HCS HB 1070 -- TAX INCREMENT FINANCING

SPONSOR:  Johnson (47)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Local
Government by a vote of 14 to 0.

This substitute changes the laws regarding tax increment
financing (TIF).  In its main provisions, the substitute:

(1)  Prohibits the revenue from any increase in any tax within a
TIF district from being used for anything other than the
specified purpose of the tax increase (Section 67.112, RSMo);

(2)  Changes the definitions of "blighted area" and "conservation
area" (Section 99.805(1));

(3)  Changes the definition of "redevelopment project costs" to
include extraordinary professional service costs which are
required under the Real Property Tax Increment Allocation
Redevelopment Act (Section 99.805(14));

(4)  Requires that conditions and contingencies of commitments to
finance redevelopment project costs be included in the required
general description of a redevelopment plan (Section 99.810.1);

(5)  Requires redevelopment plans adopted by municipal and county
governments to be re-adopted by two-thirds of all members of the
governing body if a petition is submitted according to procedures
established in the substitute (Section 99.810.2);

(6)  Requires redevelopment plans adopted by municipal and county
governments to be re-adopted by two-thirds of all members of the
governing body if the TIF Commission makes a negative
recommendation (Section 99.820.4);

(7)  Increases from 50% to 90% the amount of total additional
economic activity revenue from taxes, penalties, and interest
that is imposed by a municipality or other taxing district which
must be allocated to a separate segregated fund within the
special allocation fund for redevelopment plans and projects
approved or adopted after August 31, 1991.  Certain types of
taxes and fees are excluded from this allocation (Section
99.845.3);

(8)  Excludes any sales tax imposed by Jackson County for the
purpose of sport stadium improvement from the additional economic
activity revenue allocation (Section 99.845.3);

(9)  Increases from 50% to 90% the amount of defined new state
revenues which may be available for appropriation by the General
Assembly to the Department of Economic Development Supplemental
Tax Increment Financing Fund for distribution to municipalities
(Section 99.845.4);

(10)  Limits to 15 years the duration of any redevelopment plan
or project that is approved to receive over 50% of new state
revenues by the Director of the Department of Economic
Development and the Commissioner of the Office of Administration
(Section 99.845.10(4));

(11)  Authorizes TIF projects within the 100-year flood plain in
St. Charles County if the redevelopment area actually abuts a
river or major waterway and is substantially surrounded by
contiguous properties with residential, industrial, or commercial
zoning classifications.  Currently, no TIF projects are allowed
in the flood plain in St. Charles County (Section 99.847); and

(12)  Provides that if a TIF project includes residential uses,
real property tax revenues attributable to the residential
portion of the development will pass through directly to the
affected school districts unless commission members representing
the affected districts say they will forgo this revenue (Section
99.866).

FISCAL NOTE:  No impact on state funds in FY 2007, FY 2008, and
FY 2009.

PROPONENTS:  Supporters say that abuses of TIF need to be
curtailed, especially when TIF gives some companies a competitive
economic advantage over existing established local businesses.
The bill establishes more specific guidelines for determining
what constitutes "blight" in an attempt to refocus TIF on its
original purpose of redevelopment, as opposed to development.

Testifying for the bill were Representative Johnson (47); Lee's
Summit R-7 School District; Cooperating School Districts of
Greater Kansas City; Great Rivers Habitat Alliance; Cooperating
School Districts of Greater St. Louis; Missouri School
Administrators Coalition; Missouri National Education
Association; Missouri School Boards' Association; Missouri
Association of School Business Officials; City of St. Charles;
Clifford Underwood; Phillis Hardy; St. Louis County Municipal
League; Missouri Municipal League; St. Louis County; Missouri
Retailers Association; and Kathy Tripp.

OPPONENTS:  Those who oppose the bill say that TIF is an
important economic development tool at the local level, and the
state should not try to usurp that local control.

Testifying against the bill were Missouri Economic Development
Council; Missouri Growth Association; Missouri Chamber of
Commerce and Industry; and Missouri Economic Development
Financing Association.

OTHERS:  Others testifying on the bill say the intent of the
legislation is admirable, but specific areas addressed in the
bill need to be reexamined.

Others testifying on the bill were City of Kansas City; Economic
Development Corporation of Kansas City; and St. Charles County.

Julie Jinkens McNitt, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:41 am