SB 0172 Revises regulation of tax increment financing
LR Number:0550L.01I Fiscal Note:0550-01
Committee:Ways and Means
Last Action:02/25/03 - Hearing Conducted S Ways and Means Committee Journal page:
Effective Date:July 1, 2004
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Current Bill Summary

SB 172 - This act creates and defines the following new terms in the Real Property Tax Increment Allocation Redevelopment Act: "high unemployment", "low-fiscal capacity", "moderate income", and "new job".

The act requires that a study be a part of the basis for finding that a redevelopment area on the whole is a blighted area, a conservation area, or an economic development area, and that such area has not be subject to growth and development through private investment. This study must state that records were reviewed, inspections were made, comparisons were made, or tasks undertaken demonstrating that the property has not been developed through private enterprise over a period of time. The act also requires an economic feasibility analysis indicating the return on investment of the proposed development.

The act limits a portion of existing law concerning sharing of payments in lieu of taxes among affected political subdivisions to apply only to blighted areas.

The act changes criteria used to evaluate primarily retail redevelopment projects funded by tax increment financing in the City of St. Louis and in St. Louis, Jefferson, Warren, St. Charles, Franklin, Lincoln, St. Francois and Ste. Genevieve counties. Any redevelopment project consisting solely of public infrastructure improvements on public land, requiring less than two million dollars in TIF, and where the TIF bonds will be paid-off in less then seven years are exempt from these new criteria. Also exempt are redevelopment projects for which eligible project redevelopment costs are to be paid from that portion of the total economic activity taxes and payments in lieu of taxes imposed by the municipality only, and real or potential revenues from no other taxing jurisdictions are involved.

The act requires approved project areas or census blocks within these counties and the city of St. Louis to have high unemployment, low fiscal capacity, and moderate income. The act also limits the maximum amount of public funding for approved TIF projects to 30% of the total project costs, unless the redevelopment is occurring in certain further impoverished areas.

The act does not allow TIF to be used to develop sites where 25% or more of the area is vacant and has not been previously developed, qualifies as "open space" as defined in Section 67.900, RSMo, or is presently being used for agricultural or horticultural purposes, except in certain cases. If a redevelopment project is located with a majority of the project in a qualifying area and a contiguous area of lesser size meets the same criteria as the original are, then the contiguous area shall be added to the qualifying area.

Where a municipality received payments in lieu of taxes, it may be required to pay 25% of such payments to other taxing entities otherwise entitled to receive revenue from levies on real property in such municipality. Those taxing entities will divide this revenue proportionately to the collections of revenue from real property in the development area to which each such taxing entity is entitled during that tax year.

An annual submission of information regarding the approval plan shall be made to the DED, who shall submit a report to the Governor and the general assembly by the last day of April each year.

Certain counties providing emergency services pursuant to Chapter 190 shall be entitled to reimbursement from the special allocation fund for direct costs of not less than 25% but not more than 100% of that districts tax increment.

The act has an effective date of July 1, 2004.