SCS/SB 249 - This act makes various changes to the law concerning economic development of distressed communities.

The act expands the definition of a "distressed community" in the law relating to tax credits for investment in or relocating a business to a distressed community. A distressed community will include areas within metropolitan statistical areas that are designated as either a federal empowerment zone, a federal enhanced enterprise community, or state enterprise zones designated prior to January 1, 1986, but will not include the expansion of those zones done after March 16, 1988.

The act expands the applicability of Section 135.478 so as to include the County of Christian and the County of Greene within the scope of that section. Section 135.478 contains definitions for the Tax Credit for Rehabilitation and Construction of Residences in Distressed Communities and Census Blocks. The definition modified by this amendment is that of a "new residence". This amendment also provides that the vacant property to be developed must be classified as agricultural property and must be within the city limits of a municipality served by a municipal sanitary sewer service. In addition, this property may be located in a flood plain and still qualify for development.

The act also modifies provisions of the Rebuilding Communities and Neighborhood Preservation Act, in that it:

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

(2) Expands the definition of "new residence" to include separate adjacent single-family units;

(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 (e.g., an apartment building) or multiple individual structures (e.g., townhouses or individual homes), in addition to single residences;

(4) Corrects the definition of "qualifying residence" so that it accurately references census blocks groups within metropolitan statistical areas;

(5) Clarifies the term "nonmetropolitan statistical area" as any county not located in a metropolitan statistical area;

(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 provides 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) 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 but does not raise the annual cap for this tax credit;

(8) 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, but does not raise the annual cap for this tax credit; and

(9) 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.
JEFF CRAVER