99.1205. Citation of law--definitions--tax credit allowed, amount--procedure to claim--cap on aggregate tax credit amount--report required--rulemaking authority.
Citation of law--definitions--tax credit allowed, amount--procedure toclaim--cap on aggregate tax credit amount--reportrequired--rulemaking authority.
99.1205. 1. This section shall be known and may be cited as the"Distressed Areas Land Assemblage Tax Credit Act".
2. As used in this section, the following terms mean:
(1) "Acquisition costs", the purchase price for the eligible parcel,costs of environmental assessments, closing costs, real estate brokeragefees, reasonable demolition costs of vacant structures, and reasonablemaintenance costs incurred to maintain an acquired eligible parcel for aperiod of five years after the acquisition of such eligible parcel.Acquisition costs shall not include costs for title insurance and survey,attorney's fees, relocation costs, fines, or bills from a municipality;
(2) "Applicant", any person, firm, partnership, trust, limitedliability company, or corporation which has:
(a) Incurred, within an eligible project area, acquisition costs forthe acquisition of land sufficient to satisfy the requirements undersubdivision (8) of this subsection; and
(b) Been appointed or selected, pursuant to a redevelopment agreementby a municipal authority, as a redeveloper or similar designation, under aneconomic incentive law, to redevelop an urban renewal area or aredevelopment area that includes all of an eligible project area or whoseredevelopment plan or redevelopment area, which encompasses all of aneligible project area, has been approved or adopted under an economicincentive law. In addition to being designated the redeveloper, theapplicant shall have been designated to receive economic incentives onlyafter the municipal authority has considered the amount of the tax creditsin adopting such economic incentives as provided in subsection 8 of thissection. The redevelopment agreement shall provide that:
a. The funds generated through the use or sale of the tax creditsissued under this section shall be used to redevelop the eligible projectarea;
b. No more than seventy-five percent of the urban renewal areaidentified in the urban renewal plan or the redevelopment area identifiedin the redevelopment plan may be redeveloped by the applicant; and
c. The remainder of the urban renewal area or the redevelopment areashall be redeveloped by co-redevelopers or redevelopers to whom theapplicant has assigned its redevelopment rights and obligations under theurban renewal plan or the redevelopment plan;
(3) "Certificate", a tax credit certificate issued under thissection;
(4) "Condemnation proceedings", any action taken by, or on behalf of,an applicant to initiate an action in a court of competent jurisdiction touse the power of eminent domain to acquire a parcel within the eligibleproject area. Condemnation proceedings shall include any and all actionstaken after the submission of a notice of intended acquisition to an ownerof a parcel within the eligible project area by a municipal authority orany other person or entity under section 523.250, RSMo;
(5) "Department", the Missouri department of economic development;
(6) "Economic incentive laws", any provision of Missouri law pursuantto which economic incentives are provided to redevelopers of a parcel orparcels to redevelop the land, such as tax abatement or payments in lieu oftaxes, or redevelopment plans or redevelopment projects approved or adoptedwhich include the use of economic incentives to redevelop the land.Economic incentive laws include, but are not limited to, the land clearancefor redevelopment authority law under sections 99.300 to 99.660, the realproperty tax increment allocation redevelopment act under sections 99.800to 99.865, the Missouri downtown and rural economic stimulus act undersections 99.915 to 99.1060, and the downtown revitalization preservationprogram under sections 99.1080 to 99.1092;
(7) "Eligible parcel", a parcel:
(a) Which is located within an eligible project area;
(b) Which is to be redeveloped;
(c) On which the applicant has not commenced construction prior toNovember 28, 2007;
(d) Which has been acquired without the commencement of anycondemnation proceedings with respect to such parcel brought by or onbehalf of the applicant. Any parcel acquired by the applicant from amunicipal authority shall not constitute an eligible parcel; and
(e) On which all outstanding taxes, fines, and bills levied bymunicipal governments that were levied by the municipality during the timeperiod that the applicant held title to the eligible parcel have been paidin full;
(8) "Eligible project area", an area which shall have satisfied thefollowing requirements:
(a) The eligible project area shall consist of at least seventy-fiveacres and may include parcels within its boundaries that do not constitutean eligible parcel;
(b) At least eighty percent of the eligible project area shall belocated within a Missouri qualified census tract area, as designated by theUnited States Department of Housing and Urban Development under 26 U.S.C.Section 42, or within a distressed community as that term is defined insection 135.530, RSMo;
(c) The eligible parcels acquired by the applicant within theeligible project area shall total at least fifty acres, which may consistof contiguous and noncontiguous parcels;
(d) The average number of parcels per acre in an eligible projectarea shall be four or more;
(e) Less than five percent of the acreage within the boundaries ofthe eligible project area shall consist of owner-occupied residences whichthe applicant has identified for acquisition under the urban renewal planor the redevelopment plan pursuant to which the applicant was appointed orselected as the redeveloper or by which the person or entity was qualifiedas an applicant under this section on the date of the approval or adoptionof such plan;
(9) "Interest costs", interest, loan fees, and closing costs.Interest costs shall not include attorney's fees;
(10) "Maintenance costs", costs of boarding up and securing vacantstructures, costs of removing trash, and costs of cutting grass and weeds;
(11) "Municipal authority", any city, town, village, county, publicbody corporate and politic, political subdivision, or land trust of thisstate established and authorized to own land within the state;
(12) "Municipality", any city, town, village, or county;
(13) "Parcel", a single lot or tract of land, and the improvementsthereon, owned by, or recorded as the property of, one or more persons orentities;
(14) "Redeveloped", the process of undertaking and carrying out aredevelopment plan or urban renewal plan pursuant to which the conditionswhich provided the basis for an eligible project area to be included in aredevelopment plan or urban renewal plan are to be reduced or eliminated byredevelopment or rehabilitation; and
(15) "Redevelopment agreement", the redevelopment agreement orsimilar agreement into which the applicant entered with a municipalauthority and which is the agreement for the implementation of the urbanrenewal plan or redevelopment plan pursuant to which the applicant wasappointed or selected as the redeveloper or by which the person or entitywas qualified as an applicant under this section; and such appointment orselection shall have been approved by an ordinance of the governing body ofthe municipality, or municipalities, or in the case of any city not withina county, the board of aldermen, in which the eligible project area islocated. The redevelopment agreement shall include a time line forredevelopment of the eligible project area. The redevelopment agreementshall state that the named developer shall be subject to the provisions ofchapter 290, RSMo.
3. Any applicant shall be entitled to a tax credit against the taxesimposed under chapters 143, 147, and 148, RSMo, except for sections 143.191to 143.265, RSMo, in an amount equal to fifty percent of the acquisitioncosts, and one hundred percent of the interest costs incurred for a periodof five years after the acquisition of an eligible parcel. No tax creditsshall be issued under this section until after January 1, 2008.
4. If the amount of such tax credit exceeds the total tax liabilityfor the year in which the applicant is entitled to receive a tax credit,the amount that exceeds the state tax liability may be carried forward forcredit against the taxes imposed under chapters 143, 147, and 148, RSMo,for the succeeding six years, or until the full credit is used, whicheveroccurs first. The applicant shall not be entitled to a tax credit fortaxes imposed under sections 143.191 to 143.265, RSMo. Applicantsentitled to receive such tax credits may transfer, sell, or assign the taxcredits. Tax credits granted to a partnership, a limited liability companytaxed as a partnership, or multiple owners of property shall be passedthrough to the partners, members, or owners respectively pro rata orpursuant to an executed agreement among the partners, members, or ownersdocumenting an alternate distribution method.
5. A purchaser, transferee, or assignee of the tax credits authorizedunder this section may use acquired tax credits to offset up to one hundredpercent of the tax liabilities otherwise imposed under chapters 143, 147,and 148, RSMo, except for sections 143.191 to 143.265, RSMo. A seller,transferor, or assignor shall perfect such transfer by notifying thedepartment in writing within thirty calendar days following the effectivedate of the transfer and shall provide any information as may be requiredby the department to administer and carry out the provisions of thissection.
6. To claim tax credits authorized under this section, an applicantshall submit to the department an application for a certificate. Anapplicant shall identify the boundaries of the eligible project area in theapplication. The department shall verify that the applicant has submitteda valid application in the form and format required by the department. Thedepartment shall verify that the municipal authority held the requisitehearings and gave the requisite notices for such hearings in accordancewith the applicable economic incentive act, and municipal ordinances. Onan annual basis, an applicant may file for the tax credit for theacquisition costs, and for the tax credit for the interest costs, subjectto the limitations of this section. If an applicant applying for the taxcredit meets the criteria required under this section, the department shallissue a certificate in the appropriate amount. If an applicant receives atax credit for maintenance costs as a part of the applicant's acquisitioncosts, the department shall post on its Internet web site the amount andtype of maintenance costs and a description of the redevelopment projectfor which the applicant received a tax credit within thirty days after thedepartment issues the certificate to the applicant.
7. The total aggregate amount of tax credits authorized under thissection shall not exceed ninety-five million dollars. At no time shallthe annual amount of the tax credits issued under this section exceedtwenty million dollars. If the tax credits that are to be issued underthis section exceed, in any year, the twenty million dollar limitation, thedepartment shall either:
(1) Issue tax credits to the applicant in the amount of twentymillion dollars, if there is only one applicant entitled to receive taxcredits in that year; or
(2) Issue the tax credits on a pro rata basis to all applicantsentitled to receive tax credits in that year. Any amount of tax credits,which an applicant is, or applicants are, entitled to receive on an annualbasis and are not issued due to the twenty million dollar limitation, shallbe carried forward for the benefit of the applicant or applicants tosubsequent years.
No tax credits provided under this section shall be authorized after August28, 2013. Any tax credits which have been authorized on or before August28, 2013, but not issued, may be issued, subject to the limitationsprovided under this subsection, until all such authorized tax credits havebeen issued.
8. Upon issuance of any tax credits pursuant to this section, thedepartment shall report to the municipal authority the applicant's name andaddress, the parcel numbers of the eligible parcels for which the taxcredits were issued, the itemized acquisition costs and interest costs forwhich tax credits were issued, and the total value of the tax creditsissued. The municipal authority and the state shall not consider theamount of the tax credits as an applicant's cost, but shall include the taxcredits in any sources and uses and cost benefit analysis reviewed orcreated for the purpose of awarding other economic incentives. The amountof the tax credits shall not be considered an applicant's cost in theevaluation of the amount of any award of any other economic incentives, butshall be considered in measuring the reasonableness of the rate of returnto the applicant with respect to such award of other economic incentives.The municipal authority shall provide the report to any relevantcommission, board, or entity responsible for the evaluation andrecommendation or approval of other economic incentives to assist in theredevelopment of the eligible project area. Tax credits authorized underthis section shall constitute redevelopment tax credits, as such term isdefined under section 135.800 RSMo, and shall be subject to all provisionsapplicable to redevelopment tax credits provided under sections 135.800 to135.830 RSMo.
9. The department may promulgate rules to implement the provisions ofthis section. Any rule or portion of a rule, as that term is defined insection 536.010, RSMo, that is created under the authority delegated inthis section shall become effective only if it complies with and is subjectto all of the provisions of chapter 536, RSMo, and, if applicable, section536.028, RSMo. This section and chapter 536, RSMo, are nonseverable and ifany of the powers vested with the general assembly pursuant to chapter 536,RSMo, to review, to delay the effective date, or to disapprove and annul arule are subsequently held unconstitutional, then the grant of rulemakingauthority and any rule proposed or adopted after August 28, 2007, shall beinvalid and void.
(L. 2007 1st Ex. Sess H.B. 1, A.L. 2009 H.B. 191)