Pennartz again pushes for downtown development incentive
by January 14, 2011 3:53 pm 71 views
Rep. Tracy Pennartz, D-Fort Smith, is again pushing legislation that would provide tax incentives for new development and renovation in downtown improvement districts around the state.
HB 1118 was filed Thursday (Jan. 12) and is almost a mirror of the bill (HB 1060) Pennartz pushed in the 2009 Arkansas General Assembly. HB 1060 passed a house vote with 94 members voting in favor of the bill. The heads and members of more than 60 chamber, city and trade associations were on record supporting HB 1060. But the bill died in the Senate Revenue & Tax Commission in the last days of the 2009 session.
If HB 1118 is approved, it would establish an investment tax credit for renovation and development in Fort Smith’s Central Business Improvement District. The district, which includes downtown Fort Smith and portions of Towson Avenue up to Sparks Regional Medical Center, is governed by an autonomous board that has the power to issues bonds, tax and the power of eminent domain. Pennartz’s bill is written to cover similar business districts in Arkansas.
The investment tax credit would be equal to 20% of up to the first $1 million of qualified rehabilitation or development expenditures incurred for a qualified project. The 2009 bill provided a credit for up to $2 million of qualified work.
Gov. Mike Beebe opposed the 2009 legislation because of the potential to lower tax revenue by up to $20 million annually. Beebe has said prior to the 2011 session that he will again oppose legislation that reduces taxes without also identifying spending cuts or other revenue sources.
Tax credits would be eligible for new construction and renovation of existing structures that exceed $50,000. The project would also have to meet development criteria established by the governing business improvement district. The incentive program would expire Dec. 31, 2017, if the legislation is approved.
The bill filed in 2009 placed an annual cap of $20 million on investment tax credits awarded by the state, with $10 million reserved for eligible business districts in a city of less than 50,000 population, and $10 million for eligible districts in cities with populations above 50,000. HB 1118 does not include that provision.
House co-sponsors are Reps. Denny Altes, R-Fort Smith, Stephanie Malone, R-Fort Smith, and James McLean, D-Batesville. Sen. Jake Files, R-Fort Smith, is the only Senate sponsor listed.