2005 Regular Session
To: Municipalities; Ways and Means
By: Representative Fleming
AN ACT TO AMEND SECTIONS 17-21-5 AND 17-21-7, MISSISSIPPI CODE OF 1972, TO REVISE EXEMPTIONS FROM MUNICIPAL AD VALOREM TAX FOR CENTRAL BUSINESS DISTRICTS, HISTORIC PRESERVATION DISTRICTS, BUSINESS IMPROVEMENT DISTRICTS, URBAN RENEWAL DISTRICTS, REDEVELOPMENT DISTRICTS OR HISTORIC LANDMARKS; TO AMEND SECTION 21-45-3, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF REDEVELOPMENT PROJECT; TO AMEND SECTION 21-45-7, MISSISSIPPI CODE OF 1972, TO CONFORM THE DIVISION OF AD VALOREM TAXES UNDER A TAX INCREMENT FINANCING PLAN FOR THE PURPOSES OF THIS ACT; TO AMEND SECTION 27-31-31, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; TO AUTHORIZE AN INCOME TAX CREDIT FOR TAXPAYERS WHO INCUR COSTS AND EXPENSES FOR THE REHABILITATION OF ELIGIBLE PROPERTY WHICH IS A CERTIFIED HISTORIC STRUCTURE OR A STRUCTURE IN A CERTIFIED HISTORIC DISTRICT IN AN AMOUNT EQUAL TO 25% OF THE TOTAL COSTS AND EXPENSES OF REHABILITATION INCURRED, IF THE COSTS AND EXPENSES ASSOCIATED WITH REHABILITATION EXCEED 50% OF THE TOTAL BASIS IN THE PROPERTY AND THE REHABILITATION IS CONSISTENT WITH THE STANDARDS OF THE SECRETARY OF THE UNITED STATES DEPARTMENT OF THE INTERIOR AS DETERMINED BY THE MISSISSIPPI DEPARTMENT OF ARCHIVES AND HISTORY; TO PROVIDE THAT IF THE AMOUNT OF THE TAX CREDIT EXCEEDS THE TOTAL STATE INCOME TAX LIABILITY FOR THE YEAR IN WHICH THE REHABILITATED PROPERTY IS PLACED IN SERVICE, THE AMOUNT THAT EXCEEDS THE TOTAL STATE INCOME TAX LIABILITY MAY BE CARRIED BACK TO EACH OF THE THREE TAX YEARS PRECEDING THE TAX YEAR IN WHICH THE ORIGINAL CREDIT IS CLAIMED AND CARRIED FORWARD FOR THE TEN SUCCEEDING TAX YEARS; TO ALLOW THE TAXPAYER TO TRANSFER, SELL OR ASSIGN SUCH CREDITS; TO PROVIDE THE MANNER IN WHICH SUCH CREDIT MAY BE CLAIMED; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 17-21-5, Mississippi Code of 1972, is amended as follows:
17-21-5. (1) The governing authorities of any municipality of this state may, in their discretion, exempt from any or all municipal ad valorem taxes * * * for a period of not more than ten (10) years, any privately owned new structures and any new renovations of and improvements to existing structures lying within a designated central business district or historic preservation district or on a historic landmark site, as determined by the municipality, but only in the event such structures shall have been constructed, renovated or improved pursuant to the requirements of an approved project of the municipality for the development of the central business district and/or the preservation and revitalization of historic landmark sites or historic preservation districts. The tax exemption authorized herein may be granted only after written application has been made to the governing authorities of the municipality by any person, firm or corporation claiming the exemption, and an order passed by the governing authorities of such municipality finding that the construction, renovation or improvement of said property is for the promotion of business, commerce or industry in the designated central business district, for the promotion of residential density in the municipality's redevelopment areas or for the promotion of historic preservation.
(2) The governing authorities of any municipality of this state with a population of twenty-five thousand (25,000) or more according to the latest federal decennial census, may, in their discretion, exempt from any or all municipal ad valorem taxes * * * for a period of not more than ten (10) years, any privately owned new structures and any new renovations of and improvements to existing structures lying within a designated business improvement district, urban renewal district or redevelopment district, as determined by the municipality, but only in the event such structures shall have been constructed, renovated or improved pursuant to the requirements of an approved project of the municipality for the development of the business improvement district, urban renewal district or redevelopment district. The tax exemption authorized herein may be granted only after written application has been made to the governing authorities of the municipality by any person, firm or corporation claiming the exemption, and an order passed by the governing authorities of such municipality finding that the construction, renovation or improvement of said property is for the promotion of business, commerce or industry or for the promotion of residential density in the municipality's redevelopment areas in the designated business improvement district, urban renewal district or redevelopment district.
SECTION 2. Section 17-21-7, Mississippi Code of 1972, is amended as follows:
17-21-7. The board of supervisors of any county wherein there is located a municipality described in Section 17-21-5 may, in its discretion, exempt from any or all county ad valorem taxes * * * for a period of not more than ten (10) years, any privately owned new structures and any new renovations of and improvements to existing structures where an exemption has been granted by the municipality in accordance with the provisions of Section 17-21-5. The exemption from county ad valorem taxes may be granted only upon written application to the board of supervisors of the county by any person, firm or corporation claiming the exemption. A copy of the order of the governing authority of the municipality granting an exemption from municipal ad valorem taxes shall be attached to the application as an exhibit thereto.
SECTION 3. Section 21-45-3, Mississippi Code of 1972, is amended as follows:
21-45-3. For the purposes of this chapter, the following terms shall have the meanings given them in this section unless a different meaning is clearly indicated by the context:
(a) "Project area" includes:
(i) Areas in which there is a significant amount of buildings or improvements which, by reason of dilapidation, deterioration, age, obsolescence, inadequate provision for ventilation, light, air, sanitation or open spaces, high density of population and overcrowding or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, are conducive to ill health, transmission of disease, infant mortality, juvenile delinquency or crime and are detrimental to the public health, safety, morals or welfare;
(ii) Areas in which are located a building or buildings that are of important value for purposes of historical preservation, as designated by the Department of Archives and History;
(iii) Areas which by reason of a significant amount of defective or inadequate street layout, faulty lot layout in relation to size, adequacy, accessibility or usefulness, unsanitary or unsafe conditions, deterioration of site improvements, diversity of ownership, tax delinquency, defective or unusual conditions of title, improper subdivision or obsolete platting or the existence of conditions which endanger life or property by fire or other causes, or any combination of such factors, substantially impair or arrest the sound growth of the community, retard the provision of housing accommodations or constitute an economic or social liability and are a menace to the public health, safety, morals or welfare in their present condition and use;
(iv) Areas in which the construction, renovation, repair or rehabilitation of property for residential, commercial or other uses is in the public interest; or
(v) A project for which a certificate of public convenience and necessity has been obtained by the municipality pursuant to the Regional Economic Development Act.
(b) A "redevelopment project" may include any work or undertaking by a municipality:
(i) To acquire project areas or portions thereof, including lands, structures or improvements the acquisition of which is necessary or incidental to the proper clearance, development or redevelopment of such areas or to the prevention of the spread or recurrence of slum conditions or conditions of blight;
(ii) To clear any project areas by demolition or removal of existing buildings, structures, streets, utilities or other improvements thereon and to install, construct or reconstruct streets, utilities, bulkheads, boat docks and site improvements essential to the preparation of sites for uses in accordance with the redevelopment plan and public improvements to encourage private redevelopment in accordance with the redevelopment plan; * * *
(iii) To sell or lease property acquired by a municipality as part of a redevelopment project for not less than its fair value for uses in accordance with such redevelopment plan to retain property or public improvements for public use in accordance with the redevelopment plan; or
(iv) To subsidize or create incentives for catalytic, privately owned construction that will serve to increase the municipality's future tax revenues, create employment opportunities or lead to residential growth for central business districts, historic preservation districts, business improvement districts, urban renewal districts, redevelopment districts or historic landmarks.
"Redevelopment project" may also include the preparation of a redevelopment plan, the planning, survey and other work incident to a redevelopment project and the preparation of all plans and arrangements for carrying out a redevelopment project, relocation of businesses and families required under applicable law, and upon a determination, by resolution of the governing body of the municipality in which such land is located, that the acquisition and development of additional real property not within a project area is essential to the proper clearance or redevelopment of a project area or a necessary part of the general slum clearance program of the municipality, the acquisition, planning, preparation for development or disposal of such land shall constitute a redevelopment project.
(c) "Redevelopment plan" means a plan for the acquisition, clearance, reconstruction, rehabilitation or future use of a redevelopment project area which shall be sufficiently complete:
(i) To indicate its relationship to definite local objectives as to appropriate land uses and improved traffic, public transportation, public utilities, recreational, residential, commercial and community facilities and other public improvements; and
(ii) To indicate proposed land uses, waterfront uses, if any, and building requirements in the area.
A redevelopment plan may include interlocal cooperation agreements between a municipality and a county whereby both agree to pledge revenues payable to them to fund the debt of service of any indebtedness incurred pursuant to this chapter.
(d) "Governing body" means the governing body of any municipality or the board of supervisors of any county.
(e) "Developer" means any person, firm, corporation, partnership or other entity which enters into an agreement with a municipality whereby the developer agrees to construct, operate and maintain or procure the construction, operation and maintenance of buildings or other facilities or improvements upon land or waterfront being a part of a redevelopment project.
(f) "Municipality" means any city or town incorporated under the laws of the State of Mississippi or any county.
(g) "Clerk" means the municipal clerk or chancery clerk, as the case may be.
SECTION 4. Section 21-45-7, Mississippi Code of 1972, is amended as follows:
21-45-7. (1) Any redevelopment project may contain a provision that municipal and county ad valorem taxes, if any, levied upon taxable property in a redevelopment project or municipal sales taxes collected within the area, or both, shall be divided according to a tax increment financing plan.
(2) For central business districts, historic preservation districts, business improvement districts, urban renewal districts, redevelopment districts or historic landmarks, school district taxes shall also be divided according to the plan.
SECTION 5. Section 27-31-31, Mississippi Code of 1972, is amended as follows:
27-31-31. * * * The governing authorities of any municipality are authorized, in their discretion, to grant exemptions from ad valorem taxation * * * for new structures or improvements to or renovations of existing structures located in the designated central business district of the municipality, for a period of not more than ten (10) years from the date of the completion of the new structure or the improvement to or renovation of the existing structure for which the exemption is granted.
* * *
SECTION 6. (1) As used in this section, the following terms mean, unless the context requires otherwise:
(a) "Certified historic structure," a property located in Mississippi and listed individually on the Nation Register of Historic Places;
(b) "Eligible property," property located in Mississippi and offered or used for residential or business purposes;
(c) "Structure in a certified historic district," a structure located in Mississippi which is certified by the Mississippi Department of Archives and History as contributing to the historic significance of a certified historic district listed on the National Register of Historic Places, or a local district that has been certified by the United States Department of the Interior.
(2) Any person, firm, partnership, trust, estate or corporation incurring costs and expenses for the rehabilitation of eligible property, which is a certified historic structure or structure in a certified historic district, shall be entitled to a credit against the taxes imposed under this chapter in an amount equal to twenty-five percent (25%) of the total costs and expenses of rehabilitation incurred after January 1, 2006, which shall include, but not be limited to, qualified rehabilitation expenditures as defined under Section 47(c)(2)(A) of the Internal Revenue Code of 1986, as amended, and the related regulations thereunder, provided the rehabilitation costs associated with rehabilitation and the expenses exceed fifty percent (50%) of the total basis in the property and the rehabilitation meets standards consistent with the standards of the Secretary of the United States Department of the Interior for rehabilitation as determined by the Mississippi Department of Archives and History.
(3) (a) If the amount of such credit exceeds the total state income tax liability for the year in which the rehabilitated property is placed in service, the amount that exceeds the state income tax liability may be carried back to any of the three (3) preceding years and carried forward for credit against the taxes imposed for the succeeding ten (10) years, or until the full credit is used, whichever occurs first. Not-for-profit entities, including, but not limited to, corporations organized as not-for-profit corporations, shall be ineligible for the tax credits authorized under this section. Tax payers eligible for such tax credits may transfer, sell or assign the credits. Credits granted to a partnership, a limited liability company taxed as a partnership or multiple owners of property shall be passed through to the partners, members or owners respectively pro rata or pursuant to an executed agreement among the partners, members or owners documenting an alternate distribution method.
(b) The transferee, buyer or assignee of a tax credit may use acquired credits to offset up to one hundred percent (100%) of the tax liabilities imposed under this chapter. The assignor shall perfect such transfer by notifying the Mississippi Development Authority in writing within thirty (30) calendar days following the effective date of the transfer and shall provide any information as may be required by the Mississippi Development Authority to administer and carry out the provisions of this section.
(4) (a) To claim the credit authorized pursuant to this section, the taxpayer shall apply to the Mississippi Development Authority which, in consultation with the Mississippi Department of Archives and History, shall determine the amount of eligible rehabilitation costs and expenses and whether the rehabilitation meets the standards of the Secretary of the United States Department of the Interior for rehabilitation as determined by the Mississippi Department of Archives and History. For financial institutions credits authorized pursuant to this section shall be deemed to be "economic development credits." The issuing of certificates of eligible credits to taxpayers shall be performed by the Mississippi Development Authority. The taxpayer shall attach the certificate to all Mississippi income tax returns on which the credit is claimed.
(b) The Mississippi Development Authority shall determine, on an annual basis, the overall economic impact to the state from the rehabilitation of eligible property.
SECTION 7. This act shall take effect and be in force from and after July 1, 2005.