PURPOSE: This rule explains the application process for tax credits under the Historic Preservation Tax Credit Program.

1. (1) Preliminary Application.

   1. (A) All applicants seeking an authorization of tax credits for a project shall submit a preliminary application to the department.
   2. (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.

   3. (C) A complete preliminary application shall be evaluated by the department for eligibility of the project.

      1. 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.

1. (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.

2. (E) The preliminary application shall include the following:

   1. 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);

1. 2. The type and amount of local incentives or public

financing committed to the project;

1. 3. Private financing and developer equity;
2. 4. The estimated number of net new jobs created in the

state as a result of the project;

1. 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;

1. 6. Information regarding the vacancy or underutilization

prior to rehabilitation; and

1. 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.

1. (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.
2. (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.
3. (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.

4. (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. 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;

1. 2. The project will be occupied by the applicant or an

entity with a direct or indirect controlling interest in applicant upon completion; and

1. 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. 1. The scoring criteria and scorecard shall set forth the

maximum points assigned to the required criteria in section 253.559.3, RSMo.

1. 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.

1. (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.
2. (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.
3. (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.

1. (2) Final Application.

   1. (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.
   2. (B) The department shall post on its website a checklist of required information for a final application.
   3. (C) The department shall accept final applications yearround.
   4. (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.
   5. (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.
   6. (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.

   7. (G) The following applies in determining whether a cost is a QRE:

      1. 1. An applicant’s hard costs set forth in a preliminary

application will be QREs only if such costs are—

1. 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—

1. (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

1. (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;

1. 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;

1. 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.

1. A. Project costs shall not be QREs if paid by the third par-

ty on behalf of the applicant, regardless of whether applicant reimburses the third party.

1. B. A title company paying on behalf of an applicant shall

not be considered a third party for purposes of this paragraph;

1. 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

1. 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.

1. (3) Excess Tax Credits Application.

   1. (A) All applicants seeking excess tax credits shall submit an excess tax credits application to the department.
   2. (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.

   3. (C) A complete excess tax credits application shall be evaluated by the department for eligibility of the project.

      1. 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.

1. (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.
2. (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.
3. (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 reevaluated 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.
4. (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.
5. (H) Excess tax credits applications will be reviewed and scored in the order set forth in subsection (1)(H) of this rule.
6. (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.
7. (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.
8. (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.

AUTHORITY: section 135.487, RSMo 2016, and sections 135.802 and 620.010, RSMo Supp. 2023.* Original rule filed July 8, 2008, effective Feb. 28, 2009. Amended: Filed July 31, 2014, effective Jan. 30, 2015. Emergency amendment filed March 20, 2019, effective March 30, 2019, expired Dec. 31, 2019. Amended: Filed March 20, 2019, effective Nov. 30, 2019. Amended: Filed July 31, 2023, effective March 30, 2024. *Original authority: 135.487, RSMo 1999; 135.802, RSMo 2004, amended 2009, 2022; and 620.010, RSMo 1973, amended 1981, 1983, 1986, 1989, 1990, 1993, 1994, 1995, 1999, 2001, 2007, 2008, 2010, 2014, 2019.