Downtown development bill passes House
by March 9, 2011 8:09 pm 73 views
After receiving a 93-0 vote of approval in the Arkansas House of Representatives, a bill to provide tax incentives for new development and renovation in downtown improvement districts now heads to the Senate.
Rep. Tracy Pennartz, D-Fort Smith, filed HB 1118 on Jan. 12, with the bill almost a mirror of the bill (HB 1060) she unsuccessfully 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. 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.
“Cities that don’t have a vibrant downtown are less successful in bringing industry and jobs to their area,” Pennartz said Wednesday (Mar. 9) after the House voted to endorse the measure.
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.
“I have a great deal of confidence that the members of the Senate committee will see the worthiness of this bill,” Pennartz said when asked about her plans to avoid a repeat of 2009.
Sen. Jake Files, R-Fort Smith, a member of the Senate Revenue & Tax Committee, will carry the bill in the Senate, Pennartz said.
The investment tax credit would be equal to 25% of up to the first $500,000 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.
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.