SB 1040 Modifies provisions relating to eminent domain, tax increment financing, and urban redevelopment
Sponsor: Barnitz
LR Number: 3205S.02I Fiscal Note:
Committee: Economic Development, Tourism & Local Government
Last Action: 2/21/2006 - Second Read and Referred S Economic Development, Tourism & Local Government Committee Journal Page: S278
Title: Calendar Position:
Effective Date: August 28, 2006

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Current Bill Summary


SB 1040 - SECTION 67.1401 - COMMUNITY IMPROVEMENT DISTRICT ACT - This section states that the fact that a different use of a specific piece of property or properties would provide a higher level of tax revenue or economic liability or that the land is economically underutilized shall not be a valid factor in determining blight. Property which has a primary use as agricultural land as defined under section 442.566, RSMo, or is subject to a wildlife restoration or conservation program shall not be subject to a finding of blight.

SECTION 99.320 - MUNICIPAL HOUSING - This section states that the fact that a different use of a specific piece of property or properties would provide a higher level of tax revenue or economic liability or that the land is economically underutilized shall not be a valid factor in determining blight or that the area is an insanitary area. Property which has a primary use as agricultural land as defined under section 442.566, RSMo, or is subject to a wildlife restoration or conservation program shall not be subject to a finding of blight or that the area is an insanitary area.

SECTION 99.805 - TAX INCREMENT FINANCING - This section states that the fact that a different use of a specific piece of property or properties would provide a higher level of tax revenue or economic liability or that the land is economically underutilized shall not be a valid factor in determining blight or that the area is a conservation or economic development area. Property which has a primary use as agricultural land as defined under section 442.566, RSMo, or is subject to a wildlife restoration or conservation program shall not be subject to a finding of blight or that the area is a conservation or economic development area.

SECTION 100.310 - PLANNED INDUSTRIAL EXPANSION - This section states that the fact that a different use of a specific piece of property or properties would provide a higher level of tax revenue or economic liability or that the land is economically underutilized shall not be a valid factor in determining blight or that the area is an insanitary or undeveloped industrial area. Property which has a primary use as agricultural land as defined under section 442.566, RSMo, or is subject to a wildlife restoration or conservation program shall not be subject to a finding of blight or that the area is an insanitary or undeveloped industrial area.

SECTION 353.020 - URBAN REDEVELOPMENT CORPORATIONS - This section states that the fact that a different use of a specific piece of property or properties would provide a higher level of tax revenue or economic liability or that the land is economically underutilized shall not be a valid factor in determining blight. Property which has a primary use as agricultural land as defined under section 442.566, RSMo, or is subject to a wildlife restoration or conservation program shall not be subject to a finding of blight.

SECTION 523.095 - This section prohibits the state or any political subdivision thereof from exercising the power of eminent domain to acquire property for economic development unless 10 years have passed since the time of the original authorized taking and the government offers the original owner, or his or her heirs or assigns, the right of first refusal to buy the property at the original condemnation price before proceeding with the development.

The definition of "economic development" means any activity performed to increase tax revenue, tax base, employment rates, or general economic health, when the activity does not result in:

(1) the transfer of land to public ownership;

(2) the transfer of land to a private entity that is a common carrier;

(3) the transfer of property to a public utility, rural electric cooperative, or municipally-owned utility;

(4) the transfer of land to a private entity that will remove a blighted area; or

(5) the lease of the property to private entities that occupy an incidental area within a public project.

SECTION 523.110 - This section states that when an entity with the power to condemn negotiates with an owner to acquire property, which may eventually be acquired through formal condemnation proceedings, the entity must provide the owner with a summary of his or her rights through certified mail. Without such notification, a presumption exists that any transaction entered into between the parties was not voluntary and the condemning entity may be held responsible for any relief determined by the court.

SECTION 523.115 - This section requires a condemning entity to give notice of the intent to acquire property before beginning the process of condemnation. Such general notice must include a description of the property, notice of the property owners' rights to a hearing, notice that a decision may be appealed to be heard before a jury, and notice that the condemning entity will pay reasonable appraisal costs.

Property owners may employ an appraiser of their choosing, who must be a Missouri certified general appraiser. In addition to following the uniform standards of professional appraisal practice, the appraiser must also consider various factors such as: 1) comparable sales of property in the area, 2) appraised value of like property in the area, 3)term of ownership of property by current owner, 4) current use of property in comparison to future use of property, 5) availability of like property in the area, and 6) anticipated financial gain from proposed future use. The value of the land shall be equal to the fair market value with upward adjustments for the various factors considered.

Within 90 days of notice, the owners may submit an appraisal to the condemning entity, and in return the condemning entity must submit its own appraisal, which must meet the same standards as that of the property owner's appraisal. All the appraisals may be used to negotiate, but only the condemning entity is bound by such appraisals. The condemning entity must pay for the costs of the owner's appraisal, unless several owners exist and they cannot agree on what appraisal to submit.

Under this section, a condemning entity shall not make an offer to purchase property that is less than the fair market value established by its appraisal, but is not required to make a higher offer in order to be negotiating in "good faith", unless a reasonable person would find that the condemning entity wholly disregarded the factors justifying an increase in appraised value (listed above). Any condemning party must make a written offer at least 10 days before the formal filing of a petition with the court to condemn the property. The offer must be filed with the Recorder of Deeds. This section provides the form in which such offer must be made.

If the parties fail to reach agreement and the action proceeds to before the commissioners, court, or a jury and the amount of damages awarded the property owner is 20% greater than the amount specified in the offer, the court shall order the condemning entity to pay the property owner?s litigation costs, including court costs and attorneys' fees. If the amount of damages awarded to the property owner is 50% greater than the offer, the condemning entity will pay the litigation costs and double damages on that portion of damages awarded that exceeds 20% more than such offer.

JASON ZAMKUS