HOUSE BILL NO. 1735 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE WELLENKAMP.
4537H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal sections 135.478, 135.481, 135.484, and 135.487, RSMo, and to enact in lieu thereof four new sections relating to a tax credit for critical revitalization property.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 135.478, 135.481, 135.484, and 135.487, RSMo, are repealed 2 and four new sections enacted in lieu thereof, to be known as sections 135.478, 135.481, 3 135.484, and 135.487, to read as follows: 135.478. As used in sections 135.481 to 135.487, the following terms mean: 2 (1) "Critical revitalization area", an area defined as a National Register-listed 3 historic district; 4 (2) "Critical revitalization property", an occupied property that is recognized as 5 a contributing resource in a National Register-listed historic district and is zoned as 6 residential, commercial, or mixed use; 7 (3) "Department", the department of economic development; 8 [(2)] (4) "Director", the director of the department of economic development; 9 [(3)] (5) "Distressed community", as defined in section 135.530; 10 [(4)] (6) "Eligible costs for critical revitalization properties", expenses incurred 11 for property renovation, including surveys, architectural and engineering services, and 12 construction costs related to maintenance, functional use, and property viability; 13 (7) "Eligible costs for a new residence", expenses incurred for property acquisition, 14 development, site preparation other than demolition, surveys, architectural and engineering 15 services and construction and all other necessary and incidental expenses incurred for 16 constructing a new market rate residence, which is or will be owner-occupied, which is not
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 1735 2
17 replacing a national register listed or local historic structure; except that, costs paid for by the 18 taxpayer with grants or forgivable loans, other than tax credits, provided pursuant to state or 19 federal governmental programs are ineligible; 20 [(5)] (8) "Eligible costs for rehabilitation", expenses incurred for the renovation or 21 rehabilitation of an existing residence including site preparation, surveys, architectural and 22 engineering services, construction, modification, expansion, remodeling, structural alteration, 23 replacements and alterations; except that, costs paid for by the taxpayer with grants or 24 forgivable loans other than tax credits provided pursuant to state or federal governmental 25 programs are ineligible; 26 [(6)] (9) "Eligible residence", a single-family residence forty years of age or older, 27 located in this state and not within a distressed community as defined by section 135.530, 28 which is occupied or intended to be occupied or occupied long-term by the owner or offered 29 for sale at market rate for owner-occupancy and which is either located within a United States 30 census block group which, if in a metropolitan statistical area, has a median household 31 income of less than ninety percent, but greater than or equal to seventy percent of the median 32 household income for the metropolitan statistical area in which the census block group is 33 located, or which, if located within a United States census block group in a nonmetropolitan 34 area, has a median household income of less than ninety percent, but greater than or equal to 35 seventy percent of the median household income for the nonmetropolitan areas in the state; 36 [(7)] (10) "Flood plain", any land or area susceptible to being inundated by water 37 from any source or located in a one hundred-year flood plain area determined by Federal 38 Emergency Management Agency mapping as subject to flooding; 39 (11) "Historic district", a geographically defined section of a community listed 40 on the National Register that is formally designated as such by the National Park 41 Service and the State Historic Preservation Office that encompasses a commonly 42 recognized downtown where a collection of buildings, structures, and sites possess 43 significant historical or architectural value and where each property adds to the overall 44 character of the area; 45 [(8)] (12) "New residence", a residence constructed on land which if located within a 46 distressed community has either been vacant for at least two years or is or was occupied by a 47 structure which has been condemned by the local entity in which the structure is located or 48 which, if located outside of a distressed community but within a census block group as 49 described in subdivision (6) or (10) of this section, either replaces a residence forty years of 50 age or older demolished for purposes of constructing a replacement residence, or which is 51 constructed on vacant property which has been classified for not less than forty continuous 52 years as residential or utility, commercial, railroad or other real property pursuant to Article 53 X, Section 4(b) of the Missouri Constitution, as defined in section 137.016; except that, no HB 1735 3
54 new residence shall be constructed in a flood plain or on property used for agricultural 55 purposes. In a distressed community, the term "new residence" shall include condominiums, 56 owner-occupied units or other units intended to be owner-occupied in multiple unit structures; 57 [(9)] (13) "Project", new construction, rehabilitation or substantial rehabilitation of a 58 residence that qualifies for a tax credit pursuant to sections 135.475 to 135.487; 59 [(10)] (14) "Qualifying residence", a single-family residence, forty years of age or 60 older, located in this state which is occupied or intended to be occupied long-term by the 61 owner or offered for sale at market rate for owner-occupancy and which is located in a 62 metropolitan statistical area or nonmetropolitan statistical area within a United States census 63 block group which has a median household income of less than seventy percent of the median 64 household income for the metropolitan statistical area or nonmetropolitan area, respectively, 65 or which is located within a distressed community. A qualifying residence shall include a 66 condominium or residence within a multiple residential structure or a structure containing 67 multiple single-family residences which is located within a distressed community; 68 [(11)] (15) "Substantial rehabilitation", rehabilitation the costs of which exceed fifty 69 percent of either the purchase price or the cost basis of the structure immediately prior to 70 rehabilitation; provided that, the structure is at least fifty years old notwithstanding any 71 provision of sections 135.475 to 135.487 to the contrary; 72 [(12)] (16) "Tax liability", the tax due pursuant to chapter 143, 147 or 148, other than 73 taxes withheld pursuant to sections 143.191 to 143.265; 74 [(13)] (17) "Taxpayer", any person, partnership, corporation, trust, limited liability 75 company, or any charitable organization which is exempt from federal income tax and whose 76 Missouri unrelated business taxable income, if any, would be subject to the state income tax 77 imposed under chapter 143. 135.481. 1. (1) Any taxpayer who incurs eligible costs for a new residence located in 2 a distressed community or within a census block group as described in subdivision (10) of 3 section 135.478, or for a multiple unit condominium described in subdivision (2) of this 4 subsection, shall receive a tax credit equal to fifteen percent of such costs against his or her 5 tax liability. The tax credit shall not exceed forty thousand dollars per new residence in any 6 ten-year period. 7 (2) For the purposes of this section, a "multiple unit condominium" is one that is 8 intended to be owner occupied, which is constructed on property subject to an industrial 9 development contract as defined in section 100.310 and which lies within an area with a city 10 zoning classification of urban redevelopment district established after January 1, 2000, and 11 before December 31, 2001, and which is constructed in connection with the qualified 12 rehabilitation of a structure more than ninety years old eligible for the historic structures HB 1735 4
13 rehabilitation tax credit described in sections 253.545 to 253.559, and is under way by 14 January 1, 2000, and completed by January 1, 2002. 15 2. Any taxpayer who incurs eligible costs for a new residence located within a census 16 block as described in subdivision (6) of section 135.478 shall receive a tax credit equal to 17 fifteen percent of such costs against his or her tax liability. The tax credit shall not exceed 18 twenty-five thousand dollars per new residence in any ten-year period. 19 3. Any taxpayer who is not performing substantial rehabilitation and who incurs 20 eligible costs for rehabilitation of an eligible residence or a qualifying residence shall receive 21 a tax credit equal to twenty-five percent of such costs against his or her tax liability. The 22 minimum eligible costs for rehabilitation of an eligible residence shall be ten thousand 23 dollars. The minimum eligible costs for rehabilitation of a qualifying residence shall be five 24 thousand dollars. The tax credit shall not exceed twenty-five thousand dollars in any ten-year 25 period. 26 4. Any taxpayer who incurs eligible costs for substantial rehabilitation of a qualifying 27 residence shall receive a tax credit equal to thirty-five percent of such costs against his or her 28 tax liability. The minimum eligible costs for substantial rehabilitation of a qualifying 29 residence shall be ten thousand dollars. The tax credit shall not exceed seventy thousand 30 dollars in any ten-year period. 31 5. Any taxpayer who incurs eligible costs for renovation of a critical 32 revitalization property shall receive a tax credit equal to thirty-five percent of such 33 costs against his or her tax liability. The minimum eligible costs for renovation of a 34 critical revitalization property shall be five thousand dollars. The tax credit shall not 35 exceed one hundred thousand dollars in any ten-year period. 36 6. A taxpayer shall be eligible to receive tax credits for new construction [or], 37 rehabilitation, or renovation pursuant to only one subsection of this section. 38 [6.] 7. No tax credit shall be issued pursuant to this section for any structure which is 39 in violation of any municipal or county property, maintenance or zoning code. 40 [7.] 8. No tax credit shall be issued pursuant to sections 135.475 to 135.487 for the 41 construction or rehabilitation of rental property, except that tax credits may be issued 42 under subsection 5 of this section for the renovation of rental property qualifying as a 43 critical revitalization property. 135.484. 1. (1) Beginning January 1, 2000, but ending December 31, 2026, tax 2 credits shall be allowed pursuant to section 135.481 in an amount not to exceed sixteen 3 million dollars per year. Of this total amount of tax credits in any given year, eight million 4 dollars shall be set aside for projects in areas described in subdivision [(6)] (9) of section 5 135.478 and eight million dollars for projects in areas described in subdivision [(10)] (14) of HB 1735 5
6 section 135.478. The maximum tax credit for a project consisting of multiple-unit qualifying 7 residences in a distressed community shall not exceed three million dollars. 8 (2) Beginning January 1, 2027, tax credits shall be allowed under section 135.481 9 in an amount not to exceed sixteen million dollars per year. Of this total amount of tax 10 credits in any given year, one million dollars shall be set aside for projects in areas 11 described in subdivision (9) of section 135.478, seven million dollars shall be set aside for 12 projects in areas described in subdivision (1) of section 135.478, and eight million dollars 13 shall be set aside for projects in areas described in subdivision (14) of section 135.478. 14 The maximum tax credit for a project consisting of multiple-unit qualifying residences 15 in a distressed community shall not exceed three million dollars. 16 2. Any amount of credit which exceeds the tax liability of a taxpayer for the tax year 17 in which the credit is first claimed may be carried back to any of the taxpayer's three prior tax 18 years and carried forward to any of the taxpayer's five subsequent tax years. A certificate of 19 tax credit issued to a taxpayer by the department may be assigned, transferred, sold or 20 otherwise conveyed. Whenever a certificate of tax credit is assigned, transferred, sold or 21 otherwise conveyed, a notarized endorsement shall be filed with the department specifying 22 the name and address of the new owner of the tax credit and the value of the credit. 23 3. The tax credits allowed pursuant to sections 135.475 to 135.487 may not be 24 claimed in addition to any other state tax credits, with the exception of the historic structures 25 rehabilitation tax credit authorized pursuant to sections 253.545 to 253.559, which insofar as 26 sections 135.475 to 135.487 are concerned may be claimed only in conjunction with the tax 27 credit allowed pursuant to subsection 4 of section 135.481. In order for a taxpayer eligible for 28 the historic structures rehabilitation tax credit to claim the tax credit allowed pursuant to 29 subsection 4 of section 135.481, the taxpayer must comply with the requirements of sections 30 253.545 to 253.559, and in such cases, the amount of the tax credit pursuant to subsection 4 of 31 section 135.481 shall be limited to the lesser of twenty percent of the taxpayer's eligible costs 32 or forty thousand dollars. No taxpayer awarded a tax credit under sections 135.475 to 33 135.487 for the renovation of a critical revitalization property shall also receive a credit 34 under sections 253.545 to 253.559. 135.487. 1. To obtain any credit allowed pursuant to sections 135.475 to 135.487, a 2 taxpayer shall submit to the department, for preliminary approval, an application for tax 3 credit. The director shall, upon final approval of an application and presentation of 4 acceptable proof of substantial completion of construction, issue the taxpayer a certificate of 5 tax credit. The director shall issue all credits allowed pursuant to sections 135.475 to 135.487 6 in the order the applications are received. In the case of a taxpayer other than an owner- 7 occupant, the director shall not delay the issuance of a tax credit pursuant to sections 135.475 8 to 135.487 until the sale of a residence at market rate for owner-occupancy. A taxpayer, HB 1735 6
9 [taxpayer] other than an owner-occupant who receives a certificate of tax credit pursuant to 10 sections 135.475 to 135.487 shall, within thirty days of the date of the sale of a residence, 11 furnish to the director satisfactory proof that such residence was sold at market rate for 12 owner-occupancy. If the director reasonably determines that a residence was not in good faith 13 intended for long-term owner occupancy, the director make revoke any tax credits issued and 14 seek recovery of any tax credits issued pursuant to section 620.017. 15 2. The department may cooperate with a municipality or a county in which a project 16 is located to help identify the location of the project, the type and eligibility of the project, the 17 estimated cost of the project and the completion date of the project. 18 3. The department shall establish a tax credit application process for taxpayers 19 who incurred eligible costs for the renovation of a critical revitalization property that 20 allows for the evaluation of individual property applicants and for the evaluation of 21 local nonprofit organization applicants that support multiple properties within the same 22 historic district. The department shall publish the application cycle, the evaluation 23 criteria, and the process for award and oversight after consultation with statewide and 24 local historic preservation organizations, community developers, and other interested 25 parties. 26 4. The department may promulgate such rules or regulations or issue administrative 27 guidelines as are necessary to administer the provisions of sections 135.475 to 135.487. No 28 rule or portion of a rule promulgated pursuant to the authority of this section shall become 29 effective unless it has been promulgated pursuant to the provisions of chapter 536. 30 [4.] 5. The department shall conduct annually a comprehensive program evaluation 31 illustrating where the tax credits allowed pursuant to sections 135.475 to 135.487 are being 32 utilized, explaining the economic impact of such program and making recommendations on 33 appropriate program modifications to ensure the program's success. ✔
Statutes affected: