SB 1032 - This act modifies provisions relating to the Historic Preservation tax credit, and renames such tax credit the "Missouri Historic, Heritage, Tourism, and Rural Revitalization Act".
Currently, the amount of tax credits that may be authorized in a fiscal year is limited to $140 million. This act indexes such limit to annual increases in inflation. For fiscal years 2019-2024, such amount shall be reduced by $5-$20 million, as described in the act. The amount of such reductions in a fiscal year may be appropriated by the General Assembly into the State Capitol Commission Fund in such fiscal year, provided that the amount by which such appropriation exceeds the amount received by the Fund from other sources shall be included in the amount of tax credits that may be issued under the act. (Sections 8.007 and 253.550)
This act allows qualifying counties, as defined in the act, to designate certain structures as "essential community or heritage facilities", which shall be structures that are significant in the history, architecture, archeology, or culture of the state or its communities, which shall have been constructed at least 50 years prior to an application for tax credits, and which shall have at least $100,000 in estimated eligible costs and expenses to be incurred in the rehabilitation of such structure. $10 million of the amount of tax credits that may be authorized under this act shall be reserved for such essential community or heritage facility projects, provided that no county shall have more than two such projects approved in a given fiscal year, and provided that such projects shall only receive tax credits from the reserved amount. Any amount of reserved tax credits not authorized by March 31 of a fiscal year shall no longer stand reserved, and may be authorized for any project under the act.
This act also modifies the tax credits which may be claimed under the act for residential structures. Currently, such structures shall be nonincome producing single-family, owner-occupied residential property. This act allows the structure to be either owner-occupied or occupied by a relative within the third consanguinity of the applicant. For applications approved on or after July 1, 2018, any residential project located in a county that is not a qualified county shall only receive tax credits if it is located in a distressed area, as described in the act. (Section 253.550)
Currently, the amount of tax credits that a project may receive is limited to 25% of the total costs and expenses of rehabilitation incurred. This act modifies such amount for residential projects to 25% of total costs or $50,000, whichever is less. For essential community or heritage facility projects, such amount shall be 50% of total costs or $500,000, whichever is less. For all other projects located in a qualifying county, such amount shall be 35% of total costs. For projects located in a qualifying county that also receive Low Income Housing tax credits, such amount shall be 25%. For all other projects located in a county that is not a qualifying county, such amount shall remain 25%. If the scope of an approved project materially changes, such project shall be eligible to receive additional tax credits, as described in the act. (Sections 253.545 and 253.559.3)
This act modifies the carry-back and carry-forward provisions of tax credits issued under this act by reducing such periods from a 3-year carry-back and 10-year carry-forward to a 1-year carry-back and 5-year carry-forward for all tax credits authorized on or after July 1, 2018.
Tax credits may also be claimed by not-for-profit entities only if such tax credits are authorized for essential community or heritage facility projects. (Section 253.557)
Projects that receive approval for tax credits shall commence rehabilitation within eighteen months, rather than two years, of the date of approval. Additionally, "commencement of rehabilitation" shall mean that as of the date that physical work has begun, the taxpayer shall have incurred no less than twenty percent, rather than ten percent, of the estimated costs of rehabilitation. Taxpayers shall notify the Department of any loss of site control, or of failure to obtain site control, within ten days of such failure. Taxpayers may voluntarily forfeit project approval at any time. The amount of tax credits authorized for such forfeited or rescinded project shall be made available for other projects. If a taxpayer later submits an application for the same project, any expenditures which are incurred after the date of the rescinded or forfeited approval shall remain eligible expenditures for the purposes of determining the amount of tax credits. (Section 253.259.6)
After completion of a project, the taxpayer is required to submit an application for the final approval of costs and issuance of tax credits. Within 60 days of receipt of such application, the Department shall issue to the taxpayer tax credits in the amount of 75% of the amount of tax credits for which the taxpayer is eligible based on the application for final approval, or 75% of the amount of tax credits approved under the initial application, whichever is less. Within one year of an application for final approval, the Department shall make a determination of final costs and the amount of tax credits to be issued, and shall issue the balance of tax credits owed to the applicant and not issued in the initial tax credit issuance. If the amount initially issued exceeds the amount that the taxpayer is eligible for, as determined by the Department's final approval, the taxpayer shall repay such excess amount to the Department. (Section 253.559.7)
Upon issuance of tax credits, a taxpayer shall remit a fee of 2% of the value of the tax credits to the Department, 0.25% of the value of the tax credits to the Department for the administration of the act, and a fee of 0.25% of the value of the tax credits to the Department of Natural Resources. (Section 253.559.8)
Projects that are not located in a qualifying county shall not also receive Low Income Housing tax credits for the same project. (Section 253.559.10)
An applicant or their duly authorized representative may appeal any official decision made by the Department with regard to the application submitted to an independent third-party appeals officer designated by the Department. Such appeal shall be submitted in writing within 30 days of the applicant's receipt of the decision being appealed. The appeals officer shall deliver a written decision no later than 90 days after initial receipt of the appeal. (Section 253.559.11)
This act is substantially similar to HB 2717 (2018).