HB 930 -- DUTY FREE ZONES ACT

SPONSOR:  Hughes

COMMITTEE ACTION:  Voted "do pass" by the Committee on Urban
Issues by a vote of 7 to 0.

This bill establishes the Duty Free Zones Act which authorizes
the creation of tax-free or reduced-tax zones.

The governing body of any city may designate a portion of the
city as a duty-free zone and grant the district tax-favored
status for up to 23 years by adopting an ordinance.  The
ordinance must contain:

(1)  A statement that the proposed duty-free zone is a blighted
area located within a qualified census tract;

(2)  The reduced tax rate or tax-favored status granted to the
zone;

(3)  The term and conditions of the tax-favored status;

(4)  The general boundaries of the proposed duty-free zone by
street location; and

(5)  The name of the duty-free zone.

Prior to the adoption of the ordinance, the city must hold a
public hearing.  The bill specifies the requirements for the
hearing including the public's notification.

The city cannot provide a duty-free zone with tax-favored status
unless the ordinance adopted by the city's governing body is
approved by the Missouri Development Finance Board within the
Department of Economic Development.  Upon adoption of the
ordinance, the city must submit an application to the department
for review.  The department will submit an analysis and
recommendation to the board, which will determine whether or not
the zone's designation should be approved.  The bill specifies
the requirements of the application, which must include an
affidavit attesting to the fact that the proposed zone is a
blighted area.  The department must make all reasonable efforts
to process applications within 60 days of receipt.

Upon approval of tax-favored status for a duty-free zone, a
certificate of approval will be issued by the department
containing the reduced tax rate or tax-favored status and the
term.  Any business located within the duty-free zone may receive
tax-favored status for up to 15 years.

No city may have more than one duty-free zone at any given time.
Any tax funds collected in a duty-free zone must be deposited
into the newly created Blighted Area Restoration Fund and used to
restore any blighted area within the duty-free zone.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 or
Unknown in FY 2010, FY 2011, and FY 2012.  No impact on Other
State Funds in FY 2010, FY 2011, and FY 2012.

PROPONENTS:  Supporters say that the bill provides community
empowerment during hard economic times for redevelopment
projects.  The bill allows communities to keep the sales tax that
is usually paid to the state and to use the funds for rebuilding
the infrastructure of their city.  A board will be responsible
for the governance of the funds.  There is a minimal fiscal
impact because the eligible zones are already low economic
drivers for sales tax revenue.

Testifying for the bill were Representative Hughes; Greater
Kansas City Chamber of Commerce; and City of Kansas City.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am