Read the full stored bill text
SECOND REGULAR SESSION
HOUSE BILL NO. 1735
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE WELLENKAMP .
4537H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o 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Section A. Sections 135.478, 135.481, 135.484, and 135.487, RSMo, are repealed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 revi talization ar ea", an area defined as a National Register -listed
3 historic district;
4 (2) "Critical rev italization pr operty", an occupied pro perty that is r ecognized as
5 a contributing r esource in a National Register -listed historic district and is zoned as
6 r esidential, commer cial, 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 revit alization prop erties", expenses incurr ed
11 for prop erty ren ovation, including surveys, arch itectural and engineering services, and
12 construction costs relat ed to maintenance, functional use, and prop erty 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
EXPLANA TION — 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.
17 replacing a national register listed or local historic structure; except that, costs paid for by the
18 taxpayer with grants or forgiv able 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 for givable 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 of fered
29 for sale at market rate for owner-o ccupancy 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 Emer gency Management Agency mapping as subject to flooding;
39 (1 1) "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 Pr eservation Office that encompasses a commonly
42 r ecognized downtown wher e a collection of buildings, structur es, and sites possess
43 significant historical or arch itectural value and wher e each pr operty 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 2
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 offer ed 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 [ (1 1) ] (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) "T ax 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) "T axpayer", any person, partnership, corporation, trust, limited liability
75 company , or any charitable or ganization 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 3
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 r enovation of a critical
32 r evitalization pr operty shall r eceive a tax credit equal to thirty-five per cent of such
33 costs against his or her tax liability . The minimum eligible costs for ren ovation of a
34 critical revit alization pr operty shall be five thousand dollars. The tax cred it 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 re novation 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 cred its may be issued
42 under subsection 5 of this section for the renova tion of rent al pro perty qualifying as a
43 critical r evitalization pro perty .
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 4
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 cred its 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 cr edits in any given year , one million dollars shall be set aside for pro jects in areas
11 described in subdivision (9) of section 135.478, seven million dollars shall be set aside for
12 pr ojects in ar eas described in subdivision (1) of section 135.478, and eight million dollars
13 shall be set aside for pr ojects in ar eas described in subdivision (14) of section 135.478.
14 The maximum tax credit for a pro ject consisting of multiple-unit qualifying r esidences
15 in a distr essed community shall not exceed thr ee 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 cr edit under sections 135.475 to
33 135.487 for the ren ovation of a critical re vitalization pro perty shall also r eceive a credit
34 under sections 253.545 to 253.559.
135.487. 1. T o 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 5
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 cr edit application pr ocess for taxpayers
19 who incurr ed eligible costs for the r enovation of a critical r evitalization pr operty that
20 allows for the evaluation of individual prope rty applicants and for the evaluation of
21 local nonpro fit organization applicants that support multiple pr operties 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 pr eservation organizations, community developers, and other intere sted
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 ef fective 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.
✔
HB 1735 6