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OFFICE OF THE DEPUTY MAYOR FOR PLANNING AND ECONOMIC DEVELOPMENT
NOTICE OF FINAL RULEMAKING
The Deputy Mayor for Planning and Economic Development, pursuant to authority set forth in the NoMA Residential Development Tax Abatement Act of 2009, effective July 7, 2009 (D.C. Law 18-10; D.C. Official Code §§ 47-859.01 et seq.), and Mayor’s Order 2010-61, dated April 6, 2010, hereby gives notice of the adoption of the following amendment to Title 10-B (Planning and Development) of the District of Columbia Municipal Regulations (DCMR). The purpose of the rulemaking is to add a new Chapter 62 to Title 10-B of the DCMR to provide tax abatements as incentives for the production of new housing in the NoMA area of the District of Columbia.
A Notice of Proposed Rulemaking was published in the D.C. Register on May 21, 2010 at 57 DCR 4440. No comments were received, and there have been no substantive changes made to proposed rulemaking.
Title 10-B of the DCMR is amended by adding a new Chapter 62 to read as follows:
CHAPTER B62 NoMA TAX ABATEMENTS FOR
NEW RESIDENTIAL DEVELOPMENT PROGRAMSecs.
B6200 General Program Description
B6201 Purposes
B6202 Requirements for Tax Abatements for New Residential Developments
B6203 Tax Abatements for All New Housing Projects in NoMA Area
B6204 Abatement Caps
B6299 Definitions
B6200 GENERAL PROGRAM DESCRIPTION
B6200.1 The NoMA Tax Abatements for New Residential Development Program is intended to provide tax abatements as incentives for the production of new housing in the NoMA area of the District of Columbia.
B6201 PURPOSE
B6201.1 The purpose of this chapter is to implement the NoMA Residential Development Tax Abatement Act of 2009 (D.C. Law 18-10; D.C. Official Code §§ 47-859.01 et seq.).
B6202 REQUIREMENTS FOR TAX ABATEMENTS FOR NEW RESIDENTIAL DEVELOPMENTS
B6202.1 As a prerequisite to a property receiving a tax abatement under this chapter, the provisions of this section must be satisfied.
B6202.2 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 established by the Tax Increment Financing Authorization Act of 1998 (D.C. Law 12-143; D.C. Official Code § 2-1217.01 et seq.).
B6202.3 A tax abatement under this chapter shall not be allowed for a property which receives relief as the result of the Distressed Properties Improvement Program under the Rental Housing Act of 1985 (D.C. Law 6-10; D.C. Official Code § 42-3508.02).
B6202.4 A tax abatement under this chapter shall not be allowed for a property owned by the District of Columbia or one of its instrumentalities as of January 1, 2008.
B6202.5 A tax abatement shall not be allowed unless the owner obtains the documents required by sections B6202.7 or B6202.9 of this chapter and submits to DMPED the letter and other documents required by section B6202.10 of this chapter prior to December 31, 2012.
B6202.6 A tax abatement shall only be allowed if the building permit for the project’s superstructure was issued after January 1, 2008.
B6202.7 Except as provided in subsection B6202.8, 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 DMPED 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 DMPED that the first level of concrete has been laid shall be given upon the submission by the owner of the standard test reports to DCRA. DMPED shall issue a certification letter regarding the first layer of concrete being laid within ten (10) business days after receipt of a written request from the owner and receipt of the standard concrete tests reports by DCRA, if such reports are required by DCRA.
B6202.8 If an owner has obtained a certificate of occupancy prior to requesting certification of a tax abatement, section B6202.7 shall not apply.
B6202.9 If a certificate of occupancy has been issued to the owner, the owner may submit a letter to DMPED requesting a tax abatement certification that the property is eligible for a certain annual dollar amount of residential tax abatement as set forth in the NoMA Residential Development Tax Abatement Act of 2009 (D.C. Law 18-10; D.C. Official Code §§ 47-859.01 et seq.). The letter shall include the information required by section B6202.10(a)(i) - (iii), (v), (vi), (vii) and (viii), along with the documents required by section B6202.10(b)(iv)(A), (B) and (E), and section B6202.14.
B6202.10 (a) If a certificate of occupancy has not been issued to the owner, the owner may submit a letter to DMPED requesting a tax abatement certification that the property is eligible for a certain annual dollar amount of residential tax abatement as set forth in the NoMA Residential Development Tax Abatement Act of 2009 (D.C. Law 18-10; D.C. Official Code §§ 47-859.01 et seq.).
(b) The owner’s request letter shall include the following information about the project:
(1) The address of the project;
(2) The square and lot number;
(3) The proposed number of residential units;
(4) A statement that the documents required by subsection B6202.7 of this chapter have been obtained and are attached;
(5) The total residential FAR square footage;
(6) The annual dollar amount of residential tax abatement requested;
(7) A statement that no financing is being provided under the Tax Increment Financing program referenced in subsection B6202.2 of this chapter; and
(8) A statement that no relief is being provided under the Distressed Properties program referenced in subsection B6202.3 of this chapter;
(c) The owner’s request letter shall include the following attachments:
(1) Three (3) dated photographs of the project taken within the ten (10) day period that precedes the date of submission of the owner’s request letter. 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;
(2) The documents specified by section B6202.7 (a) or (b) of this chapter;
(3) Certification of the total residential FAR square footage certified by the project architect; and
(4) The following items:
(A) An area map showing the eligible area boundary and the project by location arrow;
(B) A scaled site plan with building footprint. The site plan shall be submitted in both full size and eleven inch (11″) by seventeen inch (17″) format;
(C) A tabulation of the zoning data for the project prepared and certified by the project architect, which shall include both the allowed and used lot occupancy, height, FAR, yards, courts, parking, and loading, and an indication of any zoning variance that 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.
B6202.11 Within fifteen (15) business days after receipt of the owner’s request letter and documents specified in subsections B6202.9 or B6202.10 of this chapter, DMPED shall:
(a) Transmit a reservation letter to the owner stating:
(1) Whether the property is eligible for the applicable tax abatement;
(2) Whether the District of Columbia has reserved a tax abatement for the project; and
(3) If the District of Columbia has reserved a tax abatement for the property, the authorized annual dollar amount for the property.
(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 DMPED for certification (unless such letter was significantly deficient);
(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 B6204 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 B6204 of this chapter.
B6202.12 A tax abatement authorized by the Act and reserved by DMPED pursuant to section B6202.11 shall not be allowed:
(a) Unless the first level of concrete for the project has been laid either before, or within six (6) months after, the date the reservation letter is transmitted by DMPED under subsection B6202.11 of this chapter, if certification was requested pursuant section B6202.9 of this chapter; or
(b) If the project does not receive a certificate of occupancy within thirty-six (36) months after the date the reservation letter is transmitted by DMPED pursuant to section B6202.11 of this chapter; provided, that DMPED may extend the thirty-six (36) months 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.
B6202.13 Valid and complete requests for certification shall be reviewed by DMPED pursuant to section B6202.11 of this chapter in the order in which they are received; provided, however, that any project which has achieved the requirements of section B6202.7, B6202.9, or B6202.10 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 sections B6202.9 or B6202.10 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.
B6202.14 Once the certificate of occupancy has been issued by DCRA and the owner has complied with sections B6202.9 or B6202.10, the owner shall submit the following documents to DMPED:
(a) A copy of the certificate of occupancy;
(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 (6) 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.
B6202.15 Upon receipt of the documents required under section B6202.14, DMPED shall certify the total residential FAR square footage and, within twenty (20) business days:
(a) Issue to the owner a letter certifying the tax abatement pursuant to D.C. Official Code § 47-8579.03; and
(b) 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 B6202.11, and provide OTR with a schedule of the tax abatement dollar amounts to be reflected on the property’s twenty (20) semiannual tax bills issued during the ten (10) year tax abatement period.
B6202.16 After receiving notification from DMPED under subsection B6202.15, OTR shall reflect the tax abatement in a real property tax bill issued for the first full six (6) 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.
B6202.17 If 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. DMPED shall 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 DMPED at the time of the unit sale, DMPED shall certify such allocation to OTR, and OTR shall notate the tax bills for such units to specifically reflect the abatement.
B6202.18 The imposition of a penalty or disallowance of the tax abatement by DMPED pursuant to the provisions of this chapter shall be subject to the notice and hearing provisions of the Civil Infractions Act of 1985 (D.C. Law 6-42; D.C. Official Code §§ 2-1801.01 et seq.), and its implementing regulations.
B6203 TAX ABATEMENTS FOR ALL NEW HOUSING PROJECTS IN NOMA AREA
B6203.1 Subject to the requirements of section B6202 of this chapter, an annual abatement of the real property tax imposed pursuant to D.C. Official Code § 47-811 for an eligible property shall be allowed in an amount computed as one dollar and fifty cents ($1.50) multiplied by the building’s total residential FAR square footage as certified by the project architect and DMPED pursuant to subsection B6202.15 of this chapter; provided, that:
(a) If a certificate of occupancy permits the use of only part of the residential portion of the eligible property, the amount of the abatement shall be computed as one dollar and fifty cents ($1.50) per each residential FAR square foot that is subject to the certificate of occupancy.
(b) The tax abatement for an eligible real property allowed by this section shall expire at the end of the tenth (10th) tax year after the abatement was first reflected in a real property tax bill issued pursuant to section B6202.14 of this chapter; and
(c) If, during a tax year for which the tax abatement is authorized by this section the property for which the abatement was granted contains fewer than ten (10) dwelling units, the abatement shall not be allowed, such disallowance to become effective during the first six (6) month period following the date on which such property first contained less than ten (10) dwelling units.
B6204 ABATEMENT CAP
B6204.1 DMPED may approve up to five million dollars ($5,000,000) in annual tax abatements for the Eligible Area, up to the fifty million dollars ($50,000,000) cumulative tax abatement cap.
B6299 DEFINITIONS
B6299.1 When used in this chapter, the following terms and phrases shall have the meanings ascribed:
“Act” - the NoMA Residential Development Tax Abatement Act of 2009, effective July 7, 2009 (D.C. Law 18-10; D.C. Official Code §§ 47-859.01 et seq.).
“Certificate of occupancy” - the certificate of occupancy which permits the use of all or part of the residential areas of the building.
“Certified by the project architect” - the architect has affixed his or her stamp to the document.
“DCRA” - the Department of Consumer and Regulatory Affairs.
“DMPED” - the Deputy Mayor for Planning and Economic Development or designee.
“Eligible Area” - those portions of Wards 5 and 6 which comprise the geographic area defined by a line that starts at the center of the street at the intersection of Massachusetts Avenue, N.E., and 1st Street, N.E.; continuing north along the center line of 1st Street, N.E., to the center line of H Street, N.E.; continuing east along the center line of H Street, N.E., to the center line of 2nd Street, N.E.; continuing north along the center line of 2nd Street, N.E., to the center line of K Street, N.E.; continuing east along the center line of K Street, N.E., to the center line of 3rd Street, N.E.; continuing north along the center line of 3rd Street, N.E. (and including Square 0774, Lot 0058), to the center line of M Street, N.E.; continuing east along the center line of M Street, N.E., to 4th Street, N.E.; continuing along the center line of 4th Street, N.E., to the center line of Florida Avenue, N.E.; continuing northwest along the center line of Florida Avenue, N.E., until it crosses the WMATA rail line; continuing northeast along the boundary of the WMATA rail line until it crosses R Street, N.E.; continuing west along the center line of R Street, N.E., to Eckington Place, N.E.; continuing south along the center line of Eckington Place, N.E., to the center line of Q Street, N.E.; continuing west along the center line of Q Street, N.E. (and including Square 3519, lots 0043, 0063, and 0070), to the center line of North Capitol Street (but excluding Square 3516, lots 0104 through 0114 and 0118 through 0133, and 0807); continuing south along the center line of North Capitol Street to the center line of Eye Street N.W.; continuing west along the center line of Eye Street, N.W., to the center line of New Jersey Avenue, N.W.; continuing southeast along the center line of New Jersey Avenue, N.W., to the center line of Massachusetts Avenue, N.W., continuing southeast along Massachusetts Avenue, N.W., to the center line of 1st Street, N.E. (the starting point).
“Eligible real property” - real property that:
(a) Is in the Eligible Area;
(b) Is classified, in whole or in part, as Class 1 or Class 2 property under D.C. Official Code § 47-813(c-7);
(c) Is improved by new structures or by previously uninhabitable structure(s) which undergo substantial renovation for residential use; and
(d) Has ten (10) or more units devoted to residential use.
“Final building permit” - the final building permit issued to the owner for the project including mechanical, electrical, plumbing, heating, ventilation, and air conditioning systems, and superstructure; provided, that permits for the installation of electrical, plumbing, and mechanical systems shall be allowed to follow after the final building permit is issued to the owner; provided further, that revision permits shall be allowed to address customary deviations due to construction conditions and other modifications.
“First level of concrete has been laid” - the foundation to grade permit has been issued, the pouring of concrete for the floor of the lowest level of the structure to be constructed (that is, the cellar, basement, sub-cellar, sub-basement, or similar level) has commenced and the concrete work testing reports have been submitted to DCRA.
“Gross floor area” - has the meaning set forth in 11 DCMR § 199.1.
“OTR” - the District of Columbia Office of Tax and Revenue.
“Owner” - the property owner or person authorized by the owner.
“Rehabilitation” - the substantial renovation of a structure for housing for sale or rental which is not habitable for dwelling purposes because it is in substantial violation of the Housing Regulations (title 14 of the District of Columbia Municipal Regulations) .
“Residential use” - has the meaning set forth in 11 DCMR § 1799.1.
“Total residential FAR square footage” - the total gross floor area of the project that is devoted to residential uses, including common areas and areas devoted to accessory uses to the residential use of the building or a portion thereof, based on the plans and drawings submitted in conjunction with the building permit application. (The terms “gross floor area” and “residential use” shall have the meaning set forth in 11 DCMR §§ 199.1 and 1799.1, respectively.)
“Units devoted to residential use” - (a) occupied units that were constructed, rehabilitated, or converted for residential use, or (b) unoccupied units that are in the process of being constructed, rehabilitated, converted, marketed, leased, or sold for residential use, in either event pursuant to a building permit for such residential use. The use of an eligible unit for a “home occupation,” as such term is defined in the Zoning Regulations (Title 11 of the District of Columbia Municipal Regulations), shall not make a unit that is otherwise eligible ineligible.
