SCS/HCS/HB 1143 - This act makes various modifications relating to tax credits for distressed communities. With regard to the Rebuilding Communities and Neighborhood Preservation Act, the act:

(1) Expands the definition of "eligible residence" to include condominiums, entire apartment buildings, or single apartments within an apartment building;

(2) Expands the definition of "new residence" to include condominiums, owner-occupied units, or other units intended to be owner-occupied in multiple unit structures or as separate adjacent single-family units regardless of whether or not these units are located in a distressed community;

(3) Expands the definition of "project" to include the new construction, rehabilitation, or substantial rehabilitation of multiple residences, whether comprised of one structure containing multiple single-family residences or multiple individual structures, in addition to single residences;

(4) Increases the value of the eligible residence tax credit from 15% of eligible costs up to $25,000 to 20% of eligible costs up to $40,000;

(5) Increases the value of the qualifying residence tax credit from 15% of eligible costs up to $40,000 to 20% of eligible costs up to $40,000;

(6) Limits the tax credits available for the rehabilitation and construction of residences in distressed communities and census blocks to $1.5 million for projects commenced after August 28, 2002. Under current law, of the $16 million in community improvement tax credits allowed, $8 million are to be allocated for eligible residence programs and $8 million for qualifying residence programs. The act states that if, by October 1 of the calendar year, the Director of the Department of Economic Development has issued all $8 million of the credits allowed for one of these programs and has not issued the entire $8 million allowance for the other program, the Director is required to reallocate 70% of any unused tax credits from the program which has not reached its $8 million cap to the one which has. The reallocated credits will be given to taxpayers who have applied for, but have not received, tax credits in that same year and who are engaged in projects in the area where the tax credit cap has been met for that same year. The maximum reallocated tax credit for any project may not exceed $500,000;

(7) Allows one application for tax credits to be submitted to the Department for preliminary approval in the case of projects involving the new construction, rehabilitation, or substantial rehabilitation of more than one residence. Tax credits will be awarded upon final approval of an application and presentation of acceptable proof that substantial construction of each individual residence has been completed, rather than delaying issuance of the tax credits until the entire project is substantially complete; and

(8) Expands the definition of "distressed community" as it relates to tax credits for investment in or relocating a business to a distressed community by reducing the population requirement for certain census block groups from 2,500 to 500 and by increasing the median household income threshold for municipalities not located in a metropolitan statistical area.

The act also requires the Department of Economic Development to designate one enterprise zone in Wright County and one in Pulaski County.

Finally, the act prohibits interest from accruing retroactively on an overpayment of taxes resulting from the carryback to prior years of a tax credit.

This act authorizes the City of Springfield, in cooperation with the Director of the Department of Economic Development, to designate one satellite zone within the City. The Director must approve the City's overall plan for enterprise zone and satellite zone use prior to the designation.

This act authorizes removal of property from the Springfield Community Improvement District, or relocation of property from a certain zone of designation in the CID to a different zone. A public hearing must be conducted and approval by the board. The district must be able to meet its financial obligations without the revenues from the proposed portion to be removed.

This act also creates the "Riverfront Development District Act". This allows the port authority to establish a riverfront development district by resolution. The port authority is given the power to carry out and effectuate the purposes of this section, including the ability to loan proceeds, make expenditures and enter into agreements.

The definition of "new residence" has been changed to allow Christian and Green counties to receive tax credit incentives to construct low income housing.

This act makes various changes to economic development programs relating to distressed communities and small business investment tax credits.

The act:

(1) Changes the definition of a community development corporation to stress industrial, economic, entrepreneurial, commercial and civic development of projects that benefit low- income individuals and communities;

(2) Lowers the investment requirement of principal owners of Missouri small businesses eligible for investment from 50% of the business to 35% of the business;

(3) Eliminates the designation of a "target area" for purposes of identifying areas of poverty by the Department of Social Services;

(4) Increases the maximum percentage of investment ownership allowed in a small business to qualify for a tax credit from 50% to 65%;

(5) Reduces the time period requirement for investment in a small business from 5 years to 3 years and excludes any sale, change of control, or the going public of a business from the minimum period of time for investment for purposes of the small business investment tax credit program;

(6) Reduces the percentage of employees required to be located at a business contained within distressed communities from 75% to 60% and increases the maximum number of employees at a business contained within a distressed community from 100 to 150 to qualify for the distressed communities tax credit program;

(7) Allows the leasing of certain technology equipment to qualify as an expense for purposes of obtaining a tax credit;

(8) Increases the allowable tax credit percentage of the amount of qualified contribution to a qualified fund for purposes of tax credits for contributions to innovation centers from 50% to 75%;

(9) Allows any unused credits for these tax credit programs from the previous year to be added to any statewide caps for these programs in future years;

(10) Expands the availability of follow-up capital to include businesses which have previously received follow-up capital within the last 3 years for purposes of tax credits for contributions to innovation centers;

(11) Requires the Department of Economic Development to pursue a revocation of the tax credits only from the original applicant for the tax credit.

This act also provides that the Kansas City Housing Authority shall be composed of seven members (6 appointed members and 1 elected from the tenants of housing authority). The appointed members will be nominated by a committee and appointed by the mayor. The Tenant Commissioner election will be conducted by a resident organization. Each commissioner shall serve a term of 4 years. At the beginning, the appointed members will serve staggered terms. Each commissioner will receive a stipend of $200 per month in addition to costs. A quorum shall consist of a minimum of four members.
SARAH MORROW