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Gilmore & Bell

ECONOMIC DEVELOPMENT LAW NEWSLETTER

2009 Missouri Legislative Updates -
HB 191 amends the TIF Act and the TDD Act

 

TIF ACT AMENDMENTS

Section 99.865 of the TIF Act requires municipalities to annually “prepare a report concerning the status of each redevelopment plan and redevelopment project” and submit the report to the Department of Economic Development. House Bill 191, passed during the last legislative session, revises the TIF Act to prohibit the municipality from implementing new TIF projects for at least five years if the annual report is not filed.

Any municipality that fails to comply with the annual TIF Act reporting requirements will be prohibited from implementing any new tax increment finance project for a period of no less than five years from such municipality's failure to comply. Section 99.865.7, RSMo.

  • We interpret the new provision to only apply prospectively to future TIF projects.  Current TIF projects (including the capture of applicable TIF revenues) would not be affected.
  • A municipality may submit its annual report at any time during the year.  The reporting period can be for any 12-month period ending any time prior to September 30 of the reporting year.  A standard annual report will only
  

     

  • cover a 12-month period.  However, if a municipality has not previously filed annual reports, we recommend that by August 28, 2009, the municipality either (1) prepare a report for each year that a report was not previously filed or (2) prepare a single report that covers all prior years for which reports were not filed.
  • We believe the 5-year penalty period will begin January 1 of the year following a municipality’s failure to comply.  It is not clear who will determine whether the penalty remains in effect for more than 5 years.
  • Please also note that the TIF Act imposes two other ongoing responsibilities for municipalities with existing TIF projects: (1) annually reporting information about any business which relocates to the TIF area to the Department of Economic Development by the last day of February and (2) holding a public hearing every five years after approving a redevelopment plan to determine if the TIF project is making satisfactory progress.  While the penalty for not filing the annual reports under Section 99.865.7 of the TIF Act does not currently apply to these two ongoing responsibilities, municipalities should complete these actions to ensure full compliance with the TIF Act.

The following forms may be used to prepare an annual TIF report:

http://www.missouridevelopment.org/upload/2008_loctif_annual_report_form(06-08).pdf

http://www.missouridevelopment.org/upload/tif_rptinstructions2007.pdf

TDD ACT AMENDMENTS

  • Section 238.235 of the TDD Act was amended to require the Department of Revenue to collect all TDD sales taxes, beginning with all sales taxes generated from sales on or after January 1, 2010.  Accordingly, the TDD (or whomever it has previously contracted with for sales tax collection) will be responsible for collecting sales taxes generated from sales occurring through December 31, 2009, even though such sales taxes are not remitted until after January 1, 2010.  The Department of Revenue is currently formulating its TDD sales tax collection procedures.  All TDDs should be prepared, by the end of Summer 2009, to provide the Department of Revenue with a TDD tenant list including the names, addresses and Missouri Tax Identification Numbers of all businesses located within the TDD.  TDDs must keep the Department of Revenue notified of all new businesses opening in the TDD area.
  • Section 105.145, RSMo. was amended to impose a fine of not to exceed $500 per day for failure to timely submit an annual financial report to the State Auditor.  This report will continue to be due (1) within four months after the TDD's fiscal year end (if unaudited), or (2) within six months after the TDD's fiscal year end (if audited).  If Gilmore & Bell is your district administrator, we will continue to assist the TDD in preparing unaudited financial statements (if no audited statements will be prepared) and to coordinate the timely submittal of the annual financial report to the State Auditor.

 

  

 

  • Section 238.207 of the TDD Act was amended to require additional information in the petition.  A petition for the creation of a TDD must now include “Details of the budgeted expenditures, including estimated expenditures for real physical improvements, estimated land acquisition expenses, estimated expenses for professional services and estimated interest charges.”
  • Section 238.212 of the TDD Act was amended to require a public hearing prior to district formation.  The circuit court must order at least one public hearing on the creation and funding of the proposed TDD if the petition to create the TDD was filed by the owners of all real property within the proposed TDD.
  • These TDD Act amendments will go into effect on August 28, 2009.  TDD petitions that are pending on that date may need to be amended to include the additional information set forth in the amendment to Section 238.207, in order to ensure compliance with the new requirements before a final judgment is issued.

GILMORE & BELL, P.C.
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Gilmore & Bell, P.C., has one of the largest public finance practices in the United States, and serves as bond counsel or special counsel to many municipalities and local government units. Our service is designed to supplement, and not replace, the services offered by local government general counsel. This e-mail may be considered an advertisement for purposes of regulating commercial electronic mail messages. If you do not wish to receive commercial e-mail communications in the future, select "reply" to unsubscribe. If you have questions about this article, please contact David Bushek in Kansas City (816-221-1000) or Mark Grimm in St. Louis (314-436-1000). Postal communications: 2405 Grand Blvd., Suite 1100, Kansas City, Missouri, 64108.