HB2407--WORKFORCEHOUSINGTAXINCENTIVE
SPONSOR: Sharpe(4)
Thisbillestablishesthe"WorkforceHousingTaxIncentives
Program"withintheDepartmentofEconomicDevelopment. The
Programdefinessignificantterms,whichinclude"brownfield"and
"greenfield"sitesanddifferenttypesofcommunitiesandhousing
projects(Section620.2022,RSMo.).
Proposedhousingprojectsmustmeetatleastoneofthreespecified
dwellingunitminimums;projectsconsistofthreetypesof
rehabilitation andtwoprojecttypesthatrelatetogreenfield
sites.Thebillspecifiesmaximumsforaveragedwellingunitcosts
fortheprojecttypeandlocation. TheDepartmentmustprimarily
considerthemostrecentannualCensusBureaubuildingpermits
surveyandhistoricalprogramdataindeterminingthemaximum
averagedwellingunitcost.TheunitsmustmeettheFederal
housingqualitystandardsintheFederalcode(24CFR982)andall
applicablelocalsafetystandards(Section620.2024).
HousingbusinessesmustapplytotheDepartmentasspecifiedby
ruletoaccesstheProgram'staxincentives. Applicationsmust
include:
(1)Informationaboutlocalparticipationintheproject,which
includesasupportingresolutionbythegoverningbodyofthe
communitywherethehousingprojectwillbelocated,and
documentationoflocalmatchingfundsofatleast$1,000per
dwellingunit.;
(2)AnagreementbetweenthebusinessandtheDepartmentthat
specifiestheeligibilityrequirementsandhowtheywillbe
maintained. Thebusinessmustalsoreportanyenvironmentalor
workersafetylawviolationswithinthelastfiveyears,whichthe
Departmentmayusetodenyassistanceunlessitfindsthe
violationsdidnotseriouslyaffecthealth,safety,orthe
environment;
(3)Totalcostsandfundingsourcestoallowdeterminationof
adequatefinancing,actualdwellingunitcost,andthequalifying
amountoftheinvestment;and
(4)OthernecessaryinformationrequiredfortheDepartment's
evaluationoftheapplication.
Applicationswillbereviewedandscoredcompetitivelybythe
Departmentasspecifiedinthebill.Afterallapplicationsare
reviewed,theDepartmentmaymakeataxincentiveawardtoa housingproject,whichmustbeapprovedbytheDepartmentDirector.
TheDepartmentmustnotifythehousingbusinessofthetax
incentiveaward;thebillspecifiesthecontentsofthenotice.
Theamountiscontingentuponcompletionofrequirements.
Applicantsthatdonotreceiveawardsmaymakenewapplications
duringsubsequentapplicationperiods.
Uponreceivingthetaxincentiveaward,thehousingbusinessmust
enteranagreementwiththeDepartment;theagreementidentifies
theawardamountanddate,projectcompletiondeadline,andtotal
costs.Thebillestablishestwocompliancefeesandrequiresthat
projectsbecompletedinthreeyearsfromtheirregistrationwith
theDepartment. TheDepartmentmayextendthedeadlineforgood
causebyupto12months,withtheoptionforanother12months.
Uponcompletionoftheproject,thehousingbusinessmustsubmitan
examinationcompletedbyacertifiedpublicaccountantonstandards
forattestationengagementsandastatementofthefinalamountof
qualifyingnewinvestment,plusanyotherinformationthe
Departmentrequiresforcompliance.
Themaximumaggregateamountoftaxincentivesforahousing
projectis$1million. Ifahousingbusinessqualifiesfora
higheramountthanisallowed,theDepartmentandbusinessmay
negotiateanapportionmentofthereductionintaxincentives
betweenthesalestaxrefundandthehousinginvestmenttaxcredits
aslongasthetotalaggregateamountofincentivesdoesnotexceed
amountsetbythebill.
Theincentivesmustbeissuedonafirst-come,first-servedbasis
untilthemaximumamountofincentivesisreached. TheDepartment
mustmaintainalistofregisteredprojectsandprojectsawarded
incentives;itwillalsoestablishawaitlist.
Failureofahousingbusinesstocompleteaprojectortocomply
withrequirementsmayresultinrevocation,reduction,termination,
orrescissionofawardsorincentives. Repaymentofincentivesis
consideredasataxpaymentdueandpayabletotheDepartmentof
Revenue. Thecountyhastheauthoritytorecoverthevalueof
propertytaxesnotcollectedasaresultofexemptionawardedtoa
businessundertheProgram.
TheDepartmentofEconomicDevelopmentmayestablishadisaster
recoveryhousingprojectapplicationperiodafterthedeclaration
ofamajordisaster. Thebillspecifiesthattaxincentiveswill
beissuedonafirst-come,firstservedbasisuntilthemaximum
amountofincentivesisallocated. Thebillallots$35millionto
theseprojects,with$17.5millionforprojectsinsmallcities.
Allotherhousingprojectsthatarenotdisasterrecoveryhavea
$35millioncap(Section620.2026,RSMo). Ahousingbusinessmayclaimarefundofsalesandusetaxespaid
priortothecompletionofthehousingprojectthataredirectly
relatedtotheprojectandspecifiedintheprojectagreement. The
billestablishesaprocessfortherefund.Fortaxyearsbeginning
January1,2025,ahousingbusinessmayclaimataxcreditthatis
apercentageofthequalifyingnewinvestmentforhousingprojects
inanurbanareaorasmallcityandadisasterrecoveryproject.
Thebillalsoallowsaproratashareofanindividual'searnings
fromapartnership,limitedliabilitycompany,Scorporation,
estate,ortrusttoataxpayerwhoelectstohaveincometaxed
directlytotheindividual. Thebillcreatesaprocedurefor
includingtaxcreditcertificateswiththetaxpayer'staxreturn.
Underthisprocedureconsiderations paidforthetransferofthe
taxcreditarenotincludedasincomeordeductedfromincometax
underChapter143.Anyrequiredinformation,documents,orrecords
underspecifiedsubsectionsisexemptfromthePersonalPrivacy
ProtectionActinSection105.1500.
TheprovisionsofthebillwillexpireDecember31sixyearsafter
theeffectivedate(Section620.2028).