1. Practical Issues Working with Special Taxing Districts
October 9, 2015
Practical Issues Working with Special Taxing Districts
Shannon Creighton Roxsen Koch
Gilmore & Bell, P.C Polsinelli PC
Robert Klahr
Armstrong Teasdale LLP

2. OVERVIEW OF TOOLS Transportation Development Districts (TDDs)
Missouri Transportation Development District Act, §§  RSMo.
Community Improvement Districts (CIDs)
Community Improvement District Act, §§  RSMo.
Neighborhood Improvement Districts (NIDs)
Neighborhood Improvement District Act, §§  RSMo.

3. CID/TDD/NID COMPARISON
CID's
Separate Political Subdivision and Board of Directors
Bonds are not obligations of City/County
Enjoy a broad range of powers
Board is elected or appointed by City/County forming District
Project should be within the boundaries of District
Sales Tax, Property Tax, Special Assessments, Fees Available
TDD's
Separate Political Subdivision and Board of Directors
Bonds are not obligations of City/County
May fund transportation only
Board is elected by property owners or registered voters
Project need not be within the boundaries of District
Sales Tax, Property Tax, Special Assessments, Tolls Available

4. CID/TDD/NID COMPARISON(cont.)
NID's
Are nothing more than a "line on a map"
Bonds are limited general obligations of the City or County (counts against constitutional debt limit)
Limited purpose financing tool
Less flexibility related to special assessments
Project need not be within the boundaries of District
Only Special Assessments may be levied

5. CHOOSING THE RIGHT TOOL
PUBLIC/PRIVATE PARTNERSHIPS
WHAT ARE THE DEVELOPER'S OBJECTIVES/CONSIDERATIONS/CONCERNS?
WHAT ARE THE PUBLIC'S OBJECTIVES/CONSIDERATIONS/CONCERNS?

6. CHOOSING THE RIGHT TOOL(cont.)
FUNDING NEEDS
LEVERAGING THE DISTRICT REVENUES
SINGLE USE VS. COMBINATION WITH OTHER TOOLS

7. TIF AND TDD/CID COMBINATION
OVERLAY
ADVANTAGES
Additional Revenues Captured (with consent of District)
Revenues Captured are not from Existing Taxing Districts
Captured Portion Not Limited to TDD or CID Purposes
TIF DISTRICT

8. FINANCING THE PROJECT - TAX EXEMPT FINANCING – SELECTED FEDERAL TAX ISSUES

9. WHO IS A VALID ISSUER?
General Rule: Interest on debt issued by or "on behalf of" a State or political subdivision of a State may be tax-exempt under the Internal Revenue Code.
A "political subdivision" is an entity that (a) acts for a public purpose and (b) has been delegated a substantial portion of at least 1 of 3 sovereign powers.
Eminent Domain
Taxing Power
Police Power

10. IS THE BOND TAX-EXEMPT?
Interest on state or local bonds is tax-exempt, unless the bond is a "private activity bond."
A bond is a private activity bond if:
More than 10% of Financed Property "Used in a Private Business Use"; AND
More than 10% of Bonds secured or "paid" by private business user or property used in a private business use.
Does the District have a "generally applicable tax"?

11. BANK QUALIFICATION
$10,000,000 of bank qualified debt each calendar year.
Includes debt issued by the political subdivision and any entity issuing debt on behalf of that entity (a subordinate entity).

12. LIFE AFTER THE FINANCING

13. QUESTIONS?