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 85-5.020 - Applications
Universal Citation: 4 MO Code of State Regs 85-5.020
Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This proposed amendment will make the rule reflect the three different stages when an application may be submitted, clarifying the steps within and the requirements for each application type or stage, in order to make it easier for prospective applicants to follow the rule's requirements. This rule includes significant substantive changes: (a) the addition of a fifteen business day opportunity to cure an incomplete application; (b) the elimination of a three-tier scoring system, replaced with a simpler passing and failing score system; (c) the elimination of a two one-month application cycles per fiscal year, replacing it with a single cycle open for 12 months; (d) changing the order in which tax credits are allocated from a statutory set-aside for projects in qualified census tracts; (e) allowing a project to be authorized tax credits upon a conditional approval from the State Historic Preservation Office or the National Park Service, rather than only upon an unconditional approval from SHPO; and (f) adding the ability to receive tax credits for certain hard costs incurred one year before a preliminary application for tax credits is submitted.
(1) Preliminary Application.
(A) All applicants seeking an authorization
of tax credits for a project shall submit a preliminary application to the
department.
(B) The department
shall post on its website a checklist of required information for a preliminary
application. If a preliminary application submitted to the department is
incomplete, the department will give an applicant one (1) opportunity to
provide information or documents to cure any deficiencies within fifteen (15)
business days of being notified by the department. The department will reject
all preliminary applications that remain incomplete after one (1) opportunity
to cure.
(C) A complete preliminary
application shall be evaluated by the department for eligibility of the
project.
1. Eligibility criteria for a
preliminary application include that the project is an eligible property, is a
certified historic structure or structure in a certified historic district,
meets the requirements in section
253.559.2, RSMo, and other
statutory requirements.
(D) Subsection (1)(E) of this rule shall not
apply to projects to receive less than two hundred seventy-five thousand
dollars ($275,000) of tax credits.
(E) The preliminary application shall include
the following:
1. Signed letters of support
for the project from the local elected officials in the local municipality in
which the project is located, as set forth in
4 CSR
85-5.060(1)(B);
2. The type and amount of local incentives or
public financing committed to the project;
3. Private financing and developer
equity;
4. The estimated number of
net new jobs created in the state as a result of the project;
5. The amount of projected net fiscal benefit
of the project to the municipality, which may be provided by the applicant, or
if the applicant so chooses, determined by the department, based on information
provided by the applicant. The projected net fiscal benefit to the municipality
shall include the potential multiplier effect for the project and shall clearly
state the period in which the municipality would realize such net fiscal
benefit;
6. Information regarding
the vacancy or underutilization prior to rehabilitation; and
7. A statement of whether the project's
address is located in an economically distressed area as set forth in
4 CSR
85-5.050(1)(A) through (E), and if
so, which type of area, as well as evidence of same.
(F) A complete preliminary application will
be evaluated for eligibility and scored by the department in accordance with
section 253.559.3(1),
RSMo, subsection (1)(J) of this rule, and
5 CSR
85-5.030, 5.040, 5.050, and 5.060.
(G) The department shall accept preliminary
applications and excess tax credits applications in one (1) cycle for each
state fiscal year. The application cycle for each state fiscal year shall open
no later than July 1 and shall close on June 30.
(H) Pursuant to section
253.559.1, RSMo, preliminary
applications and excess tax credits applications within each cycle shall be
prioritized for review in the order of the date on which the application was
postmarked, with the oldest postmarked date within the cycle receiving
priority. For preliminary applications and excess tax credit applications
postmarked on the same day, the lottery process used to determine the order in
which an application was received by the department will rely on digital
timestamps, with the applications being reviewed from oldest to newest,
regardless of whether the application is a preliminary application or an excess
tax credits application.
(I)
Subject to sufficient QCT tax credit cap or statewide tax credit cap, as
applicable, preliminary applications for projects meeting the following
requirements are not subject to the application cycle set forth in subsection
(1)(G) of this rule and shall be accepted by the department at any time:
1. The applicant or an entity with a direct
or indirect controlling interest in applicant has received a formal, written
proposal for business development incentives executed by the director of the
department with regard to the project;
2. The project will be occupied by the applicant or an
entity with a direct or indirect controlling interest in applicant upon
completion; and
3. The applicant
or an entity with a direct or indirect controlling interest in applicant has
committed to relocating to Missouri from another state.
(J) Prior to an application cycle, the
department shall post on its website the program guidelines, the checklist
described in subsection (1)(B) of this rule, scoring criteria, and a scorecard
for the cycle.
1. The scoring criteria and
scorecard shall set forth the maximum points assigned to the required criteria
in section 253.559.3, RSMo.
2. The program guidelines, scoring criteria,
and scorecard shall state the minimum amount of points necessary for a project
to be authorized tax credits. Projects scoring below that threshold will be
denied.
(K) The
department shall not authorize tax credits for a project in a preliminary
application until such preliminary application has received written,
unconditional or conditional approval from State Historic Preservation Office
or the National Park Service of the U.S. Department of the Interior.
(L) For projects that are located within a
qualified census tract, credits shall first be authorized from the QCT tax
credit cap before being authorized from the statewide tax credit cap.
(M) Except as otherwise provided, no
applicant shall submit a preliminary application to the department within five
(5) years following the issuance of tax credits in connection with the same
property. The department shall deny any such preliminary application it
receives.
(2) Final Application.
(A) An applicant seeking
issuance of tax credits, other than excess tax credits, for a completed project
shall submit a final application to the department.
(B) The department shall post on its website
a checklist of required information for a final application.
(C) The department shall accept final
applications year-round.
(D) The
department, in consultation with the State Historic Preservation Office, shall
determine the final amount of QRE on the project and whether the completed
rehabilitation meets the standards of the Secretary of the U.S. Department of
the Interior for rehabilitation as determined by the State Historic
Preservation Office.
(E) Subject to
section 253.559.9, RSMo, an applicant
may obtain an independent review of an applicant's cost certification by one
(1) or more third-party certified public accountant firms to be paid entirely
by the applicant. The cost certification review shall not constitute QRE under
the program. The department may publish guidance regarding such independent
cost certification review in the program guidelines.
(F) The eligibility of project costs as QREs
shall be evaluated using the rules and statutes in effect on the date the
applicant's preliminary application was submitted to the department.
(G) The following applies in determining
whether a cost is a QRE:
1. An applicant's
hard costs set forth in a preliminary application will be QREs only if such
costs are-
A. Incurred on or after the date
on which the department receives the preliminary application, except that
certain hard costs incurred no earlier than one (1) year prior to the date on
which the department receives the preliminary application will be QRE if such
costs are-
(I) Limited to costs necessary for
stabilization of the structure that are cost-mitigating (delaying stabilization
would result in higher QRE) or to make the structure suitable for safe entry
and inspection; and
(II) Not in an
amount in excess of ten percent (10%) of the QRE amount sought in the
preliminary application. The amount up to ten percent (10%) may be QRE, but
amounts exceeding ten percent (10%) shall not be
QRE;
2. An
applicant's soft costs set forth in a preliminary application will be QREs only
if such costs are incurred no earlier than one (1) year prior to the date on
which the department receives the preliminary application;
3. To be a QRE, all sources of funds for
payment of project costs, invoices for project costs, and other documentation
relating to the project must be in applicant's name and authorized by
applicant.
A. Project costs shall not be QREs
if paid by the third party on behalf of the applicant, regardless of whether
applicant reimburses the third party.
B. A title company paying on behalf of an
applicant shall not be considered a third party for purposes of this
paragraph;
4. All loans
related to the project must be made to applicant, provided that loans may be
made to applicant's owner if applicant is a single member limited liability
company where the single member is an individual. Project costs paid with
proceeds of loans not as described in this paragraph shall be considered costs
paid by a third party, and shall not be QREs; and
5. Additional limitations on QREs are in
4 CSR
85-5.080, Phased Projects,
4 CSR
85-5.090, Developer Fees and General Contractor
Overhead and Profit, and
4 CSR
85-5.100, Not-for-Profits.
(3) Excess Tax Credits Application.
(A) All applicants seeking excess
tax credits shall submit an excess tax credits application to the
department.
(B) If an excess tax
credits application submitted to the department is incomplete, the department
will give an applicant one (1) opportunity to provide information or documents
to cure any deficiencies within fifteen (15) business days of being notified by
the department. The department will reject all excess tax credits applications
that remain incomplete after one (1) opportunity to cure.
(C) A complete excess tax credits application
shall be evaluated by the department for eligibility of the project.
1. Eligibility criteria for an excess tax
credits application include that the department previously issued tax credits
after determining the total QRE for the project after a final application was
submitted, and the amount of QREs for the project exceeded the amount of QREs
for which tax credits were issued by the department, and other statutory
requirements.
(D) The
excess tax credits application shall include the information and documents set
forth for a preliminary application in subsection (1)(E) of this
rule.
(E) A complete excess tax
credits application will be evaluated for eligibility and scored by the
department in accordance with section
253.559.3(1),
RSMo, subsection (1) (J) of this rule, and
4 CSR
85-5.030, 5.040, 5.050, and 5.060.
(F) Subsection (3)(E) of this rule shall not
apply to an excess tax credits application if the project received its
authorization of tax credits in 2019 or later. Such a project will not be
re-evaluated or re-scored, and the evaluation or score given the project for
the evaluation and scoring of the project's preliminary application will be
used for the excess tax credits application.
(G) The department shall accept excess tax
credits applications in the same cycle as preliminary applications, as set
forth in subsection (1)(G) of this rule.
(H) Excess tax credits applications will be
reviewed and scored in the order set forth in subsection (1)(H) of this
rule.
(I) Prior to an application
cycle, in addition to the required information and documents in subsection (1)
(J) of this rule, the department shall post on its website a checklist for
excess tax credits applications.
(J) Except as set forth in subsection (3)(F)
of this rule, excess tax credits applications will be scored in the same
manner, using the same scoring criteria and scorecard as preliminary
applications described in subsection (1)(J) of this rule. Projects scoring
below the minimum amount of points necessary for a project to be authorized tax
credits will be denied.
(K) Excess
tax credits applications will be apportioned to the QCT tax credit cap or
statewide tax credit cap in the manner set forth in subsection (1)(L) of this
rule.
*Original authority: 620.010, RSMo 1971, amended 1981, 1983, 1986, 1989, 1990, 1993, 1994, 1995, 1999, 2001, 2007, 2008.
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