Bill Text: MS HB766 | 2014 | Regular Session | Comm Sub

Mississippi House Bill 766 (Prior Session Legislation)

Bill Title: Tax credit; provide to eligible individuals who acquire and renovate surplus school property for economic development purposes.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2014-02-13 - Died On Calendar [HB766 Detail]

Download: Mississippi-2014-HB766-Comm_Sub.html

MISSISSIPPI LEGISLATURE

2014 Regular Session

To: Education; Ways and Means

By: Representative Moore

House Bill 766

(COMMITTEE SUBSTITUTE)

AN ACT TO PROVIDE AN INCOME TAX CREDIT TO CERTAIN INDIVIDUALS FOR THE DEVELOPMENT AND REHABILITATION OF SURPLUS SCHOOL BUILDINGS FOR TEACHER HOUSING AND ECONOMIC DEVELOPMENT PURPOSES; TO STIPULATE THE CONDITIONS OF ELIGIBILITY FOR RECEIPT OF SUCH TAX CREDIT; TO PERMIT A 10-YEAR CARRYFORWARD FOR TAX CREDITS THAT EXCEED THE TOTAL STATE INCOME TAX LIABILITY FOR THE YEAR IN WHICH THE DEVELOPED PROPERTY IS PLACED IN SERVICE; TO PROVIDE THAT THE AGGREGATE AMOUNT OF TAX CREDITS AWARDED SHALL NOT EXCEED $1,000,000.00; TO PROVIDE AN ADDITIONAL CREDIT TO OWNERS OF ELIGIBLE PROJECTS AGAINST MISSISSIPPI INCOME TAXES IN AN AMOUNT EQUAL TO $2,500.00 PER YEAR FOR EACH TENANT THAT IS A PUBLIC SCHOOL TEACHER; TO REQUIRE THE BOARD OF TRUSTEES OF THE DEPARTMENT OF REVENUE TO ESTABLISH FEES TO BE CHARGED FOR THE SERVICES PERFORMED IN ADMINISTERING THE PROVISIONS OF THIS ACT; TO ESTABLISH A SPECIAL FUND IN THE STATE TREASURY FOR THE DEPOSIT OF FEES COLLECTED BY THE DEPARTMENT FOR ADMINISTERING THE TAX CREDIT PROGRAM; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) The following terms and phrases shall have the meaning ascribed in the section, unless context clearly indicates otherwise:

(a) "Eligible property" means a school building, other school facility or real property that has been declared as surplus property by a school district under Section 37-7-451 et seq., 37-7-471 et seq., 37-7-485 et seq., or any other applicable sections of the Mississippi Code of 1972. Eligible property shall also mean any former school or education related building or facility currently owned by a political subdivision, municipality, county or agency or redevelopment authority of any political subdivision, municipality or county or any junior or community college.

(b) "Eligible project" means the rehabilitation, restoration, development or redevelopment of eligible property for use as housing, assisted living, retail, manufacturing, distribution, wholesaling or any other business operation that will create at least five (5) new jobs and cause the eligible property to be added to the ad valorem tax roll as taxable property for purposes of local ad valorem taxes.

SECTION 2. (1) Any taxpayer owning, leasing or otherwise having an interest in all or a portion of eligible property and incurring eligible costs in connection with an eligible project shall be entitled to a credit against Mississippi income taxes in an amount equal to twenty-five percent (25%) of the total costs and expenses of the eligible project incurred after January 1, 2014, if the eligible costs exceed twenty-five percent (25%) of the taxpayer's total basis in the property.

(2) (a) (i) If the amount of the tax credit established by this section exceeds the total state income tax liability for the year in which the developed property is placed in service, the amount that exceeds the total Mississippi income tax liability may be carried forward for the ten (10) succeeding tax years.

(ii) If the amount of the tax credit established by this section exceeds One Hundred Fifty Thousand Dollars ($150,000.00), the taxpayer may elect to claim a refund in the amount of seventy-five percent (75%) of the excess credit in lieu of the ten-year carryforward. The election must be made in the year in which the eligible project is placed in service. Refunds will be paid in equal installments over a two-year period and shall be made from current tax collections.

(iii) Refund requests shall be submitted to the Department of Revenue on forms prescribed by the department. Refunds shall be made from current tax collections.

(b) Not-for-profit entities, including, but not limited to, nonprofit corporations organized under Section 79-11-101 et seq., are not eligible for the credit authorized by this section. 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 on a pro rata basis or pursuant to an executed agreement among the partners, members or owners documenting an alternative distribution method. Partners, members or other owners of a pass-through entity and a limited liability company taxed as a partnership are eligible to elect a refund of excess credit in lieu of a carryforward of the credit at the entity level on a form prescribed by the Department of Revenue.

(3) (a) To claim the credit authorized pursuant to this section, the taxpayer shall apply to the department which shall determine the amount of eligible costs. The department shall issue a certificate evidencing the eligible credit if the taxpayer is found to be eligible for the tax credit. The taxpayer shall attach the certificate to all income tax returns on which the credit is claimed.

(b) The aggregate amount of tax credits that may be awarded under this section for eligible costs shall not exceed One million Dollars ($1,000,000.00).

(4) In addition to any other tax credit which may be available, any owner of an eligible project, all or a portion of which consists of housing for public school teachers, shall be entitled to a credit against Mississippi income taxes in an amount equal to Two Thousand Five Hundred Dollars ($2,500.00) per year for each tenant that is a public school teacher as a subsidy for such teacher's rent under the following conditions:

(a) The owner of the eligible project must charge rent at the same rate or rates to all tenants in the eligible project;

(b) The entire credit must be used to subsidize the rent of each public school teacher who is a tenant in the eligible project for whom a credit was claimed;

(c) The tax credit is to be claimed in arrears, based on the number of months in a tax year in which a public school teacher was a tenant in the eligible project;

(d) If a public school teacher for whom a tax credit is claimed was a tenant for less than a full year, or if a person ceases to be a public school teacher during any year, the credit will be prorated accordingly for the months during which the public school teacher was a tenant in the eligible project or during which the person was employed as a public school teacher;

(e) No more than one (1) tax credit may be claimed for any unit in which a public school teacher is a tenant, regardless of whether more than one (1) teacher lives in the unit;

(f) The credit must be claimed annually when the taxpayer files its Mississippi income tax return on a form prepared by the Department of Revenue on which form the taxpayer must certify:

(i) The number of units in which a public school teacher is a tenant;

(ii) The number of months during the year in which each teacher was a tenant in the eligible project;

(iii) That all tenants in the eligible project are charged at the same rent rate; and

(iv) That all tax credits received under this subsection have been or will be used to subsidize the rent of public school teachers who are tenants in the eligible project;

(g) The certification filed by the taxpayer with the Department of Revenue must be accompanied by a certification by the appropriate school district that a teacher for whom a tax credit is claimed is duly employed by that district;

(h) The right to claim the tax credit for public school tenants will expire at the end of the tenth tax year following the date in which the eligible project is placed in service;

(i) If the amount allowable as a credit for public school teacher tenants exceeds the tax imposed on the taxpayer in any year, the amount of such excess is not refundable, but may be carried forward for the ten (10) succeeding tax years.

(5) The board of trustees of the department shall establish fees to be charged for the services performed by the department under this section and shall publish the fee schedule. The fees contained in the schedule shall be in amounts reasonably calculated to recover the costs incurred by the department for the administration of this section. Any taxpayer desiring to participate in the tax credits authorized by this section shall pay the appropriate fee as contained in the fee schedule to the department, which shall be used by the department, without appropriation, to offset the administrative costs of the department associated with its duties under this section.

SECTION 3. There is hereby created within the State Treasury a special fund into which shall be deposited all the fees collected by the department pursuant to the Section 2(6) of this act. Money deposited into the fund shall not lapse at the end of any fiscal year and investment earnings on the proceeds in the special fund shall be deposited to the credit of the fund. Money from the fund shall be disbursed upon warrants issued by the State Fiscal Officer upon requisitions signed by the executive director of the department to assist the department in carrying out its duties under this act.

SECTION 4. This act shall take effect and be in force from and after its passage.