Section 16.12 Transportation Development District Act

• Library: Local Government Deskbook (2017 Ed.)

J. (§16.12) Transportation Development District Act

The TDD Act (Missouri Transportation Development District Act), §§ 238.200–238.275, RSMo 2016, provides for cooperation between a locally established TDD (transportation development district) and political subdivisions and the MHTC (Missouri Highways and Transportation Commission) to “fund, promote, plan, design, construct, improve, maintain, and operate one or more” transportation-related improvements or infrastructure. Section 238.205, RSMo 2016; see also § 238.280, RSMo 2016. In particular, the MHTC encourages applications by TDDs for the Missouri Department of Transportation’s Innovative Finance Program for development of approved projects.

To fund proposed projects, TDDs may levy special assessments, or property taxes and sales taxes, subject to approval of voters within the TDD. Sections 238.227–238.236, RSMo 2016. Additionally, TDDs may borrow funds, enter into lease-purchase arrangements, or issue bonds, notes, or similar obligations. Section 238.240.2–.4, RSMo 2016. But in light of IRS determinations regarding tax treatment for bonds issued by special taxing districts controlled by private parties, as in the case of CIDs (discussed in §16.11 above), practitioners are advised to exercise extreme caution if advising a TDD attempting to issue tax-exempt bonds. See IRS Technical Advice Memorandum 127670-12, which is available at:

www.irs.gov/pub/irs-wd/1334038.pdf

TDDs may secure obligations by pledging district property or income. Section 238.240.4. Different subclasses of property may be established within a TDD, and special assessments may be levied at different rates based on the level of benefit that each subclass receives from TDD projects. Section 238.230.5, RSMo 2016.

Formation of a TDD requires a petition to the applicable circuit court by 50 registered voters within the proposed district, by all of the property owners within the...