HCS HB 91 -- TAX INCREMENT FINANCING

SPONSOR:  Johnson (47)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Local
Government by a vote of 10 to 4.

Tax increment financing (TIF) cannot be used to fund more than
15% of the total estimated costs of a project that is primarily
retail or to develop retail sites where 25% or more of the area
is vacant, considered open space, or is currently being used for
agricultural or horticultural purposes.  This substitute exempts
these types of areas that are part of the redevelopment project
and were included in the municipality's comprehensive plan prior
to January 1, 2002.

Municipalities are required to pay 25% of the payments in lieu of
taxes they receive from TIF projects to taxing entities that
would otherwise be entitled to receive revenue from property
taxes.  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.

FISCAL NOTE:  No impact on state funds in FY 2006, FY 2007, and
FY 2008.

PROPONENTS:  Supporters say that the intent for using TIF
projects has changed because of the judicial expansion of the
definition "blighted" even though the definition has never been
statutorily changed.  Projects which now qualify as TIF projects
were not intended to be eligible by the original supporters, and
these TIFs divert much-needed revenue from schools.

Testifying for the bill were Representative Johnson (47);
Cooperating School Districts of Greater Kansas City; Missouri
National Education Association; Great Rivers Habitat Alliance;
St. Charles County; Missouri School Boards Association; and
Missouri Association of School Business Officials.

OPPONENTS:  Those who oppose the bill say that referendum
procedures need to be handled properly to avoid controversy and
chaos.  The selection of the 15% limit is arbitrary.

Testifying against the bill were Missouri Municipal League; City
of Kansas City; and Greg Smith.

Julie Jinkens McNitt, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:18 pm