation certification applications should be set and used by the agency. However, the rule does not change the fee schedule, but merely removes it from the text of the regulations (in accordance with standard government practice). The third suggests that the rule state that the program is administered by the National Park Service in general rather than by the Washington Area Service Office of the NPS. The agency believes it serves a useful purpose to inform the public where the program is administered within a large government agency. Accordingly, the agency does not believe that further change to the rule is warrantedStart Printed Page 30540

Compliance With Other Laws, Executive Orders, and Department Policies

Regulatory Planning and Review (Executive Order 12866)

The Office of Management and Budget has determined that this document is not a significant rule. We have made the assessments required by Executive Order 12866 and the results are available as a supporting document with the proposed rule at

(1) The results of the NPS cost/benefit analysis are that this rule will not have an effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. It is an agency-specific rule. No other Federal agency designates “certified historic structures” or “certified rehabilitations” for Federal income tax incentives.

(3) This rule does not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. This rule updates statutory authority, deletes references to regional offices and substitutes the NPS Washington office in their place, authorizes additional administrative appeals, and removes from the text of the regulations the fee dollar amounts and specific instructions for charging fees.

(4) This rule does not raise novel legal or policy issues.

Regulatory Flexibility Act (RFA)

The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act, (5 U.S.C. 601 et seq.).

The NPS threshold analysis as part of the NPS cost-benefit analysis concluded the proposed rule would generate positive benefits for all affected businesses with no negative impacts.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

a. Does not have an annual effect on the economy of $100 million or more. The rule merely updates statutory authority, revises references to NPS offices, authorizes additional administrative appeals, and deletes specific dollar amount of application review fees—changes that the Office of Management and Budget (OMB) has determined are purely technical in nature.

b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The rule does not impose any new requirements on building owners undertaking building rehabilitations.

c. Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. OMB has determined that the changes proposed in the rule are purely technical. Moreover, the tax incentives program involves purely domestic buildings and entities.

Unfunded Mandates Reform Act (UMRA)

This rule does not impose an unfunded mandate on State, local, or Tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local or Tribal governments or the private sector.

Although State Historic Preservation Offices receive applications for the Federal tax incentives and forward them to the NPS, with a recommendation, State participation in this program is funded through the Historic Preservation Fund administered by the NPS.

Takings (Executive Order 12630)

In accordance with Executive Order 12630, the rule does not have significant takings implications. Application for the Federal historic preservation tax incentives program is on a voluntary basis by owners seeking a benefit in the form of Federal income tax incentives. A takings implication assessment is not required.

Federalism (Executive Order 13132)

Under the criteria in Executive Order 13132, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism summary impact statement. The rule does not preempt or conflict with any State or local law. A Federalism impact statement is not required.

Civil Justice Reform (Executive Order 12988)

This rule complies with the requirements of Executive Order 12988. Specifically, this rule:

a. Meets the criteria requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

b. Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

Consultation With Indian Tribes (Executive Order 13175)

Under the criteria in Executive Order 13175, we have evaluated this rule and determined that it has no potential effects on Federally recognized Indian Tribes. The rule has no Tribal implications, and does not impose any costs on Indian Tribal governments.

Paperwork Reduction Act (PRA)

This rule contains information collection requirements and a submission under the Paperwork Reduction Act is required. OMB has approved the information collection and has assigned approval number 1024-0009, expiring on 03/31/2013. A Federal agency may not conduct or sponsor and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number. Part 1 of the application is used in requesting a certification of historic significance or non-significance and preliminary determinations. Part 2 of the application is used in requesting an evaluation of a proposed rehabilitation project or (in conjunction with a request for certification of completed work) a certification of a completed rehabilitation project. Information contained in the application is required to obtain a benefit. We estimate the burden associated with this information collection to be 4.6 hours per response including the time for reviewing instructions, gathering and maintaining data, and completing and reviewing the form. Direct your comments regarding this burden estimate or any aspect of this form to the Manager, Administrative Program Center, National Park Service, 1849 C Street, NW., Washington, DC 20240 and to the Office of Management and Budget, Paperwork Reduction Project Number 1024-0009, Washington, DC 20503.

National Environmental Policy Act (NEPA)

This rule is developed under the authority of the National Historic Preservation Act, particularly 16 U.S.C. 470a(a)(1)(A), and 26 U.S.C. 47 (Internal Start Printed Page 30541Revenue Code), and does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 is not required because the rule is administrative and procedural in nature and therefore is covered by a categorical exclusion under 43 CFR 46.205(b) and 46.210(i). We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under the National Environmental Policy Act.

Information Quality Act (IQA)

In developing this rule we did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 106-554).

Effects on the Energy Supply (Executive Order 13211)

This rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.

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List of Subjects in 36 CFR Part 67

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In consideration of the foregoing, 36 CFR part 67 is amended as follows:

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1. The authority citation for part 67 is revised to read as follows:

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Authority: 16 U.S.C. 470a(a)(1)(A); 26 U.S.C. 47 and 170(h).

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2. Revise the part heading to read as set forth above.

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3. In part 67, remove the word[s] in the “remove” column wherever they occur and add in their place the word[s] in the “add” column in the following table:

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regional officeWASO
regional officesWASO
Sec. 48(g)Sec. 47
section 48(g)section 47
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4. In § 67.1, revise the section heading, paragraph (a), and the first sentence of paragraph (b) to read as follows:

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Program authority and function.

(a) Section 47 of the Internal Revenue Code designates the Secretary as the authority for the issuance of certifications of historic district statutes and of State and local historic districts, certifications of significance, and certifications of rehabilitation in connection with certain tax incentives involving historic preservation. These certification responsibilities have been delegated to the National Park Service (NPS); the following office issues those certifications: National Park Service, Washington Area Service Office, Technical Preservation Services, Heritage Preservation Services (WASO), 1849 C Street, NW., Washington, DC 20240.

(b) NPS WASO establishes program direction and considers appeals of certification denials. * * *

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7. In § 67.4, revise paragraph (g) to read as follows:

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Certifications of historic significance.
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(g) For purposes of the other rehabilitation tax credits under section 47 of the Internal Revenue Code, properties within registered historic districts are presumed to contribute to the significance of such districts unless certified as nonsignificant by the Secretary. Owners of non-historic properties within registered historic districts, therefore, must obtain a certification of nonsignificance in order to qualify for those investment tax credits. If an owner begins or completes a substantial rehabilitation (as defined by the Internal Revenue Service) of a property in a registered historic district without knowledge of requirements for certification of nonsignificance, he or she may request certification that the property was not of historic significance to the district prior to substantial rehabilitation in the same manner as stated in paragraph (c) of this section. The owner should be aware, however, that the taxpayer must certify to the Secretary of the Treasury that, at the beginning of such substantial rehabilitation, he or she in good faith was not aware of the certification requirement by the Secretary of the Interior.

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8. In § 67.5 revise the section heading to read as follows:

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Standards for evaluating significance within registered historic districts.
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9. In § 67.7 revise the section heading to read as follows:

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Standards for rehabilitation.
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10. In § 67.10, revise paragraphs (a), (b), and (c)(3) to read as follows:

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(a) The owner or a duly authorized representative may appeal any of the certifications or denials of certification made under this part or any decisions made under § 67.6(f).

(1) Appeals must:

(i) Be in writing; e.g. letter, fax, or e-mail;

(ii) Be addressed to the Chief Appeals Officer, Cultural Resources, National Park Service, U.S. Department of the Interior, 1849 C Street, NW., Washington, DC 20240;

(iii) Be received by NPS within 30 days of receipt by the owner or a duly authorized representative of the decision which is the subject of the appeal; and

(iv) Include all information the owner wishes the Chief Appeals Officer to consider in deciding the appeal.

(2) The appellant may request a meeting to discuss the appeal.

(3) NPS will notify the SHPO that an appeal is pending.

(4) The Chief Appeals Officer will consider the record of the decision in question, any further written submissions by the owner, and other available information and will provide the appellant a written decision as promptly as circumstances permit.

(5) Appeals under this section constitute an administrative review of the decision appealed from and are not conducted as an adjudicative proceeding.

(b) The denial of a preliminary determination of significance for an individual property may not be appealed by the owner because the denial itself does not exhaust the administrative remedy that is available. The owner instead must seek recourse by undertaking the usual nomination process (36 CFR part 60).

(c) * * *

(3) Resubmit the matter to WASO for further consideration; or

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11. Revise § 67.11 to read as follows:

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Fees for processing certification requests.

(a) Fees are charged for reviewing certification requests according to the schedule and instructions provided in public notices in the Federal Register by NPS.

(b) No payment should be made until requested by the NPS. A certification decision will not be issued on an Start Printed Page 30542application until the appropriate remittance is received.

(c) Fees are nonrefundable.

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Dated: May 13, 2011.

Eileen Sobeck,

Acting Assistant Secretary for Fish and Wildlife and Parks.

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[FR Doc. 2011-12754 Filed 5-25-11; 8:45 am]