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SECOND REGULAR SESSION
HOUSE BILL NO. 2531
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE PERKINS.
5787H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o amend chapter 99, RSMo, by adding thereto six new sections relating to tax credits for
downtown revitalization.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 99, RSMo, is amended by adding thereto six new sections, to be
2 known as sections 99.720, 99.722, 99.724, 99.726, 99.728, and 99.730, to read as follows:
99.720. 1. Sections 99.720 to 99.730 shall be known and may be cited as the
2 "Revitalizing Missouri Downtowns and Main Str eets Act".
3 2. As used in sections 99.720 to 99.730, the following terms mean, unless the
4 context requ ires otherwise:
5 (1) "Department", the Missouri department of economic development;
6 (2) "Qualified conversion expenditures ", any amount prop erly chargeable to a
7 capital account. The term "qualified conversion expenditures " shall not include:
8 (a) The cost of acquisition;
9 (b) Any expenditure attributable to the enlargement of an existing building; or
10 (c) T ax-exempt pr operties;
11 (3) "Qualified converted building", any building and its structural components
12 if:
13 (a) Prior to conversion, such building was nonr esidential real pro perty , as
14 defined in 26 U.S.C. Section 168(e)(2)(B), as amended, which was leased, or available for
15 lease, to office tenants, or utilized for office purposes by the owner -occupant;
16 (b) Such building has been substantially converted fr om an office use to a
17 pr edominantly res idential use, defined as mor e than fifty percen t of the gross squar e
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.
18 footage of the building, and may also include ret ail, or other commer cial use, and may
19 also include accessory on-site parking; and
20 (c) Such building was initially placed in service at least twenty-five years before
21 the beginning of the conversion;
22 (4) "Qualified Missouri main street district", an accredi ted, associated, or
23 affiliated main street district of the Missouri main street pr ogram cr eated pursuant to
24 sections 251.470 to 251.485;
25 (5) "Substantially converted", qualified conversion expenditures incurr ed
26 during the twenty-four -month period pr eceding final appr oval of tax cred its that in total
27 ar e gr eater than:
28 (a) The adjusted basis of such building and its structural components, as
29 determined as of the beginning of the first day of such twenty-four -month period, or of
30 the holding period of the building, whichever is later; or
31 (b) Fifteen thousand dollars if the prop erty is located in a qualified Missouri
32 main stree t district, or five hundred thousand dollars if the pr operty is not located in a
33 qualified Missouri main street district.
34
35 In the case of any conversion which may r easonably be expected to be completed in
36 phases set forth in ar chitectural plans and specifications completed befor e the
37 conversion begins, qualified conversion expenditur es shall be totaled for the sixty-
38 month period pr eceding final appr oval of tax cred its rather than the twenty-four -month
39 period pr eceding such final appr oval;
40 (6) "Upper floor housing", any housing that is attached to or contained in the
41 same building as commer cial pr operty , whether located on the gr ound floor behind the
42 traditional storef ron t or on other floors of the pr operty .
99.722. 1. For all tax years beginning on or after January 1, 2027, the
2 department shall issue a taxpayer a cr edit against the taxpayer's state tax liability equal
3 to twenty-five per cent of qualified conversion expenditures with res pect to a qualified
4 converted building. If the amount of such tax cre dit exceeds the taxpayer's state tax
5 liability for the year in which tax cre dits are issued, the amount that exceeds the state
6 tax liability may be carried back to any of the thr ee preced ing tax years or carried
7 forward for cred it against state tax liability for the succeeding ten tax years, or until the
8 full cre dit is used, whichever occurs first.
9 2. T ax cred its authorized pursuant to this section may be transferred, sold, or
10 assigned, and shall r etain the same attributes as in the hands of the assignor . T ax cred its
11 may be transferred multiple times. In order to transfer a tax cre dit authorized pursuant
12 to this section, the assignor and assignee shall complete and submit a tax cr edit transfer
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13 form pr ovided by the department of reven ue. Such transfers may be facilitated thr ough
14 an intermediary entity as permitted by law without affecting the natur e or attributes of
15 the tax cred it.
16 3. T ax cr edits authorized for a partnership, a limited liability company taxed as
17 a partnership, or multiple owners of pr operty shall be passed thr ough to the partners,
18 members, or owners r espectively pr o rata, or pursuant to an executed agr eement among
19 the partners, members, or owners documenting an alternate distribution method.
20 4. The assignee of a tax cred it may use the acquired tax cre dits to offset up to one
21 hundr ed per cent of the taxpayer's state tax liability . The assignor shall perfect such
22 transfer by notifying the department in writing within thirty calendar days following
23 the effective date of the transfer and shall pr ovide any information as may be r equir ed
24 by the department.
99.724. 1. For all tax years beginning on or after January 1, 2027, the
2 department shall issue a taxpayer a cr edit against the taxpayer's state tax liability equal
3 to thirty perc ent of qualified conversion expenditur es with r espect to upper floor
4 housing located in a qualified Missouri main street district. If the amount of such tax
5 cr edit exceeds the taxpayer's state tax liability for the year in which tax cr edits are
6 issued, the amount that exceeds the state tax liability may be carried back to any of the
7 thr ee preced ing tax years or carried forward for credit against state tax liability for the
8 succeeding ten tax years, or until the full credi t is used, whichever occurs first.
9 2. T ax cred its authorized pursuant to this section may be transferred, sold, or
10 assigned, and shall r etain the same attributes as in the hands of the assignor . T ax cred its
11 may be transferred multiple times. In order to transfer a tax cre dit authorized pursuant
12 to this section, the assignor and assignee shall complete and submit a tax cr edit transfer
13 form pr ovided by the department of reven ue. Such transfers may be facilitated thr ough
14 an intermediary entity as permitted by law without affecting the natur e or attributes of
15 the tax cred it.
16 3. T ax cr edits authorized for a partnership, a limited liability company taxed as
17 a partnership, or multiple owners of pr operty shall be passed thr ough to the partners,
18 members, or owners r espectively pr o rata, or pursuant to an executed agr eement among
19 the partners, members, or owners documenting an alternate distribution method.
20 4. The assignee of a tax cred it may use the acquired tax cre dits to offset up to one
21 hundr ed per cent of the taxpayer's state tax liability . The assignor shall perfect such
22 transfer by notifying the department in writing within thirty calendar days following
23 the effective date of the transfer and shall pr ovide any information as may be r equir ed
24 by the department.
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99.726. 1. The total amount of tax cr edits authorized pursuant to sections 99.720
2 to 99.730 shall not exceed fifty million dollars in any fiscal year .
3 2. Fifty per cent of the maximum amount of tax cre dits available to be authorized
4 to taxpayers in a fiscal year pursuant to this section shall be authorized solely for
5 structur es of mor e than seven hundred fifty thousand gr oss square feet. If the total
6 amount of such r eserved tax credits have been authorized, structures of mor e than seven
7 hundr ed fifty thousand gross square feet may r eceive tax cr edits fr om the rem aining
8 unr eserved amount of tax cr edits. If the total amount of res erved tax credi ts have not
9 been authorized by the department, structur es of less than seven hundr ed fifty thousand
10 gr oss squar e feet may be authorized tax credits from such r eserved amount. The total
11 amount of tax credits for a structure of mor e than seven hundr ed fifty thousand gr oss
12 squar e feet may be allocated to the annual limits pro vided in this section over a period of
13 up to ten years, if:
14 (1) The pro ject otherwise meets all the requ irem ents of sections 99.720 to 99.730;
15 and
16 (2) The pr oject meets the ten per cent incurr ed costs test under subsection 6 of
17 section 99.728 within thirty-six months after an award is authorized.
18 3. T wenty-five percen t of the maximum amount of tax cr edits available to be
19 authorized to taxpayers in a fiscal year pursuant to this section shall be authorized
20 solely for upper floor housing pr ojects located in a qualified Missouri main stree t
21 district. If the total amount of such res erved tax cr edits have been authorized, upper
22 floor housing pr ojects located in a qualified Missouri main stree t district may re ceive
23 tax cr edits fro m the r emaining unre served amount of tax cred its. If the total amount of
24 r eserved tax credi ts have not been authorized by the department, pr ojects not located in
25 a qualified Missouri main street district may be authorized tax cred its fro m such
26 r eserved amount.
27 4. If the maximum amount of tax cr edits allowed in any fiscal year , as pr ovided
28 pursuant to this section, is authorized, the maximum amount of tax cre dits allowed
29 pursuant to subsection 1 of this section shall be adjusted by the per centage incr ease in
30 the Consumer Price Index for All Urban Consumers, or its successor index, as such
31 index is defined and officially repo rted by the United States Department of Labor , or its
32 successor agency . Only one such adjustment shall be made for each instance in which
33 the prov isions of this subsection apply . The department shall publish such adjusted
34 amount.
35 5. In the event the department authorizes tax cred its equal to the total amount
36 available pursuant to this section, or sufficient that when totaled with all other
37 appr ovals, the amount available pursuant to this section is exhausted, all taxpayers with
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38 applications then awaiting appr oval or ther eafter submitted for appr oval shall be
39 notified by the department that no additional appr ovals shall be granted during the
40 fiscal year and shall be notified of the priority given to such taxpayer's application then
41 awaiting appr oval. Such applications shall be kept on file by the department and shall
42 be consider ed for appr oval for tax cr edits in the order established in this section in the
43 event that additional tax cr edits become available due to the res cission of appr ovals, or
44 when a new fiscal year's allocation of tax cre dits becomes available for appr oval.
99.728. 1. T o obtain appr oval for tax credi ts pursuant to sections 99.720 to
2 99.730, a taxpayer shall submit an application for tax credi t authorization to the
3 department. The department shall have sixty days to revi ew the application and shall
4 notify the applicant in writing within thirty days of the decision of whether the
5 application has been authorized for tax credi ts. Each application for appr oval,
6 including any applications r eceived for supplemental allocations of tax credi ts as
7 pr ovided pursuant to subsection 2 of section 99.730, shall, if appr oved, be authorized for
8 tax credi ts in the order of submission.
9 2. Each application shall be reviewe d by the department for appr oval. In order
10 to receive appr oval, an application shall include:
11 (1) Pr oof of ownership or site control. Pr oof of ownership shall include evidence
12 that the taxpayer is the fee simple owner of the eligible prop erty , such as a warranty
13 deed or a closing statement. Pr oof of site contr ol may be evidenced by a leasehold
14 inter est or an option to acquire such an interes t. If the taxpayer is in the pr ocess of
15 acquiring fee simple ownership, pro of of site contro l shall include an executed sales
16 contract or an executed option to pur chase the eligible pr operty;
17 (2) Floor plans of the existing structur e, arch itectural plans, and, wher e
18 applicable, plans of the pr oposed conversion of the structur e, as well as pro posed
19 additions;
20 (3) The estimated cost of conversion, the anticipated total costs of the pr oject, the
21 actual basis of the pr operty , as shown by pr oof of actual acquisition costs, the
22 anticipated total labor costs, the estimated pr oject start date, and the estimated pr oject
23 completion date;
24 (4) Pr oof that the pr operty is an eligible pr operty;
25 (5) A copy of all land use and building appr ovals r easonably necessary for the
26 commencement of the pro ject; and
27 (6) Any other information which the department may reas onably requi re to
28 r eview the pr oject for appr oval.
29
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30 Only the prop erty for which a pr operty addr ess is prov ided in the application shall be
31 r eviewed for appr oval. Once selected for revi ew , a taxpayer shall not be permitted to
32 r equest the revie w of another pro perty for appr oval in the place of the pr operty
33 contained in such application. Any disappr oved application shall be r emoved fr om the
34 r eview process . If an application is rem oved fr om the review proc ess, the department
35 shall notify the taxpayer in writing of the decision to rem ove such application. The
36 taxpayer may subsequently submit a rev ised application. For the purposes of
37 determining the order of submission and authorization of credit s, the r evised
38 application shall be consider ed a new application.
39 3. If the department determines that the application meets the r equir ements of
40 sections 99.720 to 99.730 to receive an authorization of tax cred its, the taxpayer shall be
41 notified in writing of the appr oval for an amount of tax cr edits equal to the amounts
42 pr ovided in sections 99.722 and 99.724, less any amount of tax cr edits previ ously
43 appr oved pursuant to this section. T ax cr edits appr oved pursuant to this section shall
44 be appr oved and administered independently and shall not be evaluated in conjunction
45 with any other state tax cred it prog ram. Such appr ovals shall be granted to applications
46 in the order of priority established under this section and shall requ ire full compliance
47 ther eafter with all other requ irem ents of law as a condition to any claim for such tax
48 cr edits.
49 4. Following appr oval of an application, the identity of the taxpayer contained in
50 such application shall not be modified except:
51 (1) The taxpayer may add partners, members, or shar eholders as part of the
52 ownership structur e, so long as the principal rem ains the same; pr ovided, however , that
53 subsequent to the commencement of r enovation and the expenditure of at least ten
54 per cent of the pr oposed r ehabilitation budget, rem oval of the principal for failure to
55 perform duties and the appointment of a new principal ther eafter shall not constitute a
56 change of the principal; or
57 (2) Wher e the ownership of the project is changed due to a for eclosure, deed in
58 lieu of a for eclosur e or voluntary conveyance, or a transfer in bankruptcy .
59 5. All taxpayers with applications rece iving appr oval shall submit within one
60 hundr ed twenty days following the award of credits evidence of the capacity of the
61 applicant to finance the costs and expenses for the conversion of the eligible pr operty in
62 the form of a line of cr edit or letter of commitment subject to the lender's termination
63 for a material adverse change impacting the extension of cr edit. If the department
64 determines that a taxpayer has failed to comply with the requi rem ents of this
65 subsection, then the department shall notify the applicant of such failure and the
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66 applicant shall have a thirty-day period fr om the date of such notice to submit
67 additional evidence to rem edy the failur e.
68 6. All taxpayers with applications receivi ng appr oval, excluding projects
69 described in subsection 2 of section 99.726, shall commence conversion within twelve
70 months of the date of issuance of the letter fr om the department granting the appr oval
71 for tax cr edits. For the purposes of this subsection, "commence conversion" shall mean
72 that, as of the date in which actual physical work, contemplated by the ar chitectural
73 plans submitted with the application, has begun, the taxpayer has incurr ed no less than
74 ten percen t of the estimated costs of reh abilitation prov ided in the application.
75 T axpayers with appr oval of a project shall submit evidence of compliance with the
76 pr ovisions of this subsection. If the department determines that a taxpayer has failed to
77 comply with the r equir ements of this subsection, the appr oval for the amount of tax
78 cr edits for such taxpayer shall be res cinded and such amount of tax cred its shall then be
79 included in the total amount of tax cre dits fr om which appr ovals may be granted. Any
80 taxpayer whose appr oval shall be subject to res cission shall be notified of such fr om the
81 department and, upon r eceipt of such notice, may submit a new application for the
82 pr oject.
99.730. 1. T o claim a tax cred it authorized pursuant to sections 99.720 to 99.730,
2 a taxpayer with appr oval shall, except with respect to a tax credi t authorized pursuant
3 to subsection 2 of section 99.726, apply for final appr oval and issuance of tax cred its
4 fr om the department, which shall determine the final amount of qualified conversion
5 expenditur es and whether the completed r ehabilitation meets the req uirements of this
6 section. A taxpayer shall submit to the department a final application demonstrating:
7 (1) That the taxpayer has substantially converted a qualified converted building
8 or upper floor housing;
9 (2) Satisfactory evidence of any qualified conversion expenditures for the
10 structur e, as determined by the department; and
11 (3) Any other information reas onably requ ested by the department rela ting to
12 verifying qualified conversion expenditur es or compliance with the req uire ments of
13 sections 99.720 to 99.730.
14
15 For financial institutions, tax cr edits authorized pursuant to sections 99.720 to 99.730
16 shall be deemed to be rede velopment tax credi ts for the purposes of sections 135.800 to
17 135.830. The appr oval of all applications and the issuing of certificates of eligible tax
18 cr edits to taxpayers shall be performed by the department. The department shall
19 inform a taxpayer of final appr oval by letter and shall issue, to the taxpayer , tax credit
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20 certificates. The taxpayer shall attach the certificate to all Missouri income tax ret urns
21 on which the cred it is claimed.
22 2. (1) The department shall issue seventy-five percen t of the appr oved tax
23 cr edits within sixty days of receivi ng all requ ired final application materials. W ithin
24 sixty days, the department shall make a final determination of costs and issue the
25 r emaining twenty-five perce nt of appr oved tax cr edits, or reque st rep ayment fr om the
26 applicant if the final determination r esults in an over -issuance of tax credi ts. In the
27 event the amount of qualified conversion expenditures incurr ed by a taxpayer would
28 r esult in the issuance of an amount of tax cr edits in excess of the amount authorized
29 pursuant to subsection 3 of section 99.728, such taxpayer may apply to the department
30 for issuance of tax credits in an amount equal to such excess. Applications for issuance
31 of tax cred its in excess of the amount provi ded under a taxpayer's application shall be
32 made on a form prescribed by the department. Such applications shall be subject to all
33 pr ovisions rega rding priority pr ovided under subsection 1 of section 99.728.
34 (2) For tax cre dits authorized pursuant to subsection 2 of section 99.726, the
35 applicant may submit to the department an application for the issuance of tax cred its
36 annually prior to final completion of the pr oject. Upon appr oval of the annual
37 application for issuance, the department shall issue eighty per cent of the amount of tax
38 cr edits that would res ult fr om the qualified expenditures , prov ided the total amount of
39 cr edits issued to date does not exceed the total amount of cre dits authorized for the
40 pr oject to date. Any rem aining authorized tax cr edits shall be issued upon the final
41 appr oval of the pro ject. The department shall issue eighty per cent of the appr oved
42 cr edits within sixty days of r eceiving all requ ired application materials. W ithin sixty
43 days, the department shall make a final determination of costs and issue any rem aining
44 authorized tax cr edits upon the final completion of the phased project , or req uest
45 r epayment if an over -issuance of cred its is determined.
46 3. The department shall determine, on an annual basis, the overall economic
47 impact to the state fr om the re habilitation of eligible prop erty pursuant to sections
48 99.720 to 99.730.
49 4. No taxpayer shall be issued tax credits for qualified conversion expenditures
50 on a qualified converted building within twenty-seven years of a previ ous issuance of tax
51 cr edits pursuant to sections 99.720 to 99.730 on such qualified converted building.
52 5. The department may pr omulgate any rules and r egulations necessary to
53 administer the pr ovisions of sections 99.720 to 99.730. Any rule or portion of a rule, as
54 that term is defined in section 536.010, that is creat ed under the authority delegated in
55 this section shall become effective only if it complies with and is subject to all of the
56 pr ovisions of chapter 536 and, if applicable, section 536.028. This section and chapter
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57 536 are nonseverable and if any of the powers vested with the general assembly
58 pursuant to chapter 536 to revi ew , to delay the effective date, or to disappr ove and annul
59 a rule are subsequently held unconstitutional, then the grant of rulemaking authority
60 and any rule prop osed or adopted after August 28, 2026, shall be invalid and void.
61 6. Notwithstanding the provi sions of section 23.253 of the Missouri sunset act to
62 the contrary:
63 (1) The progr am authorized pursuant to sections 99.720 to 99.730 shall
64 automatically sunset on December 31, 2034, unless rea uthorized by an act of the general
65 assembly;
66 (2) If such progra m is reau thorized, the pro gram authorized pursuant to
67 sections 99.720 to 99.730 shall automatically sunset twelve years after the effective date
68 of the reau thorization;
69 (3) Sections 99.720 to 99.730 shall terminate on September first of the calendar
70 year immediately following the calendar year in which the progra m authorized
71 pursuant to sections 99.720 to 99.730 is sunset; and
72 (4) The pr ovisions of this subsection shall not be construed to limit or in any way
73 impair:
74 (a) A taxpayer's ability to complete a pr oject and rec eive authorization for tax
75 cr edits pursuant to sections 99.720 to 99.730 for any pr oject for which the taxpayer has
76 submitted an initial application on or befor e the date the pr ogram authorized pursuant
77 to sections 99.720 to 99.730 expir es; or
78 (b) The department of r evenue's ability to r edeem tax credits authorized on or
79 befor e the date the progra m authorized pursuant to sections 99.720 to 99.730 expir es, or
80 a taxpayer's ability to r edeem such tax cred its.
✔
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