SB 176 - This act adds the definitions of "central business district", "high unemployment", "low fiscal capacity", "moderate income", "new job", and "retail project" to Missouri's tax increment finance statutes and modifies the definition of economic activity taxes (EATS) to exclude from the definition any voter approved sales taxes imposed for specific purposes or projects.
The act prohibits the adoption, by municipal ordinance, of a redevelopment plan without findings documented by substantial and competent evidence on the record satisfying a reasonable person standard. Such finding must include an affidavit signed by the developer including a study stating that records were reviewed, inspections and comparisons were made, or tasks undertaken demonstrating that the property has not been developed through private enterprise over a period of time. The study must be signed by a responsible party and be of sufficient specificity to allow the tax increment finance commission or the municipality, or both, to conduct any necessary investigation.
An economic feasibility analysis and a pro forma financial statement indicating the return on investment that may be expected without public assistance will be required for all redevelopment projects involving "Super TIF" funds, or local TIF projects with more than two hundred fifty thousand dollars in tax increment financing. The financial statement must include any assumptions made, and analysis demonstrating the amount of assistance necessary to bring the return on investment into a range deemed attractive to private investors. The amount of such assistance will be equal to the estimated reimbursable project costs.
All documents relating to the study and other current requirements must be published 30 days prior to the adoption of the TIF plan. A resident may enjoin such adoption by initiating an action in circuit court or 5% of registered voters may petition to have the plan delayed until the voters of the municipality can vote on the issue.
This act extends the applicability of the increment pass through of fifty percent of new state revenues derived from a "Super TIF" exclusively to projects in blighted areas located in distressed communities.
After July 1, 2008, a redevelopment project, located entirely or partially within metropolitan statistical areas of the state, will qualify if: the host municipality or school district has low fiscal capacity; the census block group containing the proposed redevelopment area has high unemployment; the municipality and census block group containing the redevelopment area are characterized by moderate income. Tax increment financing may only be used if the municipality has made a finding that the area is blighted or a conservation area and it is located in the central business district; it includes only those parcels of real property directly and substantially benefitted by the proposed redevelopment plan; it can be renovated through one or more redevelopment plans; the establishments in the area have generally suffered from stagnant or declining taxable sales or corporate receipts during the previous three years; it is contiguous, although it may contain up to three noncontiguous areas provided each area meets all applicable requirements; and the area does not exceed ten percent of the entire area of the municipality.
Tax increment financing in specific areas will be limited to the greater of five percent of the total estimated redevelopment costs or thirty percent of the infrastructure costs for projects that are primarily retail. Use of tax increment financing is prohibited to develop sites in which twenty-five percent or more of the area is vacant and has not previously been developed, or qualifies as open space, or is being used for agricultural or horticultural purposes. These prohibitions are subject to limited exceptions.
The act provides for twenty-five percent of the property tax increment to be passed on to taxing entities entitled to receive revenue from property tax revenues throughout the entire repayment period of the project. Where a project includes residential uses, absent a recommendation to the contrary from commission members representing the affected school boards, the real property tax increment attributable to the residential portion of the project will pass through to the affected school districts. Taxing entities providing emergency services will be reimbursed for direct costs. Such reimbursement may not be less than twenty-five percent nor more than one hundred percent of the district's increment.
The act adds reporting requirements for municipalities and developers engaged in tax increment financing projects. The Department of Economic Development will be required to submit a report to the Governor and the General Assembly identifying the number of redevelopment areas, the amount of public investment in each, the benefit derived from each project, and the economic impact of the project on each taxing district.
This act is similar to Senate Bill 672 (2006).