SB 20 Modifies the laws relating to tax increment financing
Sponsor: Griesheimer
LR Number: 0268S.05C Fiscal Note: 0268-05
Committee: Economic Development, Tourism & Local Government
Last Action: 5/18/2007 - S Informal Calendar S Bills for Perfection Journal Page:
Title: SCS SB 20 Calendar Position:
Effective Date: August 28, 2007

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Current Bill Summary


SCS/SB 20 - This act requires a blight study to be conducted as part of the redevelopment plan. Within forty-five days after the adoption of an ordinance approving a redevelopment plan, an affected landowner may petition a court of competent jurisdiction for an expedited de novo review of a governing body's blight determination.

This act prohibits the use of tax increment financing for projects located in one hundred year flood plains except for river front development projects and projects located within the incorporated limits of a municipality. The act defines the term "Greenfield area" and prohibits use of tax increment financing for certain greenfield area development. TIF projects resulting in the development of solely residential development are prohibited for the development of previously undeveloped or vacant land. Revenue increases realized from the residential portion of the development shall not be deposited in the special allocation fund, but shall be allocated to the various taxing entities as though that area had not been subject to a TIF, unless the ordinance approving the redevelopment plan is passed by a two-thirds majority vote by the governing body of the municipality.

The act prohibits certain members of the Tax Increment Finance Commission from being employees of the municipality. In the event that the named developer on a project is a jurisdiction responsible for appointing Tax Increment Finance Commission members, then those members shall be excluded from voting on any such proposed tax increment finance project or amendment. If a Tax Increment Finance Commission rejects a proposed tax increment finance project, a governing body wanting to pursue such project must either: 1) place the project before the registered voters of the municipality for approval, or 2) approve the project by a super majority vote of the governing body and allocate one hundred percent of the economic activity taxes imposed by the municipality to the special allocation fund. The allocation of one hundred percent of the economic activity taxes shall be utilized to pay redevelopment costs, defease the obligations secured by the special allocation fund, and shorten the term of repayment.

The act allows for referendum petitions in opposition to tax increment financing projects for municipalities that do not currently have the authority for such a process if the Tax Increment Finance Commission has previously made a recommendation opposing such tax increment finance project or a portion thereof. Such a petition must be signed by a number of voters equal to at least fifteen percent of the registered voters of the municipality for municipalities with populations greater than five thousand residents. Petitions must be signed by a number of voters equal to at least twenty percent of the registered voters of the municipalities for municipalities with populations of less than five thousand residents. The petitions must be submitted no later than 30 days after the date of the adoption of the ordinance approving the redevelopment project or plan.

In order for a municipality to receive "Super TIF" funds, the municipality must allocate one hundred percent of economic activity taxes to the special allocation fund.

The act prohibits voter approved tax increases or levies, which are approved subsequent to the adoption of an ordinance approving a redevelopment plan and are not the renewal or extension of a tax first approved prior to the adoption of the ordinance approving the redevelopment project, from being captured as economic activity taxes by such project unless the tax is levied for the specific purpose of funding or retiring the debt of the redevelopment project or plan. However, existing taxes that are set to expire and are reauthorized or extended are still considered economic activity taxes subject to allocation to the special allocation fund. Municipalities are prohibited from conferring eminent domain power to private entities when a project utilizes both tax increment financing and chapter 353 urban redevelopment incentives.

The act creates penalties for the failure of a municipality to report to the Department of Economic Development with regard to tax increment finance projects. A municipality will be subject to a fine of ten dollars a day for every day of noncompliance. Such fines will be placed into the Missouri Supplemental Tax Increment Finance Fund.

This act is similar to SS/SCS/SB 832 (2006).

JASON ZAMKUS