During 1997, the Missouri General Assembly passed Senate Bill 303, amending the Transportation Development District Act to make it more flexible and useable by local communities. (1)

Transportation Development Districts have been available in Missouri for almost a decade. To date, however, only a few Transportation Development Districts have been authorized or utilized to construct a local or state road improvement. The 1997 amendments should change that. The original act was designed to allow state, city or county road projects spanning large areas and supported by a broad tax base, The Act required a public vote to approve and implement plans for a district and the specific road improvements which the district would undertake.

Under the 1997 amendments to the Act several important changes have occurred. It is now possible for a Transportation Development District to be created by petition presented to a circuit court by property owners (in fact, by a single property owner). (2) Once the district is created it may impose a sales tax, (3) an ad valorem property tax, (4) a special assessment, (5) or perhaps even a business license tax, (6) in order to pay for road improvements which will be turned over to the Missouri Department of Transportation or a local transportation authority (a city, a county, a road district or similar entity) after completion and payment of any bonds. The boundaries of the Transportation Development District may include several counties or a single parcel of property.

Transportation Development Districts are independent political subdivisions. Debt incurred by such districts is totally independent of the financial statements of the state Department of Transportation or the city or county which will own and maintain a project once it is completed. Still, the Department of Transportation and affected municipalities approve all plans and participate in the construction process of all projects.

The taxes imposed by a Transportation Development District may now be approved by a vote of owners of real estate within the District if there are no registered voters. Although the procedural requirements are still somewhat cumbersome, the availability of this revenue-raising mechanism focused on a single tract of developing real property may offer a ready source of new tax revenue for public street improvement construction and take some of the burden off tax increment financing and other tax assistance and tax abatement tools which have at least in some areas become controversial.

If, for instance, a large retail developer is seeking approval of zoning for a project which will require road improvements in the vicinity, it is now possible using the Transportation Development District Act to impose up to a one percent sales tax (on top of all existing sales taxes), which is collected by the Transportation Development District, and which is available to pay for road improvements. The sales taxes, along with real estate taxes and assessments, can be used to amortize the principal on bonds issued by a district and should, in the case of large retail developments particularly, be able to fund a significant amount of public infrastructure improvements without taking tax money away from other jurisdictions or burdening other taxpayers.

ENDNOTES

1. Chapter 238, Revised Statutes of Missouri (RSMo).
2. Section 238.207, RSMo.
3. Section 238.235, RSMo.
4. Section 238.232, RSMo.
5. Section 238.230, RSMo.
6. Section 238.233, RSMo.