Missouri Code of State Regulations
Title 4 - Department of Economic Development
Division 85 - Division of Business and Community
Chapter 5 - Historic Preservation Tax Credit Program
Section 4 CSR 85-5.010 - Overview and Definitions

(A) Applicant. The entity or individual(s) that owns or has site control of the eligible property (as defined in section 253.545(3), RSMo) on which qualified rehabilitation expenditures have been incurred which are expected to generate tax credits. Proof of ownership shall include evidence that applicant is the fee simple owner of the eligible property, such as a warranty deed or closing statement. Proof of site control may be evidenced by a leasehold interest for a term of not less than thirty (30) years, provided that such leasehold interest is not determined to be a disqualified lease as defined in section 168(h) of the Internal Revenue Code of 1986, as amended, or an option to acquire such an interest. If the applicant is in the process of acquiring fee simple ownership, proof of site control shall include an executed sales contract or an executed option to purchase the eligible property.

(B) Department. The Department of Economic Development.

(C) Developer Fee Agreement. A written agreement for services between the developer and the applicant in the form provided by the department.

(D) Director. The director of the department.

(E) Final Application. A request for tax credits by an applicant whose project is complete and whose preliminary application has been approved by the department, on the form provided by the department.

(F) Final Completion. For the purposes of issuing state historic preservation tax credits, the project is considered complete when all work has been done on the project. The final year construction costs are incurred is the year credits will be issued. (i.e., if costs are still being incurred in 2007 then regardless of placed in service date or date of substantial completion, the credits will be issued as 2007 credits if those expenses are being claimed for tax credits.) Please note: completion dates have been established for the state historic program only. Federal guidelines vary. Final completion is separately determined for each construction period of a phased project. Costs associated with one construction period may not be carried to another construction period of a project. Each construction period is considered a separate project for audit purposes and must stand alone to meet all requirements of the HTC Program. Any exceptions must be submitted to the department before the final cost certification is submitted and must be approved in writing by the department.

(G) Guidelines. The program guidelines, which shall be published on the department's website.

(H) Hard Costs. Qualified rehabilitation expenditures, or QREs, related to the structural components of a building, including, but not limited to, walls, partitions, floors, ceilings, windows, doors, components of central air conditioning or heating systems, plumbing, electrical wiring and lighting fixtures, chimneys, stairs, escalators, elevators, sprinkling systems, fire escapes, and other components related to the operation or maintenance of the building.

(I) Identity of Interest, or Related Party. An identity of interest, or related party, may exist when:

(J) Inactive Project. Any project deemed pending as described in written communication from the department to the applicant or that has received a tax credit authorization that, in either case, has remained idle without communication from the applicant to the department providing a justified reason for such idleness, such justification to be reasonably determined by the department, for a period of at least nine (9) months from the date the last written correspondence was sent by the department to the applicant regarding the project.

(K) Incomplete Application. A preliminary application received by the department that is not submitted in accordance with the preliminary application or its instructions, regulations, or the department's guidelines published on its website.

(L) Incurred. Has the same meaning as set forth in U.S. Treasury Regulation 26 CFR 1.461-1(a)(2)(i).

(M) Non-Qualified Expenditures. All costs included in total project costs which are not qualified rehabili-tation expenditures are considered non-qualified expen-ditures, including, but not limited to, a list of non-qualified expenditures under the program published by the department in the program guidelines, which shall be effective for the state fiscal year beginning on July 1 following such publication and may be updated for subsequent state fiscal years in the reasonable determination of the department. Each project shall be held to the non-qualified expenditures effective on the date the project's preliminary application was submitted. Costs of acquisition shall constitute a non-qualified expenditure.

(N) Not-for-profit. A not-for-profit entity, including but not limited to a not-for-profit corporation formed under chapter 355, RSMo.

(O) Phased Project. A project for which the applications for tax credits submitted to the department provide for the project to be completed and reviewed in more than one construction period, as described in 4 CSR 85-5.080.

(P) Preliminary Application. A request by an applicant for an authorization of tax credits, on the form approved and made available by the department.

(Q) Preliminary Approval. The department's authorization of tax credits for a particular project under the program.

(R) Program. The Missouri Historic Preservation Tax Credit Program as set forth in sections 253.545 to 253.559, RSMo.

(S) Project. The structure or property on which qualified rehabilitation expenditures are to be incurred which is expected to generate tax credits.

(T) Qualified Rehabilitation Expenditures, or QREs. Those expen-ditures that are used as eligible basis on which to calculate the Missouri Historic Preservation Tax Credit. Such costs include, but shall not be limited to, qualified rehabilitation expenditures as defined under section 47(c)(2)(A) of the Internal Revenue Code of 1986, as amended, as determined by the department.

(U) Soft Costs. QREs other than hard costs, including, but not limited to, architect fees, engineering fees, construction management costs, utilities incurred during rehabilitation, property taxes, reasonable developer fees, construction period interest, and financing costs related to construction financing.

(V) Ta x Credits. State historic preservation tax credits authorized under the program.

(W) Total Project Costs. All costs, whether accrued or paid, pertaining to the redevelopment of the property for which an application for tax credits has been submitted. Total project costs include all QREs and all non-qualified expenditures, including the shell acquisition cost. It does not include any cash reserves established or to be established for the project, such as replacement reserves, lease-up reserves, lease commission reserves, or other cash held by, or for, the applicant.