Authorizes incentives for downtown redevelopment

SECOND REGULAR SESSION
SENATE BILL NO. 1688
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR GREGORY (15).
7289S.01I KRISTINA MARTIN, Secretary
AN ACT
To amend chapter 99, RSMo, by adding thereto six new sections relating to incentives for
downtown redevelopment.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapter 99, RSMo, is amended by adding thereto 1
six new sections, to be known as sections 99.1250, 99.1255, 2
99.1260, 99.1265, 99.1270, and 99.1275, to read as follows:3
99.1250. 1. Sections 99.1250 to 99.1275 shall be 1
known and may be cited as the "Missouri Downtown Economic 2
Stimulus Act Extension Act". 3
2. The general assembly finds and declares that: 4
(1) The Missouri downtown and rural economic stimulus 5
act ("MODESA") established a highly successful economic 6
development program that resulted in landmark urban 7
revitalization developments in the state's largest 8
metropolitan areas; 9
(2) MODESA-approved development projects in Kansas 10
City and St. Louis draw over twenty million visitors a year 11
and are among the most visited destinations by tourists to 12
the state; 13
(3) MODESA incentivized over two billion dollars in 14
private investment in the MODESA-approved development 15
projects, transforming the state's urban cores; 16
SB 1688 2
(4) MODESA-approved development projects have 17
generated thousands of jobs and provided billions of dollars 18
in economic impact; 19
(5) MODESA-approved development projects have 20
successfully drawn thousands of new residents to the state, 21
and have spurred substantial additional private development 22
in the state; 23
(6) The state has benefitted from the receipt of 24
substantial state tax revenue from the MODESA-approved 25
development projects; 26
(7) Pursuant to section 99.975, no new MODESA 27
applications could be approved after January 1, 2013; and 28
(8) By extending MODESA for the MODESA-approved 29
development projects, this law is intended to serve as a 30
catalyst for new economic development and revitalization in 31
the state, propel private investment, and generate jobs, tax 32
revenue, and other economic benefits. 33
3. Insofar as the provisions of sections 99.1250 to 34
99.1275 are inconsistent with the provisions of any other 35
law, the provisions of sections 99.1250 to 99.1275 shall be 36
controlling. 37
99.1255. Except as otherwise provided in sections 1
99.1250 to 99.1275, the definitions set forth in section 2
99.918 shall apply to expanded development projects under 3
sections 99.1250 to 99.1275. As used in sections 99.1250 to 4
99.1275, unless the context clearly requires otherwise, the 5
following additional terms shall mean: 6
(1) "Department", the Missouri department of economic 7
development; 8
(2) "Development project", any development project 9
approved pursuant to sections 99.915 to 99.1060 prior to 10
January 1, 2013; 11
SB 1688 3
(3) "Development project area", the area located 12
within a development area, as such development area may be 13
modified in accordance with sections 99.915 to 99.1060, 14
selected for a development project or an expanded 15
development project; 16
(4) "Developer", an entity identified by the 17
department as the developer of a development project in a 18
certificate of approval issued by the department for the 19
development project, or its affiliate, successor, or assign; 20
(5) "Expanded development project", any project of a 21
developer approved pursuant to sections 99.1250 to 99.1275 22
within a development area, as such development area may be 23
modified in accordance with sections 99.1250 to 99.1275, and 24
in furtherance of a development plan, as such development 25
plan may be amended, modified, or deemed amended consistent 26
with sections 99.1250 to 99.1275; 27
(6) "Expansion authority", a downtown economic 28
stimulus authority for a municipality, created pursuant to 29
section 99.921, and dedicated to carrying out expanded 30
development projects. Sections 99.924 to 99.933, and any 31
other provisions of sections 99.915 to 99.1060 applicable to 32
an authority, shall apply to any expansion authority; 33
(7) "Residential income tax increment", eighty-five 34
percent of the estimate of the income tax due the state and 35
municipality for the salaries or wages paid to natural 36
persons residing in a development project area of a 37
development project or an expanded development project 38
approved by the department; 39
(8) "State construction income tax increment", one 40
hundred percent of the estimate of the income tax due the 41
state for the salaries or wages paid to workers involved in 42
or related to the construction of an expanded development 43
SB 1688 4
project approved by the department. The estimate shall be a 44
percentage of the gross payroll which shall be based on an 45
analysis by the department of revenue of the practical tax 46
rate on gross payroll as a factor of overall taxable income. 47
99.1260. 1. Except as provided in sections 99.1250 to 1
99.1275, and upon application to the department consistent 2
with section 99.1270, sections 99.915 to 99.1060 are 3
extended and shall apply to a development project and 4
expanded development project. 5
2. Notwithstanding any other provision of law to the 6
contrary, including sections 99.915 to 99.1060, upon 7
approval of the department pursuant to section 99.1270, the 8
following shall apply to a development project and expanded 9
development project: 10
(1) A development area may be amended, expanded, or 11
modified, and may include three or more noncontiguous areas; 12
(2) A development area shall not be restricted to the 13
central business district and may be amended, expanded, or 14
modified to include areas outside of the central business 15
district; 16
(3) A development project area for a development 17
project may be amended, enlarged, reduced, or modified; 18
(4) A development plan shall be deemed to include an 19
expanded development project approved by the department; 20
(5) Upon application by the developer, the term of any 21
obligation issued to carry out a development project and the 22
term of any payments in lieu of taxes related to a 23
development project shall be extended to thirty-five years. 24
Any obligations or requirements set forth in sections 99.915 25
to 99.1060 shall run with the extended term; 26
(6) Obligations issued in support of an expanded 27
development project may be issued by a municipality, an 28
SB 1688 5
authority, an expansion authority, or any state or municipal 29
authority formed by a municipality in which a development 30
project area, or portion thereof, is located; 31
(7) The term of any obligation issued to carry out an 32
expanded development project or to refund outstanding 33
obligations and the term of payments in lieu of taxes 34
related to an expanded development project may not exceed 35
thirty-five years. Any obligations or requirements set 36
forth in sections 99.915 to 99.1060 shall run concurrent 37
with said term; 38
(8) The state income tax increment for an expanded 39
development project shall be up to eighty-five percent of 40
the estimate of the income tax due to the state for salaries 41
or wages paid to new employees in new jobs at a business 42
located in the development project area; 43
(9) The state sales tax increment for an expanded 44
development project shall be up to eighty-five percent of 45
the incremental increase in the state sales tax revenue in 46
the development project area. The provisions of section 47
99.918 requiring a de minimis portion finding by the 48
Missouri development finance board and limiting the state 49
sales tax increment in relation to the relocation of a 50
Missouri facility to a development project area shall not 51
apply; 52
(10) One hundred percent of payments in lieu of taxes 53
and eighty-five percent of economic activity taxes generated 54
in relation to an expanded development project shall be used 55
each year of the approved term to support development 56
project costs; 57
(11) An office displacement percentage and retail or 58
restaurant displacement percentage shall not apply to an 59
expanded development project; 60
SB 1688 6
(12) An application for an expanded development 61
project shall not be required to demonstrate that it could 62
not be financed without the use of MODESA or other state 63
incentives or funding; 64
(13) Development project costs incurred prior to the 65
department's approval of an expanded development project may 66
be reimbursed under sections 99.1250 to 99.1275 and funds 67
committed or incurred prior to said approval may qualify for 68
any local match requirement; 69
(14) An expanded development project shall be eligible 70
for all tax credits, subsidies, incentives, discounts, 71
rebates, or other economic development programs authorized 72
under state law; 73
(15) In addition to those identified in section 74
99.918, economic activity taxes applicable to an expanded 75
development project shall include personal property taxes, 76
taxes imposed on sales or charges for sleeping rooms paid by 77
transitional guests of hotels and motels in the development 78
project area, license fees, and any other fees or 79
assessments related to economic activity in the project 80
development area of the expanded development project; 81
(16) Sections 99.915, 99.954, 99.960, and 99.975 shall 82
not apply to expanded development projects. Section 99.942 83
shall not apply to a development project or an expanded 84
development project. The duration of disbursements under 85
section 99.960 shall be thirty-five years unless otherwise 86
determined under this section; and 87
(17) The department by rule may determine the 88
reporting requirements applicable to an expanded development 89
project. 90
99.1265. 1. An expanded development project approved 1
by the department shall be eligible to participate in the 2
SB 1688 7
programs established by sections 67.1401 to 67.1571, 100.010 3
to 100.200, and 238.200 to 238.280. 4
2. For any expanded development project approved by 5
the department pursuant to section 99.1270, the department 6
shall disburse the state construction income tax increment 7
to support development project costs or obligations issued 8
to carry out the expanded development project. State 9
construction income tax increment disbursements shall cease 10
within one hundred eighty days of the date on which the 11
department determines that the construction of the expanded 12
development project is complete and the expanded development 13
project has opened to the public. Upon showing that one 14
hundred percent of the actual income tax due the state for 15
the salaries or wages paid to workers involved in or related 16
to the construction of an expanded development project 17
exceeded state construction income tax increment, the 18
department shall disburse the excess amount to the developer 19
of the expanded development project to be expended on or 20
used to reimburse any reasonable or necessary costs incurred 21
or estimated to be incurred in furtherance of the expanded 22
development project. 23
3. For any expanded development project approved by 24
the department pursuant to section 99.1270, the department 25
shall disburse the residential income tax increment to 26
support development project costs or obligations issued to 27
carry out the expanded development project. The duration of 28
residential income tax disbursements shall not exceed thirty- 29
five years. The approved term notwithstanding, residential 30
income tax disbursements shall terminate when development 31
financing for an expanded development project is 32
terminated. The following shall apply in relation to the 33
residential income tax increment: 34
SB 1688 8
(1) The residential income tax increment estimate may 35
be developed by the department in conjunction with the 36
department of revenue based on actual tax returns for the 37
natural persons residing within the development project area 38
for the expanded development project; 39
(2) The department, with the assistance of the 40
department of revenue, shall develop an alternative estimate 41
for the residential income tax increment that is based on 42
the greater of: 43
(a) The median household income for the metropolitan 44
statistical area in which the development project area is 45
located; or 46
(b) The average projected income of the natural 47
persons residing within the development project area for the 48
expanded development project, with such average income 49
projection updated every five years. After the first year 50
in which the alternative estimate is applied, the 51
alternative estimate shall be adjusted annually by applying 52
the percentage change in the Consumer Price Index 53
immediately prior to the date the adjustment will take 54
effect; and 55
(3) The developer shall elect whether to calculate the 56
residential income tax increment based on the estimate or 57
the alternative estimate. An election may not be rescinded 58
more frequently than annually and notice of any change in 59
election shall be submitted to the department no later than 60
sixty days prior to the start of a calendar year. 61
4. Upon application to and approval of the department, 62
a residential income tax increment may be developed and 63
disbursed to support development project costs or 64
obligations issued to carry out a development project. The 65
duration of residential income tax disbursements shall be 66
SB 1688 9
concurrent with the term of any obligation issued to carry 67
out the development project. The approved term 68
notwithstanding, residential income tax disbursements shall 69
terminate when development financing for the development 70
project is terminated. The residential income tax increment 71
shall be calculated consistent with subsection 3 of this 72
section. 73
5. An expanded development project approved by the 74
department pursuant to section 99.1270 shall qualify for the 75
most favorable economic development rate offered by a public 76
utility servicing the development project area for the 77
expanded development project. The duration of the rate 78
shall coincide with the term of any obligation issued to 79
carry out an expanded development project. 80
99.1270. 1. Approval of an expanded development 1
project or other authorization under section 99.1270 shall 2
be governed by this section, which shall apply in lieu of 3
sections 99.948 to 99.951. 4
2. An application may be submitted by a developer for 5
an approval or authorization on a form, and in such a 6
manner, as determined by the department. 7
3. An application for approval of an expanded 8
development project shall include the following: 9
(1) Identification of the developer and, if the 10
applicant is an affiliate, successor, or assign of the 11
developer, documentation substantiating the same; 12
(2) Identification of the mayor or chief executive 13
officer of the municipality in which the expanded 14
development project will be located; 15
(3) The location of the development site for the 16
expanded development project; 17
SB 1688 10
(4) A description of any amendment, expansion, or 18
modification of the development area associated with the 19
expanded development project and a resolution from the 20
governing body or other evidence from the mayor or chief 21
executive officer of the municipality consenting to such 22
modification; 23
(5) A description of any amendment, enlargement, 24
reduction, or modification of the development project area 25
of a development project that is related to or sought in 26
conjunction with the expanded development project; 27
(6) A description of the development project area for 28
the expanded development project; 29
(7) A description of the expanded development project, 30
including, but not limited to, the facilities, structures, 31
operations, and infrastructure to be developed as part of 32
the project, the estimated jobs to be created in conjunction 33
with the project, including construction and permanent jobs 34
and full-time and part-time equivalents, the estimated 35
number of natural persons that will reside in the 36
development project area for the project, the consistency of 37
the project with the comprehensive plan of the municipality 38
as a whole, and the estimated development project costs; 39
(8) An economic impact analysis showing the projected 40
economic benefits to the municipality and the state from the 41
expanded development project; 42
(9) A description of community and other benefits to 43
result from the project; 44
(10) The anticipated sources of funds to pay the 45
estimated development project costs and evidence of any 46
commitments to finance the development project costs; 47
(11) The anticipated type and term of the sources of 48
funds to pay the estimated development project costs, 49
SB 1688 11
including the anticipated type of terms of obligations 50
anticipated to be issued; 51
(12) The most recent equalized assessed valuation of 52
the property within the development project area of the 53
expanded development project; 54
(13) Information deemed necessary by the department to 55
determine the baseline estimates for the state sales tax 56
increment and the state income tax increment; 57
(14) Information deemed necessary by the department to 58
determine the state construction income tax increment 59
estimate; 60
(15) Information deemed necessary by the department to 61
determine the residential income tax increment estimate and 62
alternative estimate; 63
(16) Projected amounts of state sales tax increment, 64
state income tax increment, state construction income tax 65
increment, and residential income tax increment funding 66
sought in relation to the expanded development project and 67
the term of such funding; 68
(17) Projected payments in lieu of taxes and economic 69
activity payments in support of the expanded development 70
project and the term of such funding; 71
(18) Expressions of municipal or local support for the 72
expanded development project; and 73
(19) Any other information as the department may 74
reasonably require. 75
4. Following receipt of an application, the department 76
shall determine whether the application is complete. If the 77
application is not complete, the department shall notify the 78
applicant in writing of the information needed to complete 79
the application. An applicant may amend or supplement its 80
SB 1688 12
application at any time prior to approval by the department 81
including after it has been deemed complete. 82
5. Upon determining that an application is complete, 83
the department shall review the application and request such 84
additional information that it deems necessary. Within 85
sixty days of the completeness determination, the department 86
shall approve the application unless it determines that the 87
expanded development project is contrary to the best 88
interests of the state. For an approved application, the 89
department shall issue a certificate of approval containing 90
the terms and conditions of the approval, including, but not 91
limited to, the amount and a description of development 92
project costs approved for reimbursement or payment, the 93
baseline year for the state sales tax increment and state 94
income tax increment, the types and amounts of increments 95
approved, and the term of such funding. 96
99.1275. 1. The department may promulgate rules and 1
regulations as necessary or appropriate to implement the 2
provisions of this law. 3
2. In order to facilitate the prompt implementation of 4
this law, regulations promulgated by the department shall be 5
deemed temporary regulations which shall expire not later 6
than two years following the publication of the temporary 7
regulation. Temporary regulations promulgated by the 8
department shall be exempt from chapter 536. 9
3. The department's authority to adopt temporary 10
regulations under subsection 2 of this section shall expire 11
two years after the effective date of this section. 12
Regulations adopted after this period shall be promulgated 13
as provided by law. 14
✓