SB 379 - This act modifies the Distressed Areas Land Assemblage Tax Credit Act.
Currently, an applicant for this tax credit is entitled to a tax credit in an amount equal to fifty percent of the applicant's acquisition costs, which includes among other things the cost of demolishing vacant buildings, and for a five-year period, one hundred percent of the applicant's interest costs. These acquisition costs include the reasonable costs of maintaining an eligible parcel of land for a five-year period after acquiring the parcel. This act extends the five-year time limitation on receiving a tax credit for maintenance costs and interest costs to twelve years. The applicant will be allowed to receive a tax credit equal to one hundred percent of the reasonable costs of demolition. Title insurance, surveying costs, and certain design costs are added to the types of eligible acquisition costs.
Currently, for a developer to be eligible for a tax credit under this program the redevelopment agreement between the developer and the municipal authority must prohibit the developer from redeveloping more than 75 percent of the area identified in the redevelopment plan. This act eliminates this restriction for projects in a specific type of redevelopment area.
This act allows parcels to be part of an eligible project if they are acquired on behalf of the applicant through affiliated companies controlled by the applicant. Parcels acquired before August 28, 2007 from a municipal authority will not be considered an eligible parcel.
Currently, project areas must contain at least fifty acres and the average number of parcels per acre in an area must be four or more. This act requires projects in specific areas to contain at least 150 acres and eliminates the four parcels per acre requirement for such projects. An eligible project cannot include a parcel acquired from a municipal authority.
This act also allows a developer applying for the tax credit to file for the credit on a quarterly basis, rather than annually.
Currently, the aggregate amount of tax credits that may be authorized under the program is $95 million. This act allows for authorization of $95 million in tax credits after August 28, 2013. The cap on the amount of tax credits that can be issued under this program each year is increased from 20 to 30 million dollars.
The act divides the amount of tax credits that can be issued each year into two pools. If there is more than one applicant entitled to tax credits in that year, then half of the annual amount of money will go to projects in a specific type of redevelopment area and half for areas located in other project areas. If the Department of Economic Development does not issue tax credits equal to all of each pool of money by December 31st, the other kind of projects can get the remaining money in the other pool.
Currently, the Department of Economic Development is prohibited from authorizing tax credits under this program after August 28, 2013. This act extends the amount of time the department can authorize tax credits under this program until August 28, 2019.
This act is substantially similar to HB 423 (2013) and similar to HB 1130 (2012), HB 1723 (2012), and SB 783 (2012). This act is similar to a provision in HCS/HB 698 (2013) and HCS/SB 112 (2013).