1. (a) As used in this section, "downtown area" means:

   1. (1) the central business district of a city or town; or
   2. (2) any commercial or mixed use area within a neighborhood of a city or town that has traditionally served, since the founding of the community, as the retail service and communal focal point within the community.
2. (b) As used in this section, "initiative" means the small town opportunity initiative established by subsection (f).

3. (c) As used in this section, "nonprofit taxpayer" means a taxpayer:

   1. (1) that is tax exempt under Section 501 of the Internal Revenue Code;
   2. (2) for which some or all of its mission is to revitalize the community it serves; and
   3. (3) whose leadership includes primarily members of the community it serves.

4. (d) As used in this section, "qualified community project" means a project that:

   1. (1) is located in the:

      1. (A) downtown area of a city or a town with a population of less than thirty thousand (30,000);
      2. (B) downtown area of a city or a town that is located in a county with a population of less than seventy-five thousand (75,000); or
      3. (C) unincorporated territory of a county with a population of less than seventy-five thousand (75,000) if the site of the project is an area of the unincorporated territory that serves as the retail service and communal focal point within the unincorporated territory;

   2. (2) involves the:

      1. (A) historic preservation;
      2. (B) redevelopment; or

      3. (C) rehabilitation;

         of real property; and

   3. (3) has a total project budget of at least fifteen million dollars ($15,000,000).

5. (e) As used in this section, "qualified investment" means the amount of the taxpayer's expenditures that are:

   1. (1) for the redevelopment or rehabilitation of real property as part of a qualified community project; and
   2. (2) approved by the corporation before the expenditure is made.
6. (f) The small town opportunity initiative is established.
7. (g) The corporation shall administer the initiative.

8. (h) The purpose of the initiative is to undertake qualified community projects within local government units to do the following:

   1. (1) Advance historic preservation.
   2. (2) Redevelop or rehabilitate distressed buildings or underutilized property.
   3. (3) Redevelop or rehabilitate sites where distressed buildings once stood.
9. (i) A for-profit taxpayer undertaking a qualified community project under the initiative is entitled to a redevelopment tax credit under this chapter equal to twenty percent (20%) of the taxpayer's cost of the project.
10. (j) A nonprofit taxpayer undertaking a qualified community project under the initiative is entitled to a redevelopment tax credit under this chapter equal to thirty percent (30%) of the taxpayer's cost of the project.
11. (k) Qualified community projects undertaken under this section are not subject to any statutory or administrative repayment obligation.

12. (l) Notwithstanding any other provision of this section, for a nonprofit taxpayer undertaking a qualified community project under this section, expenditures incurred to acquire, hold, or prepare real property for redevelopment or rehabilitation before the date the taxpayer's initial application or application for certification is approved by the corporation shall be included in the taxpayer's qualified investment if:

    1. (1) the expenditures were incurred for the primary purpose of future redevelopment consistent with subsection (h);
    2. (2) the nonprofit taxpayer obtained site control in furtherance of a locally supported redevelopment effort; and
    3. (3) the corporation determines, as part of the application or certification process, that inclusion of such expenditures is in the public interest and supportive of early stage community redevelopment efforts.
13. (m) For purposes of determining whether an expenditure is included as part of a qualified investment under subsection (l), an expenditure shall be treated as if it were approved by the corporation as of the date the expenditure was originally incurred.

As added by P.L.162-2026, SEC.15.