141.3 Local Funding Options
- 1 141.3.1 Transportation Development Districts (TDDs)
- 1.1 Purpose and Powers of a TDD
- 1.2 22.214.171.124 TDD Frequently Asked Question (Applies to “On State System” Projects)
- 1.2.1 What is a Transportation Development District?
- 1.2.2 Who can form a TDD?
- 1.2.3 How does a TDD form?
- 1.2.4 What is a qualified voter?
- 1.2.5 How are the Board Members appointed/elected?
- 1.2.6 How many elections are required to form a TDD?
- 1.2.7 How can a TDD help fund a project?
- 1.2.8 Why do people choose to form a TDD?
- 1.2.9 What is the role of MoDOT in a TDD?
- 1.2.10 What is the local role in a TDD?
- 1.2.11 How do projects comply with the National Environmental Policy Act (NEPA)?
- 1.2.12 Can TDDs overlap and, if so, what impact does this have on the tax levy?
- 1.2.13 How does a TIF District work with a TDD?
- 1.2.14 What is the difference between a TDD and Transportation Corporation (TC)?
- 1.3 126.96.36.199 Steps To Forming A Transportation Development District (TDD)
- 1.3.1 188.8.131.52.1 Step 1 - File a Petition With the Circuit Court
- 1.3.2 184.108.40.206.2 Step 2 - Hearing on Petition
- 1.3.3 220.127.116.11.3 Step 3 – Election, Vote on Projects and Funding
- 1.3.4 18.104.22.168.4 Step 4 – Election, Board of Directors
- 1.3.5 22.214.171.124.5 Step 5 - Duties of the Board
- 1.3.6 126.96.36.199.6 Step 6 - Project Approval
- 1.3.7 188.8.131.52.7 Step 7 - Project Financing
- 1.3.8 184.108.40.206.8 Step 8 - Purchases and Access Control of Property
- 1.3.9 220.127.116.11.9 Step 9 - Condemnation and Relocation
- 1.3.10 18.104.22.168.10 Step 10 - Increasing or Decreasing the Number of Projects
- 1.3.11 22.214.171.124.11 Step 11 - Property Conveyed to District by the State
- 1.3.12 126.96.36.199.12 Step 12 - Regulation of Projects
- 1.3.13 188.8.131.52.13 Step 13 – Audits
- 1.3.14 184.108.40.206.14 Step 14 - Transfer of Projects to the Commission or Authority and Abolishment of the District
- 2 141.3.2 Transportation Corporations (TCs)
- 2.1 220.127.116.11 Purpose and Powers of a Transportation Corporation
- 2.2 18.104.22.168 Frequently Asked Questions about TCs
- 2.3 22.214.171.124 Steps To Forming a Transportation Corporation (TC)
- 2.3.1 126.96.36.199.1 Step 1 - Submit an application to MHTC to form TC
- 2.3.2 188.8.131.52.2 Step 2 - First Commission Meeting Following Receipt of Application (Approximately two months later)
- 2.3.3 184.108.40.206.3 Step 3 - Public Hearing and Notices (Approximately two months to complete)
- 2.3.4 220.127.116.11.4 Step 4 - Second Commission Meeting (Approximately two months later)
- 2.3.5 18.104.22.168.5 Step 5 - First Corporation Board Meeting
- 2.3.6 22.214.171.124.6 Step 6 - Approval of Articles, Bylaws, Finance Plan, Project and Project Plans
- 2.3.7 126.96.36.199.7 Step 7 - Project Title Transfer, Corporation Dissolution
- 3 141.3.3 Community Improvement Districts (CIDs)
- 4 141.3.4 Neighborhood Improvement Districts
- 5 141.3.5 Tax Increment Financing
- 6 141.3.6 Economic Development Sales Tax
141.3.1 Transportation Development Districts (TDDs)
The Missouri Transportation Development District (TDD) Act for State Highway System Projects, requires the formation of a development district be initiated by petitioning the circuit court, as described below. If the TDD petitioners are interested in applying for any of the other MoDOT Innovative Finance programs, they should submit a MoDOT Partnership Development application. If the application requests MoDOT funding, the application will follow the appropriate partnership program review process. Qualified district voter approval must be obtained prior to entering into a financing agreement with the Missouri Highways and Transportation Commission (Commission).
After the circuit court declares the TDD formed, the Chief Counsel’s Office will forward a copy of a cooperative agreement to the transportation district. The TDD, in the interim, elects its board members and officers. The TDD must execute the cooperative agreement, between the Commission and the TDD, before the Commission will approve the project and appoint a Commission representative to the TDD board. Pursuant to the TDD Act, prior to project construction and imposition of any tax the Commission must grant approval of the project.
Below is an abbreviation of the information contained within the Missouri TDD Act. For full details on TDDs, refer to Section 238.200 – 275, RSMo. For purposes of the Act, "qualified district voters" means if any persons eligible to be registered voters reside within the proposed district, such persons who have registered to vote, or if no persons eligible to be registered voters reside within the proposed district, the owners of real property located within the proposed district.’’
Purpose and Powers of a TDD
TDDs can do the following:
- Fund, promote, plan, design, construct, improve, maintain and operate one or more projects or assist in doing so and is a political subdivision of the state.
- Work with projects that include bridges, streets, roads, highways, access roads, interchanges, intersections, signing, signalization, parking lots, bus stops, stations, garages, terminals, hangars, shelters, rest areas, docks, wharfs, lake or river ports, airports, railroads, light rail, other mass transit and any similar or related improvement of infrastructure.
- Form a board of directors who will possess and exercise all of the district's legislative and executive powers, after qualified district voter approval.
- Contract with the Missouri Highways and Transportation Commission (MHTC) or the local transportation authority to receive revenue from the district to apply to project costs.
- Increase or decrease the number of projects it is authorized to complete, subject to voter approval, or modify a project subject to MHTC or local transportation authority approval.
- Levy special assessments, after qualified district voter approval.
- Impose a property tax of 10 cents/$100 assessed valuation, after district voter approval.
- Impose a sales tax not to exceed one percent (1%), after qualified district voter approval.
- Collect tolls or fees on appropriate highways and roads, following qualified district voter approval.
- Incur contract and liabilities appropriate to its purpose.
- Purchase land or receive contribution of land and cash for project right-of-way.
- Limit and control access from adjacent property to a district project.
- Sell and convey excess right-of-way for fair market value to any person or entity.
- Contract with a federal agency, state agency, political subdivisions of the state, MHTC, a local transportation authority, a corporation, partnership or individual regarding funding, promotion, planning, designing, constructing, improving, maintaining or operating a project.
- Contract with MHTC or a local transportation authority to transfer the project to them free of cost.
- Sue and be sued in its name, and receive service of process.
- Fix compensation of its employees and contractors, with competitive bidding practices for contracts in excess of $5,000, and award contracts based on lowest and best.
- Purchase property necessary or convenient for its activities, with competitive bidding practices for purchases in excess of $1,000, and award purchases based on lowest and best.
- Collect and disburse funds for its activities.
- Condemn land for a project, upon prior approval by MHTC or the local transportation authority, per Chapter 523, RSMo.
- Obtain insurance, the cost of which will be charged to the project, to protect itself, its officers and its employees, against loss of real or personal property of any kind.
- Require contractors to obtain liability insurance, also naming the district, its directors and employees as insured.
- Self-insure if economically unfeasible to purchase insurance or if it has sufficient funds to cover anticipated judgments.
- Pay for costs of an audit by the state auditor, occurring no less than once every three years.
- Exercise other powers necessary or convenient for the district to accomplish its purposes.
188.8.131.52 TDD Frequently Asked Question (Applies to “On State System” Projects)
What is a Transportation Development District?
Commonly referred to as “TDD,” a Transportation Development District is a transportation project development tool, governed by state statute, which is available for use by registered voters, local communities and property owners throughout Missouri. A TDD is a political subdivision of the state of Missouri, designed to facilitate specific public transportation improvements through the collection of taxes and the borrowing of funds. A TDD has geographical jurisdiction and is created by vote of “qualified voters”; the vote is then approved by the circuit court. The revenue of a TDD (most frequently sales tax) can only be used for public transportation and transportation-related improvements.
Who can form a TDD?
A TDD can be formed by four groups: registered voters, a local transportation authority, a multijurisdictional transportation authority and property owners. If registered voters seek to form a TDD, at least 50 registered voters from each county the TDD is being formed in must petition the court. If a local transportation authority or multi-jurisdictional transportation authorities seek to form the TDD, a governing body of the transportation authorities involved, within any county in which the proposed project may be located, may file the petition. If property owners request formation of a TDD all “real property” owners within the proposed district may file the petition to form the TDD.
How does a TDD form?
Filing a petition with the circuit court in a county in which the TDD is proposed begins formation of the TDD; however, in the case of a multi-jurisdictional TDD, the local transportation authorities must adopt a resolution calling for establishment of the TDD prior to filing the petition. The court hears the case and determines the legality of the TDD and the proposed funding method. The court then rules on the legality and justifiableness of the petition and decides on it accordingly.
- Petition Filed by Registered Voters or Governing Body
- The court will then certify the questions regarding district creation, project development and proposed funding of the TDD. After public notice and a hearing scheduled at the court’s discretion, an election for the TDD creation, project development and proposed funding shall be submitted for voter approval. The judge will then certify the vote and transmit such actions to the circuit court. If passed, an election will then be held to select the TDD board of directors, unless the petitioners were multi-jurisdictional governing bodies. In that event, the board of directors is composed of the presiding officers of each of the local transportation authorities within the district and their appointees.
- Petition Filed By Property Owners
- After the court enters its judgment allowing formation, the court will declare the district organized and will certify the funding methods. Unless objections are filed against the petition, no hearing is required. The board of directors, not less than five and not more than fifteen, will be elected from the property owners or representatives of owners.
What is a qualified voter?
A “qualified voter” is a registered voter living within the boundaries of the TDD, unless property owners form the TDD and no registered voters reside within the proposed TDD boundaries. In this case, the qualified voters are these property owners and are given one vote for each acre of land they own inside of the TDD boundary.
How are the Board Members appointed/elected?
If the district is being formed by the registered voters residing within it, the court causes an election to be held to elect a board of directors from the voters 21 years or older that reside in the district and file with the county clerk; not less than five nor more than fifteen members may be elected to the board. If a multi-jurisdictional transportation authority with four or more local transportation authorities forms the TDD, the board of directors will be comprised of the presiding officers of each local transportation authority. If the district has two or three local transportation authorities, the board will be comprised of the presiding officer of each authority and one person designated by the governing body of each local authority. If the TDD is comprised of property owners, the court shall call for a meeting of property owners to elect a board; not less than five nor more than fifteen members may be elected from the group of property owners.
How many elections are required to form a TDD?
To develop a TDD certain elections are held; these elections vary depending on who forms the TDD. When registered voters or local transportation authority forms a TDD, separate votes are held on formation, board of directors and funding. If property owners form the TDD, owners cast their ballot by petitioning the court, which approve any measure submitted to them as voters. If a multi-jurisdictional transportation authority forms the TDD, the question of TDD formation and funding mechanism are put forth to qualified voters. If the funding mechanism is sales tax, there is one vote for organization of the TDD and the imposition of sales tax.
How can a TDD help fund a project?
A TDD may issue notes, bonds and other debt securities to fund a transportation project. The bonds shall exclusively be the responsibility of the district and may be payable solely out of the TDD funds. This does not constitute a debt or liability of the state or any agency or political subdivision of the state. Neither the TDD, the local transportation authority, nor the Commission shall be obligated to pay such bonds with any funds other than those specifically pledged to repayment of the bonds. The district is allowed to levy sales taxes, impose tolls, impose property taxes and use special assessment, within the boundaries of the TDD, to repay said debt. The tax rate must be levied at the same rate through out the district. Proposed funding must be submitted to qualified voters for approval. If the TDD cannot generate enough revenue to fund the project their options include restructuring the debt financing, changing the tax rate or seeking additional funds elsewhere.
Why do people choose to form a TDD?
A TDD is formed in order to facilitate specific transportation related projects in the state of Missouri. The approval of a TDD allows for the creation of a political subdivision with the ability to generate funding for certain projects. The TDD is allowed to generate money by issuing debt and levying taxes in order to repay the debt incurred by the district. People choose to form a TDD when they are looking to levy taxes in order to pay for a transportation project.
What is the role of MoDOT in a TDD?
- The Missouri Highways and Transportation Commission (MHTC) is authorized to adopt reasonable administrative rules regarding TDDs and have developed guidelines for the MoDOT district offices to achieve this.
- The circuit court is required to serve the MHTC with a copy of every TDD petition filed.
- The MHTC is required to respond within 30 days after receipt of service to file an answer to the development districts petitions, stating agreement with or opposition to the creation of the district. If the MHTC file its answer opposing the creation of the district, it will explain the legal reasons why the petition is defective, why the proposed district is illegal or unconstitutional, or why the proposed method for funding the district is illegal or unconstitutional.
- The MHTC must approve all state highway system projects as a necessary and desirable extension of the state system, subject to entering into a mutually satisfactory agreement regarding development and future maintenance of the project.
- A TDD must enter into an agreement with the MHTC and receive Commission approval of the project’s plans and specifications before imposition of the tax or fee to fund any portion of the project and before construction of any state system project can occur.
- The MHTC must appoint an advisor to the TDD and approve modifications to plans, specifications and project description.
- After a TDD is formed, the MHTC must approve issuance of Commission bonds on behalf of a TDD, right of way access control and the acquisition of land for the project right of way.
- The TDD may condemn land for a project in the name of the State of Missouri, upon prior approval of the MHTC. If the TDD project results in the acquisition of real property or in any person being displaced from their home or business, the district shall provide relocation assistance, make relocation payments and follow all other procedures of state and federal statutes.
- The TDD must enter into an agreement to transfer project ownership to the MHTC.
- MoDOT will not issue permits for a project to be funded by a TDD until after the TDD is formed, it is approved by the MHTC and a project agreement is executed.
What is the local role in a TDD?
The local role replaces the MHTC and MoDOT’s role if the TDD project is on the local system only.
How do projects comply with the National Environmental Policy Act (NEPA)?
The TDD should work with the appropriate MoDOT district office to get a NEPA classification for the project. The MoDOT district will submit the project to MoDOT’s Environmental Studies, who will work with the Federal Highway Administration (FHWA) to get a NEPA classification for the development. The majority of projects will require minimal work to comply with environmental policy; however, some projects may be classified as requiring an “environmental assessment” or “environmental impact statement,” which will require one – three years to get NEPA clearance. Based on the classification, MoDOT works with the district and the TDD to advise them on what they need to do to comply with NEPA and all of the other federal and state environmental laws and regulations. The TDD must supply MoDOT with the proper correspondence and permits as proof that they did comply.
Can TDDs overlap and, if so, what impact does this have on the tax levy?
At the present time, the statutes are silent on the question of whether TDD boundaries may overlap.
How does a TIF District work with a TDD?
Tax increment financing districts (TIF) and TDDs are separate development tools used to assist in financing public improvements. A TDD creates a new taxing district to raise additional tax revenue to pay for transportation improvements, while a TIF pays for transportation and other public improvements by allowing taxing jurisdictions to forego a portion of the increased tax revenue generated by the new economic development within the TIF. Both the TDD and TIF projects can be publicly financed by the issuance of bonds. The TIF can justify the taxing jurisdiction foregoing the increased tax revenue because the area involved is declared blighted and without funding, the improvements would not be made and economic stagnation would continue. TDD projects are limited in scope to transportation improvements and there is no requirement that the area being developed be considered blighted.
TIF and TDD can work together to finance a project. When a transportation-linked project is to be principally financed by TIF, a TDD can be used to fund the transportation related segments of the project. This allows TIF revenues to be used to finance other public enhancements that are part of the TIF redevelopment project or reduce the amount of TIF obligations needed to finance a project. TIF working with a TDD is also advantageous if allowing for additional improvements that would not be otherwise financed, due to not being part of the TIF redevelopment project or budget restrictions. If a TDD is formed in the boundaries of a TIF redevelopment area and imposes a TDD sales tax, this tax would constitute additional economic activity, fifty percent of which would be captured by the TIF unless the TIF agrees to forego the TDD revenue.
What is the difference between a TDD and Transportation Corporation (TC)?
Transportation Development Districts and Transportation Corporations have many differences. A TDD is formed as a political subdivision, while a TC is a not-for-profit entity with no stockholders. Both a TDD and a TC can issue bonds but only a TDD can levy taxes in order to repay the bonds. While a TC is formed through a vote by the MHTC following a public hearing, a TDD is formed by qualified voter approval after petitioning the circuit court.
184.108.40.206 Steps To Forming A Transportation Development District (TDD)
220.127.116.11.1 Step 1 - File a Petition With the Circuit Court
The petition can be filed in any county partially or totally within the proposed district by:
- At least 50 registered voters from each county within the proposed district, or
- the governing body of any local transportation authority within any county where the proposed project is to be located,
- all of the property owners within the proposed district, if no district residents are eligible to be registered voters, or
- two or more local transportation authorities adopting resolutions to form a district and then one authority may file.
The petition must contain:
- The name, voting residence and county of residence of each individual petitioner, or
- If no persons eligible to be registered voters reside in the district, the name and address of each owner of real property located within the proposed district, or
- The petitioner is the governing body of a local transportation authority and acting in official capacity or the name of each local transportation authority within the proposed district with the supporting resolutions attached.
- The name and address of the Missouri Highways and Transportation Commission (MHTC) and each affected local transportation authority within the proposed district (the respondents), unless already listed as a petitioner.
- A specific description of the proposed boundaries including a map of the district.
- A general description of each proposed project, including the location.
- The proposed district's name.
- The number of board of directors.
- The terms of office for the initial board will be staggered in equal numbers to expire in one, two or three years, unless the petitioners are two or more local transportation authorities.
- A request that the question be submitted to the voters within the proposed district whether to establish the district to develop certain project(s), if the petition was filed by registered voters or by a governing body.
- A proposal for funding the district and a request that the proposal be submitted to the proposed district's qualified voters and,
- A statement that the proposed district will not be an undue burden on any owner of property within the district and is not unjust or unreasonable.
The District Shall Be Contiguous – When…
- The district area must be contiguous and may consist of all or a portion of one or more municipalities and counties.
- Properties within the district area that are separated by public streets, easements or right of way are considered contiguous.
- If property owners are forming the district, the district will be considered contiguous if the only funding is a sales tax; each parcel within the district is within five miles of every other parcel; and, all of the district property will benefit from the transportation project.
- If two or more local transportation authorities are forming the district, property separated or connected by public streets, easements or rights of way are considered contiguous.
18.104.22.168.2 Step 2 - Hearing on Petition
- Within 30 days after filing the petition, the circuit court clerk will deliver the petition to the respondents.
- Respondents have 30 days to reply, either agreeing or opposing the creation of the district.
- If the court does not receive a timely response, it can certify the election without a hearing.
- If opposing the district, the respondent must indicate the following:
- Why the petition was defective.
- Why the district is illegal or unconstitutional.
- Why the funding is illegal or unconstitutional.
- Ask the court for a declaratory judgment.
- Each petitioner and respondent will receive a copy of each respondent’s answer.
- The circuit clerk will publish notice of the intent to form the district and its funding methods in a local general circulation newspaper, once a week for four consecutive weeks, if the petition was filed by registered voters or by a governing body. The notice may include the time and place of a public hearing and must contain wording as proposed in Section 238.212, RSMo.
- Court will hear the case without a jury and declare its judgment.
- If the petition was filed by registered voters or by a governing body and if the court's judgment favors the creation of the district, the court will certify the questions of district creation, project development and funding for voter approval. To certify the questions will require more than one election.
- If all the proposed district’s property owners filed the petition and if the court's judgment favors the creation of the district, the court will declare the district organized and certify the funding methods for qualified voter approval.
- If two or more local transportation authorities filed the petition, the court will certify one question for voter approval in regard to district creation, project development and funding, if the funding mechanism is a sales tax. To certify the one question will require only one election.
- The court's judgment can be appealed by anyone having filed an answer or petition, in the same manner as for other circuit court appeals.
22.214.171.124.3 Step 3 – Election, Vote on Projects and Funding
If the court certifies the petition for voter approval, the district formation will be placed as a ballot issue on the next regularly scheduled election day during which each affected county is holding an election or meet the requirements for a mail-in election found in Section 238.216, RSMo. Each qualified voter (registered voters or, if none, property owners) shall have one vote. The ballot issue will:
- Identify the projects and funding methods.
- Require the voters to approve or disapprove of each project and funding method.
- Must receive a majority of the votes to pass.
- Contain language similar to Section 238.215 , RSMo.
If the issue fails, it cannot be resubmitted to the voters for two years. Expenses for the certification are the responsibility of the petitioners, but are reimbursable from the TDD revenues, if the ballot issue passes.
126.96.36.199.4 Step 4 – Election, Board of Directors
If the formation of the district is approved and if registered voters reside within the district, an election will be held to elect the board of directors, as follows:
- An interested person must petition the circuit court for an election.
- The court orders the county clerk to hold an election in the district's area within 120 days after the district is established.
- The board must contain from 5 to 15 members.
- Directors will be elected at large.
- Terms will be based on number of votes, with initial terms staggered from one to three years (Successor directors will serve three-year terms).
- Candidates for the board of directors must pay $5 and file a statement under oath with the county that the candidate possesses the following qualifications:
- Must be a resident of the district
- Must be a registered voter
- Must be at least 21 years of age
If the formation of the district is approved and if no registered voters reside within the district, an election will be held to elect the board of directors, as follows:
- Within 30 days of certifying the district formation, the circuit clerk will publish a district property owner meeting notice in a local general circulation newspaper for two consecutive weeks, once per week, the last publication occurring at least ten days prior to the date established for the meeting.
- A chairman and secretary elected by the property owners/representatives for the special meeting will conduct board election.
- The board will be composed of property owners or their representatives.
- The board must contain from 5 to 15 members.
- Directors must be at least 21 years of age.
- The number of votes available to property owners/representatives is based on the number of acres of property owned within the district.
- Initial directors' terms will be three, two or one year(s) duration, based respectively on the number of votes received, from highest to lowest count. The terms will be divided among board members, assigned to individual members based on their vote count placement, in increments of one-third of the total members.
- Successors will be elected in the same manner as the initial board and will serve three-year terms.
- The MHTC will appoint advisors to the board, who have no vote but can attend all meetings whether open or closed.
- Any county within the district may also appoint a non-voting advisor to the board.
If the petitioners were multiple local transportation authorities, the boards of directors are determined in the following manner:
- If there are four or more local transportation authorities in the district, each local transportation authority presiding officer will be on the board.
- If there are two to three local transportation authorities in the district, the board will consist of the local transportation authority presiding officer and one person appointed by each of the local transportation authorities.
- Each director shall by at least 21 years old and either a resident or property owner of the local transportation authority.
188.8.131.52.5 Step 5 - Duties of the Board
- The board must meet within 30 days after the election or selection of the directors.
- The court, either upon petition or on its own, will designate the time and place of the first meeting.
- The board will elect a chairman at the first meeting from among its members.
- The board will also appoint an executive director, district secretary, treasurer and other officers/employees as necessary; adopt a fiscal year and adopt a corporate seal.
- A quorum is a simple majority and can act in the name of the board.
- Directors may be reimbursed for actual expenditures in performance of district duties.
184.108.40.206.6 Step 6 - Project Approval
Preliminary plans and specifications must be submitted and approved prior to MoDOT entering into an agreement for the project.
MoDOT considers preliminary plans and specifications to show preliminary geometric details and included design criteria, proposed alignment, profile, tentative grade, tentative right of way, schematic intersection or interchange layouts, bypasses and pertinent topographic features. Detail plans are developed from these preliminary plans. 235 Preliminary Plans addresses preliminary design.
While the process proceeds more smoothly for all parties when plans and specifications are submitted at this point, when special circumstances require it, waivers to the requirement can be requested.
- The MHTC must approve project plans and specifications at a MHTC meeting before any construction or funding may begin, unless the MHTC determines it has no interest in the project. If the MHTC approves the project, the district and the commission must enter into a mutually satisfactory agreement regarding the development and future maintenance of the project.
- Once approved, any subsequent changes to the plans and specifications must have prior Commission approval.
220.127.116.11.7 Step 7 - Project Financing
The district has the authority to finance the project through the following mechanisms.
- Special Assessments:
- Must either be approved by a majority vote of district voters, if any, or by the district property owners, who will indicate their approval by signing a special assessment petition.
- There may be one or more assessments, which must apply to project improvements that specially benefit district properties.
- The ballot issue must be similar to the language stated in Section 238.230, RSMo.
- The petition must be similar in form to Section 238.230, RSMo.
- If the proposal fails, the district may delete the portion of the project to be financed from the assessment, following commission or authority approval.
- Special assessments will be collected by the county collector of each district county, business license taxes will be collected by the city treasurer of the city in which the district is located and both amounts collected for the previous month will be forwarded to the district treasurer, less the collector's commission (not to exceed one percent of the total amount collected), by the fifteenth day of the month following collection. The treasurer shall deposit appropriately and issue a receipt to the collector. They will reconcile their books at least once a year. As an alternative, the district may elect to collect their own revenues.
- Property Taxes:
- Must be approved by four-sevenths of the qualified voters voting on the question within the district.
- May not exceed an annual rate of ten cents per one hundred dollars assessed valuation.
- The district may impose a tax lower than approved by the voters and increase later without voter approval.
- The imposed tax must be uniform within the district.
- The ballot issue must be similar to the language stated in Section 238.232, RSMo.
- Property taxes will be collected by the county collector of each district county and forwarded to the district treasurer, less the collector's commission (not to exceed one percent of the total), by the fifteenth day of the month following collection. The treasurer shall deposit appropriately and issue a receipt to the collector. The collector and treasurer will reconcile their books at least once a year. As an alternative, the district may elect to collect their revenues.
- Sales Tax
- The sales tax is on all retail sales made in the district subject to taxation, with the exclusion of motor vehicles, trailers, boats, outboard motors and utilities.
- The sales tax must be approved by a majority of district qualified voters voting in a general, primary or special election.
- The ballot issue must be similar to the language in Section 238.235, RSMo.
- The sales tax is effective on the first day of the month following adoption of the tax.
- Based on brackets established by the transportation district, the tax shall be collected by the district retailers
- Sales tax proceeds will be deposited into a special trust fund and used only for the project purposes and can be invested by the board, when not needed for current expenditures.
- The sales tax rate can be one-eighth of one percent, one-fourth of one percent, threeeighths of one percent, one-half of one percent or one percent on the receipts from the sale at retail of all tangible personal property or taxable services at retail, excluding items previously mentioned in item number1 and exemptions pursuant to 144.010 and 144.525, RSMo (agencies of government, organizations, etc.).
- All TDD sales tax rates must be uniform within the district.
- The tax will be reported, returned to, and collected by the district.
- All applicable confidentiality provisions, discounts for collection and payment of, penalties for violation, and exemptions apply to the collection of the TDD tax, (per sections of the Revised Statutes of Missouri as identified in the TDD Act).
- No additional permit or exemption or retail certificate is required, unless prescribed by the Secretary of State's Office.
- All retail sales, except motor vehicles, are viewed as occurring at the retailer's place of business, unless the property is delivered to an out-of-state destination. If the retailer has more than one place of business, the sale will be viewed as occurring where the initial order is taken.
- Taxes collected by the district will be deposited in a special fund and expended for the purposes authorized. Accurate records will be kept and made available to district officers and the general public.
- The repeal or amendment of a sales tax can be initiated by 10 percent of the qualified voters signing a petition to that effect and presenting it to the district board.
- If the repeal will not impair the district's ability to repay debt or borrowings related to the project, a vote will be taken of the qualified voters and pass with a majority.
- Toll Roads
- Tolls or fees must be approved by a majority of the qualified district voters voting on the question.
- Fees may vary depending on the users and the nature of the use.
- The ballot issue is similar to the language contained in Section 238.237 , RSMo.
- Tolls on existing state highways and roads require relocation of the highways or roads, subject to commission/authority approval.
- An existing free public highway, road or street cannot be incorporated into a district project and be subject to tolls.
- Debt Financing
- A district may contract and incur liabilities.
- A district may lease or lease/purchase.
- A district may borrow money at interest rates the district determines.
- A district may issue bonds, notes or other obligations and secure the obligations.
- Bonds will be issued as follows:
- - Principal will be payable out of the district revenues.
- - Bonds can be subordinated to previous bonds.
- - Issuance requires a resolution of the district.
- - Maturities set, must be 40 years or less.
- - The district may determine public or private sale, interest rates and bond price.
- - Bonds may be refunded.
- - Refunding bonds may not exceed the amount needed to refund outstanding district bonds, including unpaid interest, premiums, commissions, service fees and other necessary expenses.
- - Refunding bonds may be issued regardless of whether the bonds being refunded were issued in connection with the same project or a separate project, differences in due dates or differences in whether bonds were serial or otherwise.
- - The MHTC may issue bonds for the district or assist the district in its issuance, if the project is to be merged into the state system.
- - The local transportation authority may issue bonds for the district or assist the district in its issuance, if the project is to be merged into a local system.
- - Bonds issued under the authority of the TDD Act are solely the responsibility of the district and are exempt from Missouri taxation, excluding state estate tax.
18.104.22.168.8 Step 8 - Purchases and Access Control of Property
Subject to Commission approval, a district may:
- Purchase, receive donations of or receive cash for right of way.
- Limit and control access from adjacent property to a district property.
- Sell and convey excess right of way at fair market value to any person or entity.
22.214.171.124.9 Step 9 - Condemnation and Relocation
- With prior condemnation approval of MHTC or the local transportation authority, the district may condemn lands for a project in the name of the state of Missouri pursuant to Chapter 523, RSMo.
- Upon notice to the landowner, the district may survey the property for the most advantageous route and design.
- If relocation becomes necessary, the district will provide relocation assistance and make relocation payments to the displaced individuals and follow procedures established by the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended.
126.96.36.199.10 Step 10 - Increasing or Decreasing the Number of Projects
- A district may increase the number of projects by submitting the question to the district voters.
- A district may decrease the number of projects by first obtaining MHTC approval and then submit the questions to the voters.
188.8.131.52.11 Step 11 - Property Conveyed to District by the State
Right of way or other easement necessary for the project development may be granted or conveyed to the district by an act of the general assembly, the MHTC or local authority.
184.108.40.206.12 Step 12 - Regulation of Projects
- For purposes of law enforcement, projects will be treated as parts of the system to which they will be transferred, either as commission highways or streets of the local transportation authority.
- State laws pertaining to maintaining, signing, damaging and obstructing roads shall apply to the district projects. Powers for enforcement are vested in the district engineer or other designated employee.
- For outdoor advertising or junkyard control purposes, a project may be designated as part of the commission highway system or the local transportation authority system.
220.127.116.11.13 Step 13 – Audits
The state auditor shall audit the district at least once every three years. The district is responsible for the audit costs.
18.104.22.168.14 Step 14 - Transfer of Projects to the Commission or Authority and Abolishment of the District
- Within six months following final payment of development and initial maintenance costs, ownership and control of the project will be transferred to the MHTC or the local transportation authority, by contract, which will assume responsibility for future maintenance costs.
- Following the transfer or if the district is unable to complete the project, the district board must submit to voters the question of whether to abolish the district. Prior to the election, the state auditor will audit the district to ensure it can legally dissolve, i.e. has no outstanding claims or actions pending against it, liabilities do not exceed assets or it is not insolvent, in receivership or under the jurisdiction of the bankruptcy court. The ballot question should contain the relevant language contained in the TDD Act.
- If the abolishment question is passed, the district board will:
- - Sell any property it wishes and then transfer the remaining property and revenues to the MHTC or the local transportation authority assuming maintenance and control of the project.
- - Hold a public meeting to announce that the district has been abolished effective that date.
- - File copies of the resolution with the Secretary of State, the Director of Revenue, the Commission and each local transportation authority affected by the district.
141.3.2 Transportation Corporations (TCs)
The transportation corporation formation process can occur concurrently with other innovative finance processes; however, incorporation must occur prior to entering into a financing agreement with the Missouri Highways and Transportation Commission (MHTC).
This is an abbreviation of the information contained within the Missouri Transportation Corporation Act. For full details on transportation corporations, refer to Chapter 238, RSMo (Sections 238.300 to 238.367).
22.214.171.124 Purpose and Powers of a Transportation Corporation
Transportation corporations can:
- Promote and develop public transportation facilities and systems and economic development in Missouri by new and alternative means.
- Perform many functions normally undertaken by the MHTC and its staff.
- Secure and obtain right of way and assist in the planning and design of transportation systems.
- Limit and secure access to a project.
- Sell and convey excess right of way at fair market value.
- Request the MHTC to act on its behalf for condemnation of land.
- Perform activities and hold property for purely civic, social welfare, and charitable purposes and are, therefore, property and income tax exempt.
- Use any lawful funding method for a project, including tax-exempt revenue bonds, notes, fees for services provided, tolls and rent for project construction, operation and/or maintenance. (For toll facility projects, an existing highway/street/road may be relocated and subject to approval by appropriate authorities.) Revenues can be deposited with the MHTC by contract.
- Contract with:
- - Federal agencies, states or their agencies, political subdivisions, MHTC, transportation authorities, corporations, partnerships or individuals regarding funding, promotion, planning, designing, constructing, improving, maintaining, operating or assisting in a project;
- - MHTC to transfer the project to the commission; and,
- - A person, corporation, transportation authority, the MHTC, the state or a federal agency for jointly paying the cost of a project.
- Sue and be sued in its own name.
- Fix compensation of its employees and contractors and disburse funds for its activities.
- Advertise and let construction contracts in the same manner as the letting of public works contracts by MoDOT.
- Purchase, lease, lease-purchase, or receive gifts and grants of any real or personal property necessary for its activities.
- Purchase insurance.
- Exercise powers necessary for the corporation to accomplish its purposes within its powers.
- Indemnify any current or former director or employee for claims against him/her in the absence of negligence, misconduct or omission.
126.96.36.199 Frequently Asked Questions about TCs
What is a Transportation Corporation?
A Transportation Corporation (TC) is a not-for-profit entity formed with the purpose of developing and promoting a major transportation project. The TC acts in promoting the transportation project and promotes economic development in the state and will not act as the agent of any private interests. A TC is formed to facilitate the funding, promotion, planning, design, construction, maintenance and operation of a transportation project. The TC is a nonmember, non-stock corporation.
How does a TC form?
A TC is formed by at least three registered Missouri voters, each of whom is at least 21 years old, filing a Partnership Development application with MoDOT. The application must include a proposed financial plan, preliminary plans and specification for a project and request that the Missouri Highways and Transportation Commission (MHTC) authorize the creation of a TC to act within a certain designated area.
The formation process involves:
- Submit an application to MoDOT to form a TC using MoDOT’s alternative funding application. – A Conceptual Study or Plan is required to meet the preliminary plan requirements in the state statutes, which includes the project purpose and need explanation and stating what conditions (safety, congestion, access, bike/pedestrian, roadway, bridge, etc.) will be addressed with the project solution or concept. 128 Conceptual Studies addresses conceptual studies for most projects. If there is a possibility of a significant environmental impact with the project, then an environmental assessment or environmental impact statement document is required. 126 Location Study and Alternatives Analysis defines the requirements of these documents.
- At the first MHTC meeting following receipt of a complete application, the MHTC will order a local public hearing.
- Notice and content of the public hearing should be coordinated with the appropriate MoDOT district office. Each county, city, town and village in which the project is located must be notified of the request for the project authorization.
- At a subsequent MHTC meeting, applicants must submit the results of the public hearing. The applicants may make a presentation regarding the project, but it is not required. If the MHTC finds the project will improve the state highway and transportation system and the financing plan is feasible, the MHTC may approve the project.
- Preliminary plans and specifications must be submitted and approved prior to MoDOT entering into an agreement for the project. MoDOT considers preliminary plans and specifications to show preliminary geometric details, included design criteria, proposed alignment, profile, tentative grade, tentative right-of-way, schematic intersection or interchange layouts, bypasses and pertinent topographic features. Detail plans are developed from these preliminary plans. The MHTC will take the following actions at this or a subsequent meeting:
- - Approve the corporation’s articles of incorporation,
- - Appoint the board of directors,
- - Appoint one or more non-voting advisors to the board,
- - Approve the corporation’s bylaws (may be subsequent), and
- - Approve the final financing plan (may be subsequent) and final construction plans and specifications. (No project construction can begin until the financing and construction plans and specifications have received Commission approval).
- First Corporation Board Meeting– The corporation board should convene, elect a chairman, appoint an executive director, secretary, treasurer and other officers as needed and adopt the bylaws.
How are the Board Members elected/appointed?
The board of directors, which can consist of any number of directors but not less than six, is established through appointment by the MHTC, for a term no longer than six years. The terms will be staggered in length, so that not more than one-third of the terms will expire in a given year. No person who owns land adjacent to the project shall serve on the board. The Commission will appoint one or more advisors to the board, who have no vote but have the authority to participate in all board meetings and discussions, either open or closed, and have access to all records of the corporation and its board of directors.
How can a TC help fund a project?
A TC may help fund a project by using any lawful funding method for a project, including imposing fees for services provided, charging and collecting tolls, issue tax-exempt bonds, and notes; however they are not authorized to collect taxes. The TC carries with it property tax abatement.
Why do people choose to form a TC?
A TC is formed in order to facilitate specific transportation related projects in the state of Missouri and assist in economic development in Missouri. As an organization, they assist the MHTC to plan, finance and construct a transportation project.
What is the role of MoDOT in a TC?
The MHTC is authorized to adopt reasonable administrative rules regarding TCs and has developed administrative guidelines for MoDOT’s district offices.
188.8.131.52 Steps To Forming a Transportation Corporation (TC)
184.108.40.206.1 Step 1 - Submit an application to MHTC to form TC
Three or more Missouri registered voters, at least 21 years of age, should submit a partnership development application to MoDOT. The information provided in the application will satisfy the statutory requirement for preliminary plans and specifications and a preliminary financing plan.
220.127.116.11.2 Step 2 - First Commission Meeting Following Receipt of Application (Approximately two months later)
If the application is complete, the MHTC will order a local public hearing and publication of a notice that the commission is considering authorizing the proposed project and the incorporation of a transportation corporation at a regular meeting.
18.104.22.168.3 Step 3 - Public Hearing and Notices (Approximately two months to complete)
Notice of the public hearing should be developed in conjunction with the appropriate MoDOT district office. The notice must comply with the following criteria:
- Be published in a newspaper in the county or counties in which the project is proposed to be located.
- Be published in a newspaper that has a general circulation of at least once a week.
- Be published four consecutive weeks, with the last publication at least 15 days prior to the date of the hearing.
- Specify the time, date and place of the hearing.
- Hearing notice must be given to all owners of property to be included within the project limits, at least 15 days prior to the hearing.
Each county, city, town and village in which the project is located must be notified of the request for the project authorization. They are entitled to review the application that gives a general description of the project. Their approval is a prerequisite for MHTC approval.
22.214.171.124.4 Step 4 - Second Commission Meeting (Approximately two months later)
Applicant submits the results of the public hearing to MoDOT, which will be considered at a regular Commission meeting. The applicants may make a presentation regarding the project to the MHTC at this meeting, but it is not required. If the MHTC finds that the project will improve the state highway and transportation system and the financing plan is feasible, the MHTC may approve the project, subject to the corporation making any revisions in the plans and specifications required by the Commission and entering into an agreement with the Commission regarding the development and future maintenance of the project.
The commission will take the following actions:
- Approve the corporation's articles of incorporation, which shall include:
- - The corporation's purpose, project description, scope, area and funding sources.
- - A statement that the corporation is non-stock and has no members.
- - A statement that the MHTC has authorized the corporation, has approved the articles of incorporation and the date of the authorization.
- - Additional information required under Chapter 355 RSMo, the Missouri Not for Profit Corporation Act.
- Appoint the board of directors, with the following requirements:
- - No fewer than six.
- - Terms will be staggered and last no longer than six years, with no more than one-third of the terms expiring in the same year.
- - No board member can own land on or adjacent to the location of the proposed project, and
- - The members will serve without compensation.
- Appoint one or more non-voting advisors to the board (typically, the MoDOT director and the district engineer.)
- Approve the corporation's bylaws, when available.
- Approve the final financing plan, when available.
Following this meeting, the articles of incorporation should be filed with the Secretary of State's Office. No project construction can begin until the financing and construction plans and specifications have received Commission approval.
126.96.36.199.5 Step 5 - First Corporation Board Meeting
The corporation board should convene, elect a chairman from among the board of directors, appoint an executive chairman, secretary, treasurer and other officers as needed, and adopt bylaws.
188.8.131.52.6 Step 6 - Approval of Articles, Bylaws, Finance Plan, Project and Project Plans
Preliminary plans and specifications must be submitted and approved prior to MoDOT entering into an agreement for the project.
MoDOT considers preliminary plans and specifications to show preliminary geometric details, and included design criteria, proposed alignment, profile, tentative grade, tentative right of way, schematic intersection or interchange layouts, bypasses and pertinent topographic features. Detail plans are developed from these preliminary plans. Refer to 235 Preliminary Plans for more information.
While the process proceeds more smoothly for all parties when plans and specifications are submitted at this point, when special circumstances require it, waivers to the requirement can be requested.
The Commission or its representative prior to implementation must approve all changes to corporation articles of incorporation, bylaws, finance plan, and project plans. A Corporation project will be treated as a commission highway for purposes of law enforcement. All state laws pertaining to maintaining, signing, damaging, and obstructing roads will apply to the corporation project, with responsibility given to the corporation engineer or employee identified by the board.
184.108.40.206.7 Step 7 - Project Title Transfer, Corporation Dissolution
Upon project completion and payment of all related costs, title to the project will be transferred to the MHTC. All remaining assets will be liquidated and deposited in the State Road Fund. The board will then dissolve the corporation as per Sections 238.300 to 238.360 and Chapter 355, RSMo, with MHTC's prior approval.
To complete dissolution, the following must occur:
- Articles of dissolution will be executed in triplicate by the corporation by its president and attested to by the secretary.
- Triplicate originals must be delivered to the Secretary of State
- The Secretary of State will stamp each original "filed" with the month, day and year of the filing.
- The Secretary of State will file one original in his/her office.
- The Secretary of State will issue two certificates of dissolution and affix them to the remaining originals.
- A certificate of dissolution and an original of the articles of dissolution will be forwarded to the corporation representative and the MHTC.
141.3.3 Community Improvement Districts (CIDs)
A Community Improvement District (CID) is a tool used by communities to form (within a specified area) either a not-for-profit corporation or a political subdivision. CIDs can raise revenue via special assessments and taxes to fund transportation infrastructure improvements.
141.3.4 Neighborhood Improvement Districts
A Neighborhood Improvement District (NID) may be created in an area that seeks to build, maintain or improve transportation (as well as other public) infrastructure. These activities are paid for by special tax assessments levied on property owners in the area in which the improvements are made. Projects funded through a NID must be public in nature and be beneficial to property in the NID. NIDs are authorized by a resolution of the governing body of the municipality in which the NID is proposed.
141.3.5 Tax Increment Financing
Missouri communities can use Tax Increment Financing (TIF) to fund transportation infrastructure as well. TIF is a financing and development tool that allows future real property taxes and other taxes generated by new development to pay for costs of construction of public infrastructure and other improvements.
141.3.6 Economic Development Sales Tax
A relatively new alternative is the Economic Development Sales Tax. This option allows communities to enact a voter-approved tax of up to one-half of one percent tax on retail sales made in the community. These funds can be used for a variety of purposes, including transportation infrastructure.