On April 30, the 2012 Mississippi legislature approved legislation the Health Care Industry Zone Act, designed both to expand the health care industry and to create new jobs in most Mississippi counties. The Act offers incentives to various types of health care businesses to invest in Mississippi by supporting existing acute care hospitals and by facilitating an environment for health care industry growth.
Designated Health Care Zones will include those areas certified by the Mississippi Development Authority (MDA) that are located within either three contiguous counties having more than 375 certified acute care hospital beds and/or in a county having a hospital with a minimum capital investment of $250,000,000 that will be constructed before July 1, 2017. A health care industry facility seeking to benefit from the Act’s incentives must be located within a five-mile radius of an acute care hospital and must be on real property zoned for the facility’s operation.
A “health care industry facility” means a business engaged in the research and development of pharmaceuticals, biologics, biotechnology, diagnostic imaging, medical supplies, medical equipment or medicine and related manufacturing or processing, medical service providers, medical product distribution, or laboratory testing. The “health care industry facility” must create a minimum of 25 new full-time jobs and/or have $10,000,000 of capital investment after July 1, 2012.
Businesses and health care industry facilities seeking Act incentives must apply to the MDA for certification as a qualified business. Certification must be obtained prior to beginning construction on the facility or hiring employees for the facility. Any qualified business that constructs or renovates a health care facility in its designated Health Care Zone will qualify for:
- accelerated state income tax depreciation deduction;
- sales tax exemption for equipment and materials purchased from the date of the project’s certification until three months after the facility is completed; and
- property tax “Fee in Lieu” if certain minimum investment is made or, at the county’s discretion, ad valorem tax exemption for 10 years.
Qualified businesses may also take advantage of additional incentives, including Advantage Jobs Credit, Jobs Tax Credit, and Infrastructure Assistance.
If a qualified business does not create the required number of new jobs at the end of five years, the MDA may revoke the business’s health care industry zone certification. Revocation of the certification will not, however, retroactively remove any of the Act’s incentives.
In order to take advantage of these incentives, there are agreements, applications, and the like, that need to be put in place with local municipalities and building contractors. Attorneys at Bradley Arant Boult Cummings LLP can assist with such requirements to help a prospective health care facility take full advantage of these incentives.