Sunset FAQs and Tips

Sunsetting means discontinuing an item or terminating a program. In government, a sunset clause is a measure that sets an automatic end date for a statute unless the legislature acts to extend the statute.

• Make sure that you complete the necessary steps to be issued an allocation certificate.
• Make sure that you complete the necessary steps to be issued a credit certificate and check the issuance date of the project’s allocation certificate to verify construction is on track to finish in three years. No credit certificates can be issued after June 30, 2025.

The project must have a Part A approved by the SHPO which confirms these key qualifications:

• The project must be a "substantial rehabilitation" as defined in 47(c)(1)(C) of the Internal Revenue Code
• The developer of the project must submit complete Federal Part 2 and State Part A applications before rehabilitation begins 
• There must be a Part 2 approved by the National Park Service (NPS)
• For multiphase projects – as declared in your Part 2 phase plan - all phases of your project must be described in the Part 2 and Part 2 Amendments approved by the National Park Service.
• There must be a Certified Historic Structure:
  • a) Individually listed in the National Register of Historic Places; or 
  • b) Is contributing to a listed National Register of Historic Places historic district or local historic district that has been certified by NPS for tax credit purposes.

• Project must have received an Allocation Certificate by June 30, 2022
• Construction work must be finished prior to submitting a Part 3 to SHPO 
• SHPO has approved the State Part B application with all required supporting Part B materials.
• National Park Service has certified the Federal Part 3 application and a signed copy has been received by SHPO.
• Credit certificates can be issued through 2025
• Project must be completed within three (3) calendar years following the issuance of the Allocation Certificate.

Your property must be listed in the National Register of Historic Places to be considered a Certified Historic Structure. (for definition of Certified Historic Structure see https://www.nps.gov/tps/tax-incentives/taxdocs/hpca-instructions-2019.pdf)

• A Part 1 is used to certify that the building is contributing to an existing National Register District or a Certified District. 
• A Part 1 is used to receive a Preliminary Determination of Individual Listing (PDIL). Properties which receive a PDIL must complete a full listing process to be considered a Certified Historic Structure.  For Minnesota National Register Deadlines see the State Review Board page.
• A Part 1 is not required for a property already individually listed in the National Register of Historic Places.

Staff suggests you submit your application material as soon as they are complete. The length of the process can differ depending on the current National Register eligibility status of the building. The three most common statuses are discussed below:

• Unevaluated buildings: meaning buildings that are neither individually listed or located in a National Register listed district: Projects of this type will need to complete the total nomination process, in addition to the Part 1 to receive an allocation certificate. SHPO recommends the Part 1 application be submitted no later than August 29, 2021.  The State Review Board page has Minnesota National Register Deadlines.
• Buildings considered contributing in a listed Historic District: Applicants must complete a Part 1. SHPO recommends the Part 1 application be submitted no later than August 29, 2021. 
• Individually listed buildings: Applicants do not typically need to submit a Part 1 for this type of property; however, make sure to check with SHPO to confirm this is the case. If a project does not need a Part 1, SHPO recommends that applicants submit the Part 2 no later than November 27, 2021.

Yes, you may submit a Part 2 application; however, the Part 2 application review for the project will not begin until MN SHPO Staff forwards the Part 1 application onto NPS with a positive recommendation. 

Part 1s are important tools in the tax credit review process, besides documenting the building's current condition and helping Part 2 reviewers determine what proposed work may or may not meet the Standards, they determine if a building can be certified and therefore qualify to participate in the program. This is why the SHPO policy is to have complete Part 1s of buildings, that are likely eligible, prior to starting the Part 2 review. NPS also has a policy to hold Part 2s until they have certified the Part 1. NPS will not be able to adjust their policy on this issue. Please review your overall timeline to be able to best meet your project needs and avoid relying on this temporary adjustment in SHPO policy. It is highly recommended that Part 1s be submitted ASAP and as far in advance of the Part 2 as possible, so that ultimately the overall review timeline can be shortened.

Nominations can be scheduled for any meeting up to and including the April 12, 2022 meeting and still have a reasonable chance of being listed by the sunset date. Meetings are held quarterly. Meeting dates and application submission dates can be found on the SHPO website.

No, the NPS does not provide updates as nominations move through the process.

Yes, the MN SHPO National Register Staff will notify the nomination preparer, via email, when we receive an official listing notification from NPS. The property owner will also receive an official notification letter when the property has been listed.

Yes, the NPS does provide updates as projects move through the process see https://tpsdev.cr.nps.gov/status/

The Federal tax credits are not due to sunset, so the State allocation certificate and credit certificate requirements do not apply.

The SHPO and NPS will continue to process your application for the Federal program.  Should the State program be extended again, MN SHPO will work with each project to determine the effect of any new statute language.

The federal and state programs recognize that it is not always possible to find the tenants you'd like, just when you'd like them. However, the NPS does require all spaces where project work has been conducted be brought to a final condition that meets Standards. The typical way to deal with this in a tax credit project (not just during sunset) is to "white box" the space.  This simply means you bring the space up to a generic finished state that meets Standards. This can mean different things for a finished building or an industrial building, just as meeting the Standards in buildings with different historic character always does. In the Part 2 description for those spaces that do not have a tenant yet, simply describe the work required to bring the space to a white boxed level of finish. After approval by NPS of such a description of rehabilitation the Allocation Certificate can be issued, because the description includes all phases of work that would take place in the building. If a tenant is found before the Part 3 is submitted, the project can simply submit a Part 2 Amendment to revise the proposed design in that space.  The actual construction of the white box work need not necessarily be carried out, unless a tenant is still not found at the end of the project.

For more on "white box", check Example #3 on this NPS webpage.

Phase plans are submitted as a component of the Part 2 application. If a project has multiple phases, each phase must be outlined in the initial application. Many projects have only one phase of work and therefore do not require a phase plan.

A phase plan simply outlines proposed construction work that will be completed over the period of the project, breaking it up into discernable phases. There should be enough description for the NPS and for the SHPO to understand and determine when a phase has been completed.

For those projects with more than one phase, typically only the first phase is described in the Part 2 and subsequent phases of work are submitted in Part 2 Amendments; however, all phases of work may be fully described and submitted all at once in the Part 2. When submitting the subsequent phases of work in Part 2 Amendments, please make sure to clearly state which phase of work you are submitting in your Amendment. 

ALL phases will need to be submitted and approved in order to issue the allocation certificate.

Phases must be clear portions of construction work that completes a portion of the building. Phases are not defined by bid packages, or different divisions of work or trades, but must create a clearly defined completed portion of the building.

At the state level, this phase plan is used to determine when all phases of work have been submitted and reviewed by the SHPO and NPS, and therefore an allocation certificate can be issued. The allocation certificate cannot be issued until all phases, as described by the project in their phase plan, have been submitted for review.

ALL phases will need to be submitted and approved in order to issue the allocation certificate.