HB 1592 -- SALES AND PROPERTY TAXES AND REVENUE BONDS (Jones, 89)

COMMITTEE OF ORIGIN:  Committee on Economic Development

This bill changes the laws regarding county collectors and a
county's special road and bridge levy and establishes the STAR
Bonds Financing Act.

The bill allows the county collector in all counties to collect a
fee for the collection of a special assessment for delinquent
property taxes and to foreclose on a lien on real property for
unpaid property taxes by a judicial foreclosure proceeding.

The bill authorizes the county commission in certain counties
that have approved a countywide sales tax under Section 67.547,
RSMo, to enter into agreements with cities, towns, villages, and
special road districts organized under Chapter 233 for the
purpose of working cooperatively on the roads and bridges located
in the county, including the distribution of county funds to the
entities.  County funds that may be distributed include general
revenue and revenue from the special road and bridge levy.

Each city, town, village, or special road district must continue
to receive its share of the county's special road and bridge
levy, if any, that is annually considered by the commission.  If
the special road and bridge levy is not set at a level of at
least 14 cents on each $100 assessed valuation, the commission
must distribute additional funds from any available county source
in an amount that will, when combined with the special road and
bridge levy revenues, allow it to distribute funds equal to the
funding level of at least 14 cents on each $100 assessed
valuation.  Additionally, if at least 50% of a special road
district is located in a city, town, or village, that entity must
be entitled to receive the special road district's portion of any
funds not paid through the special road and bridge levy.
Currently, these provisions only apply to Cass, Clay, and Platte
counties.

The bill establishes the STAR Bonds Financing Act which allows
the governing body of a city or county to issue a bond that is to
be repaid by the revenues received by the city or county from any
transient guest tax and state and local sales and use taxes that
are collected from taxpayers doing business within that portion
of the city or county redevelopment district to retire a special
obligation bond.  A STAR bond is a sales tax revenue bond with a
20-year repayment period.  Bonds issued under these provisions
are not general obligations of the city or county nor do they
give rise to a charge against the entity's general credit or
taxing power and the bonds must state this on their face.

STAR bond financing can be used for a project with at least a $50
million capital investment and $50 million in projected gross
annual sales revenues.  A project located outside of a
metropolitan statistical area that has been found by the Director
of the Department of Economic Development to be in an eligible
area under the provisions regarding tax increment financing and
is of regional or statewide importance or a major tourism area
and the department director has found that capital improvements
totaling not less than $100 million will be built in the state.
No project can include a project for a gambling casino.

The governing body of a city or county is allowed to establish
one or more STAR bond projects in any area in the city or outside
of a city's boundaries with the passage of a resolution by the
county commission of its approval.  However, each special bond
project must be approved by the department director, based on the
required feasibility study, prior to utilizing STAR bonds.

The entity must prepare a project plan, hold a hearing on the
plan, and adopt the project plan.  A marketing study must be
conducted to examine the impact of the special bond project on
similar businesses in the projected market area and the
department director must not approve any project if the project
would have a substantial negative impact on business in the
project market area or cause a default on any outstanding special
obligation bonds.  An entity may acquire property by eminent
domain with a two-thirds vote of the governing body but must
compensate the property owner consistent with state law and
provide for the payment of relocation assistance.

The feasibility study must include:

(1)  Whether a project's revenue and tax increment revenue and
other available revenues are expected to exceed or be sufficient
to pay for the project costs;

(2)  The effect, if any, the project will have on any outstanding
special obligation bonds payable from the revenues used to fund
the project;

(3)  A statement of how the jobs and taxes obtained from the
project will contribute significantly to the economic development
of the state and region;

(4)  Visitation expectations;

(5)  The unique quality of the project;

(6)  An economic impact study;

(7)  Integration and collaboration with other resources or
businesses;

(8)  The quality of service and experience provided, as measured
against national consumer standards for the specific target
market;

(9)  Project accountability, measured according to best industry
practices;

(10)  The expected return on state and local investment that the
project is anticipated to produce;

(11)  A statement concerning whether a portion of the local sales
and use taxes are pledged to other uses and are unavailable as
revenue for the project and if the revenues are so committed, a
detailed explanation of the commitment and the effect; and

(12)  An anticipated principal and interest payment schedule on
the bond issue.

The department director is required to set a limit on the total
amount of STAR bonds that may be issued for any project.  The
entity is also required to have an annual certified public
accountant audit of each project.

The developer of a special bond project is required to commence
work on the project within two years from the date of the
adoption of the project plan.  If the developer does not commence
work on the project within the two-year period, funding for the
project ceases and the developer has one year to appeal to the
department director for re-approval of the project.  If the
project is re-approved, the two-year period for commencement
applies.  Missouri residents must be given priority consideration
for employment in construction projects located in a special bond
project area.  Proceeds from STAR bonds may be used for:

(1)  Property acquisition;

(2)  Relocation assistance for property owners moving out of the
project district;

(3)  Site preparation including utility relocations;

(4)  Drainage conduits, channels, levees, and river walk canal
facilities;

(5)  Parking facilities, including multilevel parking structures
devoted to parking only;

(6)  Street improvements;

(7)  Street light fixtures, connection, and facilities;

(8)  Utilities located within the public right-of-way;

(9)  Landscaping, fountains, and decorations;

(10)  Sidewalks and pedestrian underpasses or overpasses;

(11)  Drives and driveway approaches located within the public
right-of-way;

(12)  Multi-sport athletic complex; and

(13)  Museum facility.

Proceeds from STAR bonds may not be used to pay the costs
incurred in connection with the construction of buildings or
other structures.  Proceeds are not available for fees and
commissions paid to real estate agents, financial advisors, or
any other consultants who represent the developer or any other
businesses considering locating in or located in a redevelopment
district; salaries for local government employees; moving
expenses for employees of the businesses locating within the
redevelopment district; property taxes for businesses that locate
in the redevelopment district; lobbying costs; any bond
origination fee charged by the city or county; any personal
property subject to taxation under state law; or travel,
entertainment, and hospitality.

Each entity that has a project financed with STAR bonds must
prepare and submit an annual report by October 1 to the
department director and the department must compile this
information and submit an annual report to the Governor and the
legislature by February 1.  A project using state sales tax
funding must be independently audited annually to determine if
bond funds are being used for authorized purposes and the audit
must be reported to the Governor, department director, and
specified legislative committees during the legislative session
following the audit.

The provisions of the act expire June 30, 2017.

FISCAL NOTE:  Estimated Net Cost on General Revenue Fund of
$60,447 in FY 2013, $65,917 in FY 2014, and $66,634 in FY 2015.
No impact on Other State Funds in FY 2013, FY 2014, and FY 2015.

Missouri House of Representatives
Last Updated April 25, 2012 at 2:55 pm