HCS SB 924 -- SALES TAX FOR ECONOMIC DEVELOPMENT

SPONSOR: Maxwell

COMMITTEE ACTION: Voted "do pass" by the Committee on Local Government and Related Matters by a vote of 15 to 4.

This substitute allows the governing body of Kirksville, subject to voter approval, to impose a sales tax on retail sales for the purpose of funding local economic development projects, including transportation projects. The sales tax may be approved at the rate of one-quarter of 1%, one-half of 1%, three-quarters of 1%, or 1% of the receipts from taxable retail sales within the city. Revenue collected from the sales tax, less 1% for the costs of collection, is to be deposited by the Director of Revenue into the Local Economic Development Sales Tax Fund. The tax will terminate as approved by the voters.

The substitute allows Community Improvement Districts, upon voter approval, to impose a sales tax for economic development purposes. The definition of qualified voters in a Community Improvement District is clarified. Language is repealed prohibiting municipalities from setting a minimum wage higher than that set by the state.

The substitute broadens the services provided by homeless assistance programs to include the repair or replacement of housing structures which violate county housing codes. The substitute also authorizes an additional $3 user fee for filings with the recorder of deeds in St. Louis County, if approved by the voters, to be used to renovate or rehabilitate housing through homeless assistance programs for the purpose of sale at market rates.

The substitute establishes the Community Comeback Act. In its main provisions, the substitute:

(1) Authorizes the establishment of a community comeback trust for St. Louis County, whose primary duties include the prevention of neighborhood decline, demolition of abandoned buildings, cleaning of polluted sites, and the promotion of neighborhood reinvestment;

(2) Provides that the county executive is to appoint the 7-member community trust board from a list of nominees supplied by any member of the St. Louis County Council and the chief elected officer of any municipality wholly within St. Louis County. The criteria for and terms of board membership are outlined;

(3) Gives exclusive control of the expenditure of moneys collected to the credit of the trust, subject to annual appropriation by the county council, to the trust board and limits the administrative costs of the trust to no more than 5% of the trust's annual budget;

(4) Requires the county government to provide trust staff;

(5) Authorizes the trust to issue and refund bonds, notes, or other obligations for any proposal and to receive and liquidate property; the trust is not, however, authorized to use the power of eminent domain. Bonds issued by the trust are exempt from state income taxes;

(6) Requires the trust board to notify all municipalities within St. Louis County and the county council of the requirement to conduct a planning process and adopt a community comeback plan;

(7) Requires the board to hold public hearings and to solicit input from the county and municipalities regarding the development of the community comeback plan. The board and the county council are to annually revise and adopt a plan;

(8) Requires each plan to include a housing stock and market analysis of the impediments to attracting home buyers. In addition, each plan is to address the factors related to the occurrence of assessed values below the county average, median household incomes below the county median, unemployment rates above the county average, building vacancies, and lack of home value growth;

(9) Requires each plan to outline the specific strategies to address the problems encountered in various regions and neighborhoods in the county;

(10) Requires the board to produce an annual report outlining what has been accomplished in relation to the goals set forth in the community comeback plan;

(11) Requires the board to commission an annual financial audit and an independent management audit every 5 years;

(12) Requires the board to establish an 11-member advisory committee, with members appointed by the county executive. The qualifications and length of terms of committee members are outlined. The advisory committee is charged with advising the board, board staff, or petitioners who include the governing body of any municipality or St. Louis County, any land clearance for redevelopment authority in St. Louis County, or any not-for- profit organization;

(13) Authorizes the board to begin accepting petitions for funding from the trust one month after the community comeback plan is adopted. The criteria which must be addressed in a petition are outlined and include addressing how the reinvestment needs of a neighborhood will be met by reducing or removing impediments to home buyers; providing physical infrastructure to promote job growth; or reducing or removing threats to public health, safety, morals, or welfare;

(14) Authorizes the board to award funding to a petitioner if the petitioner's proposal involves an eligible project with eligible expenses and is well planned, realistic, creative, resourceful, cost-effective, and benefits the local community;

(15) Requires the board to establish a Select Neighborhood Action Program (SNAP), which provides neighborhood improvement grants requiring a 10% cash or in-kind match from applicants. SNAP grants may only be made for projects capable of being completed within 12 months, which do not duplicate existing programs, do not require ongoing funding or services, and do not conflict with the community comeback plan;

(16) Outlines the categories for eligible SNAP grants, including neighborhood beautification projects, neighborhood organization or capacity projects, neighborhood-school partnership projects, capital purchase projects which include the acquisition of equipment or property, and neighborhood local infrastructure improvements;

(17) Allocates a minimum of 5% of trust funds, not to exceed $500,000, for SNAP grants;

(18) Authorizes one-half of the county use tax (if imposition of the use tax is approved by voters as required in current law) to be used for funding the community comeback trust;

(19) Changes the ballot language for submitting the use tax for voter approval, so that a description of the purposes for which the use tax will be used is included on the ballot;

(20) Authorizes the use tax to be described as the equivalent of a sales tax on purchases made from out-of-state sellers by in-state buyers and on certain intrabusiness taxable transactions; and

(21) Adds St. Louis County to the definition of "city" for the purpose of qualifying for Chapter 353, RSMo, urban redevelopment assistance.

The Community Comeback Act is subject to an emergency clause.

FISCAL NOTE: No impact on state funds.

PROPONENTS: Supporters say that the bill allows local funds to be used for the improvement of Highway 63 near Kirksville.

Testifying for the bill were Senator Maxwell; and Truman State University.

OPPONENTS: There was no opposition voiced to the committee.

Steve Bauer, Legislative Analyst