HOUSE BILL NO. 1715 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE SHARPE (4).
4076H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To amend chapter 620, RSMo, by adding thereto four new sections relating to workforce housing tax incentives, with penalty provisions.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 620, RSMo, is amended by adding thereto four new sections, to 2 be known as sections 620.2022, 620.2024, 620.2026, and 620.2028, to read as follows: 620.2022. 1. Sections 620.2022 to 620.2028 shall be known and may be cited as 2 the "Workforce Housing Tax Incentives Program". 3 2. As used in sections 620.2022 to 620.2028, the following terms mean: 4 (1) "Brownfield site", an abandoned, idled, or underutilized property where 5 expansion or redevelopment is complicated by real or perceived environmental 6 contamination. A brownfield site includes property contiguous with the site on which 7 the property is located. A brownfield site does not include property that has been 8 placed, or is proposed for placement, on the national priorities list established under the 9 federal Comprehensive Environmental Response, Compensation, and Liability Act, 42 10 U.S.C. Section 9601 et seq.; 11 (2) "Community", a small city, urban area, or county; 12 (3) "Department", the Missouri department of economic development; 13 (4) "Disaster recovery housing project", a qualified housing project located in a 14 county that is a declared state disaster as defined under section 190.275 or disaster area 15 as defined under section 184.805 and is eligible for Federal Emergency Management 16 Agency (FEMA) Individual Assistance program;
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 1715 2
17 (5) "Governing body", the board, the body, or the persons in whom the powers 18 of a political subdivision as a body corporate, or otherwise, are vested; 19 (6) "Grayfield site", a property meeting the following requirements: 20 (a) The property has been developed and has infrastructure in place but the 21 property’s current use is outdated or prevents a better or more efficient use of the 22 property. Such property includes vacant, blighted, obsolete, or otherwise underutilized 23 property; and 24 (b) The property’s improvements and infrastructure are at least twenty-five 25 years old and one or more of the following conditions exist: 26 a. Thirty percent or more of a building located on the property that is available 27 for occupancy has been vacant or unoccupied for twelve months or more; 28 b. The assessed value of the improvements on the property has decreased by 29 twenty-five percent or more; 30 c. The property is currently being used as a parking lot; or 31 d. The improvements on the property no longer exist; 32 (7) "Greenfield site", a site that does not meet the definition of a brownfield site 33 or grayfield site. A project proposed at a site located on previously undeveloped land or 34 agricultural land shall be presumed to be a greenfield site; 35 (8) "Housing business", a business that is a housing developer, housing 36 contractor, or nonprofit organization that completes a housing project in the state; 37 (9) "Housing project", a project located in this state meeting the requirements of 38 section 620.2024; 39 (10) "Multi-use building", a building whose street-level ground story is used for 40 a purpose other than residential, and whose upper story or stories are currently used 41 primarily for a residential purpose or will be used primarily for a residential purpose 42 after completion of the housing project associated with the building; 43 (11) "Program", the workforce housing tax incentives program administered 44 under sections 620.2022 to 620.2028; 45 (12) "Qualified rehabilitation project", a project for the rehabilitation of 46 property in this state that meets the following criteria: 47 (a) The property is at least one of the following: 48 a. Property listed on the National Register of Historic Places or eligible for such 49 listing; 50 b. Property designated as of historic significance to a district listed in the 51 National Register of Historic Places or eligible for such designation; 52 c. Property or district designated a local landmark by a city or county 53 ordinance; or HB 1715 3
54 d. A barn constructed prior to 1937; 55 (b) The property meets the physical criteria and standards for rehabilitation 56 established by the department by rule. To the extent applicable, the physical standards 57 and criteria shall be consistent with the United States Secretary of the Interior’s 58 Standards for Rehabilitation; and 59 (c) The project has qualified rehabilitation expenditures that meet or exceed the 60 following: 61 a. In the case of commercial property, expenditures totaling at least fifty 62 thousand dollars or fifty percent of the assessed value of the property, excluding the 63 land, prior to rehabilitation, whichever is less; or 64 b. In the case of property other than commercial property including, but not 65 limited to, barns constructed prior to 1937, expenditures totaling at least twenty-five 66 thousand dollars or twenty-five percent of the assessed value, excluding the land, prior 67 to rehabilitation, whichever is less; 68 (13) "Qualifying new investment", costs that are directly related to the 69 acquisition, repair, rehabilitation, or redevelopment of a housing project in this state. A 70 qualifying new investment includes costs that are directly related to new construction of 71 dwelling units if the new construction occurs in a distressed workforce housing 72 community. The amount of costs that may be used to compute a qualifying new 73 investment shall not exceed the costs used for the first one hundred fifty thousand 74 dollars of value for each dwelling unit that is part of a housing project. A qualifying 75 new investment does not include the following: 76 (a) The portion of the total cost of a housing project that is financed by federal, 77 state, or local government tax credits, grants, forgivable loans, or other forms of 78 financial assistance that do not require repayment, excluding the tax incentives provided 79 under sections 620.2022 to 620.2028; or 80 (b) If a housing project includes the rehabilitation, repair, or redevelopment of 81 an existing multi-use building, the portion of the total acquisition costs of the multi-use 82 building, including a proportionate share of the total acquisition costs of the land upon 83 which the multi-use building is situated, that are attributable to the street-level ground 84 story that is used for a purpose that is other than residential; 85 (14) "Small city", a city or village that: 86 (a) Is not located wholly within one of the eight most populous counties in the 87 state as determined by the most recent decennial census; or 88 (b) If located wholly within one of the eight most populous counties as 89 determined by the most recent decennial census, meets both of the following: 90 a. Has two thousand five hundred or fewer inhabitants; and HB 1715 4
91 b. Experienced less than thirty percentage points of population growth when 92 comparing the most recent decennial census to the decennial census immediately 93 preceding the most recent decennial census. 94 95 The term "small city" shall not include any city with more than four hundred thousand 96 inhabitants and located in more than one county; 97 (15) "Tax credit" or "tax credits", a credit or credits issued by the department 98 against the tax otherwise due under chapter 143 or 148, excluding withholding tax 99 imposed under sections 143.191 to 143.265; 100 (16) "Tax incentive", a state measure that is intended to encourage individuals 101 and businesses to spend moneys or save moneys by reducing the amount of tax that they 102 have to pay including, but not limited to, tax credits and refunds of sales and use tax 103 issued under this program; 104 (17) "Urban area": 105 (a) Any city or municipality, except for a small city, that is wholly located within 106 one of the eight most populous counties in the state as determined by the most recent 107 decennial census; or 108 (b) Any city with more than four hundred thousand inhabitants and located in 109 more than one county. 620.2024. 1. To receive workforce housing tax incentives under sections 2 620.2022 to 620.2028, a proposed housing project shall meet the following requirements: 3 (1) The housing project includes at least one of the following: 4 (a) Four or more single-family dwelling units, except for a housing project 5 located in a small city, then two or more single-family dwelling units; 6 (b) One or more multiple dwelling unit buildings, each containing three or more 7 individual dwelling units; or 8 (c) Two or more dwelling units located in the upper story of an existing multi-use 9 building; 10 (2) The housing project consists of any of the following: 11 (a) Rehabilitation, repair, or redevelopment at a brownfield or grayfield site that 12 results in new dwelling units; 13 (b) The rehabilitation, repair, or redevelopment of dilapidated dwelling units; 14 (c) The rehabilitation, repair, or redevelopment of dwelling units located in the 15 upper story of an existing multi-use building; 16 (d) For a housing project located in a small city that meets program 17 requirements under paragraph (a) of subdivision (1) of this subsection, development 18 at a greenfield site; or HB 1715 5
19 (e) For a disaster recovery housing project as defined under section 620.2022, 20 development at a greenfield site; 21 (3) (a) Except as provided in paragraph (b) of this subdivision, the average 22 dwelling unit cost shall not exceed the maximum amount established by the department 23 for each fiscal year for the applicable project type and project location. The department 24 shall establish the maximum average dwelling unit cost for a housing project that 25 includes single-family dwelling units that are located in a small city and for a housing 26 project that includes single-family dwelling units that are located in an urban area. The 27 department shall establish the maximum average dwelling unit cost for a housing 28 project that includes multiple dwelling unit buildings and is located in a small city and 29 for a housing project that includes multiple dwelling unit buildings and is located in an 30 urban area. In establishing each maximum average dwelling unit cost, the department 31 shall primarily consider the most recent annual United States Census Bureau Building 32 Permits Survey and historical program data; 33 (b) If the housing project involves the rehabilitation, repair, redevelopment, or 34 preservation of property described in subdivision (12) of subsection 2 of section 35 620.2022, the average dwelling unit cost shall not exceed one hundred twenty-five 36 percent of the maximum average dwelling unit cost established by the department for 37 the applicable housing project type and housing project location as provided in 38 paragraph (a) of this subdivision; and 39 (4) The dwelling units, when completed and made available for occupancy, meet 40 the United States Department of Housing and Urban Development’s housing quality 41 standards as set forth in 24 CFR 982 and all applicable local safety standards. 620.2026. 1. (1) A housing business seeking workforce housing tax incentives 2 provided under section 620.2028 shall apply to the department in the manner prescribed 3 by the department's rules. The department may accept applications during one or more 4 annual application periods to be determined by the department by rule. 5 (2) The application shall include the following: 6 (a) Information establishing local participation in the housing project, including: 7 a. A resolution in support of the housing project by the governing body of the 8 community where the housing project will be located; and 9 b. Documentation of local matching funds pledged for the housing project in an 10 amount equal to at least one thousand dollars per dwelling unit including, but not 11 limited to, a funding agreement between the housing business and the governing body of 12 the community where the housing project will be located. For purposes of this 13 subparagraph, local matching funds shall be in the form of cash or cash equivalents or 14 in the form of a local property tax exemption, rebate, refund, or reimbursement; HB 1715 6
15 (b) Information evidencing an agreement between the business and the 16 department specifying the requirements that will be met to confirm eligibility and the 17 requirements shall be maintained throughout the period of the agreement in order to 18 retain the incentives or financial assistance received. The department shall consult with 19 the governing body of the community during negotiations relating to the agreement. 20 The agreement shall contain a report submitted to the department by a business, 21 together with its application, describing all violations of environmental law or worker 22 safety law within the last five years. If, upon review of the application, the department 23 finds that the business has a record of violations of the law, statutes, rules, or regulations 24 that tend to show a consistent pattern, the department shall not provide incentives or 25 assistance to the business unless the department finds either that the violations did not 26 seriously affect public health, public safety, or the environment, or if such violations did 27 seriously affect public health, public safety, or the environment, that mitigating 28 circumstances were present; 29 (c) Information showing the total costs and funding sources of the housing 30 project sufficient to allow the department to adequately determine the financing that 31 will be utilized for the housing project, the actual cost of the dwelling units, and the 32 amount of the qualifying new investment; and 33 (d) Any other information deemed necessary by the department to evaluate the 34 eligibility and financial need of the housing project under the program. 35 36 In addition to complying with the applicable requirements under this subdivision, a 37 housing business applying for disaster recovery housing project tax incentives shall also 38 submit a certification that the applicant’s housing project meets the definition of a 39 disaster recovery housing project, if applicable. The housing business shall also submit 40 documentation that provides evidence that the qualified disaster recovery housing 41 project is needed due to the impact of the disaster that is the subject of the major 42 disaster declaration. 43 2. (1) All completed applications shall be reviewed and scored on a competitive 44 basis by the department under rules adopted by the department. 45 (2) Upon review and scoring of all applications received during an application 46 period, the department may make a tax incentive award to a housing project, which tax 47 incentive award shall represent the maximum amount of tax incentives the housing 48 project may qualify for under the program. In determining a tax incentive award, the 49 department shall not use an amount of housing project costs that exceeds the amount 50 included in the application of the housing business. Tax incentive awards shall be 51 approved by the director of the department. HB 1715 7
52 (3) After making a tax incentive award, the department shall notify the housing 53 business of its tax incentive award. The notification shall include the amount of tax 54 incentives awarded under section 620.2028 and a statement that the housing business 55 has no right to receive a tax incentive certificate or claim a tax incentive until all 56 requirements of the program, including all requirements imposed by the agreement 57 entered into under subsection 3 of this section, are satisfied. The amount of tax credits 58 included on a tax credit certificate issued under this section, or a claim for refund of 59 sales and use taxes, shall be contingent upon completion of the requirements under 60 subsection 3 of this section. 61 (4) An applicant that does not receive a tax incentive award during an 62 application period may make additional applications during subsequent application 63 periods. Such applicant shall be required to submit a new application, which shall be 64 competitively reviewed and scored in the same manner as other applications in that 65 application period. 66 3. (1) Upon receipt of a tax incentive award for the housing project, the housing 67 business shall enter into an agreement with the department for the successful 68 completion of all requirements of the program. The agreement shall identify the tax 69 incentive award amount, the tax incentive award date, the housing project completion 70 deadline, and the total costs of the housing project. 71 (2) The following compliance cost fees shall apply to all agreements entered into 72 under this program and shall be collected in a manner determined by the department: 73 (a) The imposition of a one-time compliance cost fee of five hundred dollars to be 74 collected by the authority prior to the issuance of a tax incentive certificate or the 75 disbursement of financial assistance; and 76 (b) The imposition of a compliance cost fee equal to one-half of one percent of 77 the value of tax incentives claimed under an agreement that has an aggregate tax 78 incentive value of one hundred thousand dollars or greater. The department shall 79 collect the fee from the business after the tax incentive is claimed by the business from 80 the department of revenue. 81 (3) (a) Except as provided in paragraph (b) of this subdivision, a housing 82 business shall complete its housing project within three years from the date the housing 83 project is registered by the department. 84 (b) The department may, for good cause within its discretion, extend a housing 85 project’s completion deadline by up to twelve months upon application by the housing 86 business. Such application shall be made prior to the expiration of the t