FIRST REGULAR SESSION
SENATE BILL NO. 35
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR ROBERTS.
0483S.01I KRISTINA MARTIN, Secretary
AN ACT
To amend chapter 99, RSMo, by adding thereto one new section relating to tax credits for
downtown revitalization.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapter 99, RSMo, is amended by adding the reto 1
one new section, to be known as section 99.720, to read as 2
follows:3
99.720. 1. This section shall be known and may be 1
cited as the "Revitalizing Missouri Downtowns and Main 2
Streets Act". 3
2. As used in this section, the following terms mean, 4
unless the context requires otherwise: 5
(1) "Department", the Missouri department of economic 6
development; 7
(2) "Qualified conversion expenditures", any amount 8
properly chargeable to capital account. The term "qualified 9
conversion expenditures" shall not include: 10
(a) The cost of acquisition; 11
(b) Any expenditure attributable to the enlargement of 12
an existing building; or 13
(c) Tax-exempt properties; 14
(3) "Qualified converted building", any building and 15
its structural components if: 16
(a) Prior to conversion, such building was 17
nonresidential real property, as defined in 26 U.S.C. 18 SB 35 2
Section 168(e)(2)(B), as amended, which was leased, or 19
available for lease, to office tenants; 20
(b) Such building has been subs tantially converted 21
from an office use to a residential, retail, or other 22
commercial use; and 23
(c) Such building was initially placed in service at 24
least twenty-five years before the beginning of the 25
conversion; 26
(4) "Qualified Missouri main street district", an 27
accredited, associated, or affiliated main street district 28
of the Missouri main street program created pursuant to 29
sections 251.470 to 251.485; 30
(5) "Substantially converted", qualified conversion 31
expenditures incurred during the twenty-four-month period 32
preceding final approval of tax credits that in total are 33
greater than: 34
(a) The adjusted basis of such building and its 35
structural components, as determined as of the beginning of 36
the first day of such twenty -four-month period, or of the 37
holding period of the building, whichever is later; or 38
(b) Fifteen thousand dollars if the property is 39
located in a qualified Missouri main street district, or 40
five hundred thousand dollars if the property is not located 41
in a qualified Missouri main street district. 42
In the case of any conversion which may reasonably be 43
expected to be completed in phases set forth in 44
architectural plans and specifications completed before the 45
conversion begins, qualified conversion expenditu res shall 46
be totaled for the sixty -month period preceding final 47
approval of tax credits rather than the twenty -four-month 48
period preceding such final approval; 49 SB 35 3
(6) "Upper floor housing", any housing that is 50
attached to or contained in the same bu ilding as commercial 51
property, whether located on the ground floor behind the 52
traditional storefront or on other floors of the property. 53
3. (1) For all tax years beginning on or after 54
January 1, 2026, the department shall issue a taxpayer a 55
credit against the taxpayer's state tax liability equal to 56
twenty-five percent of qualified conversion expenditures 57
with respect to a qualified converted building, or thirty 58
percent of qualified conversion expenditures with respect to 59
upper floor housing l ocated in a qualified Missouri main 60
street district. If the amount of such tax credit exceeds 61
the taxpayer's state tax liability for the year in which tax 62
credits are issued, the amount that exceeds the state tax 63
liability may be carried back to any o f the three preceding 64
tax years or carried forward for credit against state tax 65
liability for the succeeding ten tax years, or until the 66
full credit is used, whichever occurs first. 67
(2) Tax credits authorized pursuant to this section 68
may be transferred, sold, or assigned. 69
(3) Tax credits authorized for a partnership, a 70
limited liability company taxed as a partnership, or 71
multiple owners of property shall be passed through to the 72
partners, members, or owners respectively pro rata, or 73
pursuant to an executed agreement among the partners, 74
members, or owners documenting an alternate distribution 75
method. 76
(4) The assignee of a tax credit may use the acquired 77
tax credits to offset up to one hundred percent of the 78
taxpayer's state tax l iability. The assignor shall perfect 79
such transfer by notifying the department in writing within 80
thirty calendar days following the effective date of the 81 SB 35 4
transfer and shall provide any information as may be 82
required by the department. 83
4. (1) The total amount of tax credits authorized 84
pursuant to this section shall not exceed fifty million 85
dollars in any fiscal year. 86
(2) The provisions of subdivision (1) of this 87
subsection shall not apply to tax credits authorized for 88
qualified converted buildings of more than seven hundred 89
fifty thousand square feet, provided that no more than fifty 90
million dollars in tax credits shall be authorized for such 91
qualified converted buildings in any given fiscal year. 92
5. Twenty-five percent of the m aximum amount of tax 93
credits available to be authorized to taxpayers in a fiscal 94
year shall be authorized solely for projects located in a 95
qualified Missouri main street district. If the total 96
amount of such reserved tax credits have been authorized, 97
projects located in a qualified Missouri main street 98
district may receive tax credits from the remaining 99
unreserved amount of tax credits. If the total amount of 100
reserved tax credits have not been authorized by the 101
department, projects not located in a qualified Missouri 102
main street district may be authorized tax credits from such 103
reserved amount. 104
6. If the maximum amount of tax credits allowed in any 105
fiscal year, as provided pursuant to subsection 4 of this 106
section, is issued, the maximum a mount of tax credits 107
allowed pursuant to subsection 4 of this section shall be 108
adjusted by the percentage increase in the Consumer Price 109
Index for All Urban Consumers, or its successor index, as 110
such index is defined and officially reported by the Unit ed 111
States Department of Labor, or its successor agency. Only 112
one such adjustment shall be made for each instance in which 113 SB 35 5
the provisions of this subsection apply. The department 114
shall publish such adjusted amount. 115
7. (1) To obtain approval for tax credits pursuant to 116
this section, a taxpayer shall submit an application for tax 117
credits to the department. Each application for approval, 118
including any applications received for supplemental 119
allocations of tax credits as provided pursuant to 120
subsection 14 of this section, shall be prioritized in the 121
order of submission. 122
(2) Each application shall be reviewed by the 123
department for approval. In order to receive approval, an 124
application shall include: 125
(a) Proof of ownership or site control. Proof of 126
ownership shall include evidence that the taxpayer is the 127
fee simple owner of the eligible property, such as a 128
warranty deed or a closing statement. Proof of site control 129
may be evidenced by a leasehold interest or an option to 130
acquire such an interest. If the taxpayer is in the process 131
of acquiring fee simple ownership, proof of site control 132
shall include an executed sales contract or an executed 133
option to purchase the eligible property; 134
(b) Floor plans of the existing st ructure, 135
architectural plans, and, where applicable, plans of the 136
proposed conversion of the structure, as well as proposed 137
additions; 138
(c) The estimated cost of conversion, the anticipated 139
total costs of the project, the actual basis of the 140
property, as shown by proof of actual acquisition costs, the 141
anticipated total labor costs, the estimated project start 142
date, and the estimated project completion date; 143
(d) Proof that the property is an eligible property; 144 SB 35 6
(e) A copy of all land u se and building approvals 145
reasonably necessary for the commencement of the project; and 146
(f) Any other information which the department may 147
reasonably require to review the project for approval. 148
Only the property for which a property address is prov ided 149
in the application shall be reviewed for approval. Once 150
selected for review, a taxpayer shall not be permitted to 151
request the review of another property for approval in the 152
place of the property contained in such application. Any 153
disapproved application shall be removed from the review 154
process. If an application is removed from the review 155
process, the department shall notify the taxpayer in writing 156
of the decision to remove such application. Disapproved 157
applications shall lose priority in the review process. A 158
disapproved application, which is removed from the review 159
process, may be resubmitted, but shall be deemed to be a new 160
submission for purposes of the priority procedures described 161
in this section. If the department determines th at a 162
taxpayer has failed to comply with the requirements of this 163
subsection, then the department shall notify the applicant 164
of such failure and the applicant shall have a thirty -day 165
period from the date of such notice to submit additional 166
evidence to remedy the failure. 167
8. If the department deems the application sufficient, 168
the taxpayer shall be notified in writing of the approval 169
for an amount of tax credits equal to twenty -five percent of 170
qualified conversion expenditures, less any amount of tax 171
credits previously approved. Such approvals shall be 172
granted to applications in the order of priority established 173
under this section and shall require full compliance 174
thereafter with all other requirements of law as a condition 175 SB 35 7
to any claim for such credits. If the department 176
disapproves an application, the taxpayer shall be notified 177
in writing of the reasons for such disapproval. A 178
disapproved application may be resubmitted. 179
9. Following approval of an application, the identity 180
of the taxpayer contained in such application shall not be 181
modified except: 182
(1) The taxpayer may add partners, members, or 183
shareholders as part of the ownership structure, so long as 184
the principal remains the same; provided, however, that 185
subsequent to the commencement of renovation and the 186
expenditure of at least ten percent of the proposed 187
rehabilitation budget, removal of the principal for failure 188
to perform duties and the appointment of a new principal 189
thereafter shall not constitute a change o f the principal; or 190
(2) Where the ownership of the project is changed due 191
to a foreclosure, deed in lieu of a foreclosure or voluntary 192
conveyance, or a transfer in bankruptcy. 193
10. In the event that the department authorizes tax 194
credits equal to the total amount available pursuant to 195
subsection 4 of this section, or sufficient that when 196
totaled with all other approvals, the amount available 197
pursuant to subsection 4 of this section is exhausted, all 198
taxpayers with applications then awaiting approval or 199
thereafter submitted for approval shall be notified by the 200
department that no additional approvals shall be granted 201
during the fiscal year and shall be notified of the priority 202
given to such taxpayer's application then awaiting 203
approval. Such applications shall be kept on file by the 204
department and shall be considered for approval for tax 205
credits in the order established in this section in the 206
event that additional credits become available due to the 207 SB 35 8
rescission of approvals or when a new fiscal year's 208
allocation of credits becomes available for approval. 209
11. All taxpayers with applications receiving approval 210
shall submit within sixty days following the award of 211
credits evidence of the capacity of the applicant to finance 212
the costs and expenses for the conversion of the eligible 213
property in the form of a line of credit or letter of 214
commitment subject to the lender's termination for a 215
material adverse change impacting the extension of credit. 216
If the department determines th at a taxpayer has failed to 217
comply with the requirements of this subsection, then the 218
department shall notify the applicant of such failure and 219
the applicant shall have a thirty -day period from the date 220
of such notice to submit additional evidence to r emedy the 221
failure. 222
12. All taxpayers with applications receiving 223
approval, excluding projects described in subdivision (2) of 224
subsection 4 of this section, shall commence conversion 225
within nine months of the date of issuance of the letter 226
from the department granting the approval for tax credits. 227
For the purposes of this subsection, "commence conversion" 228
shall mean that, as of the date in which actual physical 229
work, contemplated by the architectural plans submitted with 230
the application, has begun, the taxpayer has incurred no 231
less than ten percent of the estimated costs of 232
rehabilitation provided in the application. Taxpayers with 233
approval of a project shall submit evidence of compliance 234
with the provisions of this subsection. If the department 235
determines that a taxpayer has failed to comply with the 236
requirements of this subsection, the approval for the amount 237
of tax credits for such taxpayer shall be rescinded and such 238
amount of tax credits shall then be included in the total 239 SB 35 9
amount of tax credits from which approvals may be granted. 240
Any taxpayer whose approval shall be subject to rescission 241
shall be notified of such from the department and, upon 242
receipt of such notice, may submit a new application for the 243
project. 244
13. To claim a tax credit authorized pursuant to this 245
section, a taxpayer with approval shall apply for final 246
approval and issuance of tax credits from the department, 247
which shall determine the final amount of qualified 248
conversion expenditures and whether the completed 249
rehabilitation meets the requirements of this section. A 250
taxpayer shall submit to the department a final application 251
demonstrating: 252
(1) That the taxpayer has substantially converted a 253
qualified converted building; 254
(2) Satisfactory evidence of any qualified conversion 255
expenditures for the structure, as determined by the 256
department; and 257
(3) Any other information reasonably requested by the 258
department. 259
For financial institutions, tax credits authorized pursuant 260
to this section shall be deemed to be redevelopment tax 261
credits for the purposes of sections 135.800 to 135.830. 262
The approval of all applications and the issuing of 263
certificates of eligible tax credits to taxpayers shall be 264
performed by the department. The department shall inform a 265
taxpayer of final approval by letter and shall issue, to the 266
taxpayer, tax credit certificates. The taxpayer shall 267
attach the certificate to all Missouri income tax returns on 268
which the credit is claimed. 269 SB 35 10
14. Except as expressly provided in this subsection, 270
tax credit certificates shall be issued in the final year 271
that qualified conversion expenditures are incurred, or 272
within the twelve-month period immediately following the 273
conclusion of such rehabilitation. In the event the amount 274
of qualified conversion expenditures incurred by a taxpayer 275
would result in the issuance of an amount of tax credits in 276
excess of the amount provided under such taxpayer's approval 277
granted pursuant to subsection 8 of this section, such 278
taxpayer may apply to the department for issuance of tax 279
credits in an amount equal to such excess. Applications for 280
issuance of tax credits in excess of the amount provided 281
under a taxpayer's application shall be made on a form 282
prescribed by the depar tment. Such applications shall be 283
subject to all provisions regarding priority provided under 284
subsection 7 of this section. 285
15. The department shall determine, on an annual 286
basis, the overall economic impact to the state from the 287
rehabilitation of eligible property pursuant to this section. 288
16. No taxpayer shall be issued tax credits for 289
qualified conversion expenditures on a qualified converted 290
building within twenty -seven years of a previous issuance of 291
tax credits pursuant to this sec tion on such qualified 292
converted building. 293
17. The department may promulgate any rules and 294
regulations necessary to administer the provisions of this 295
section. Any rule or portion of a rule, as that term is 296
defined in section 536.010, that is cre ated under the 297
authority delegated in this section shall become effective 298
only if it complies with and is subject to all of the 299
provisions of chapter 536 and, if applicable, section 300
536.028. This section and chapter 536 are nonseverable and 301 SB 35 11
if any of the powers vested with the general assembly 302
pursuant to chapter 536 to review, to delay the effective 303
date, or to disapprove and annul a rule are subsequently 304
held unconstitutional, then the grant of rulemaking 305
authority and any rule proposed or adopt ed after August 28, 306
2025, shall be invalid and void. 307