Section 7 Chapter 100 Taxable Industrial Revenue Bonds

• Library: Urban Development Subdivisions, and Annexations (2011 Ed.)

So-called "Chapter 100 Bonds" involve a type of financing in which a city uses proceeds from taxable revenue bonds that are typically privately placed with an "end-user" to obtain title to an industrial facility, thus triggering tax-exempt status for the facility so acquired. The city then leases the facility back to the end-user, with lease "payments" used to pay debt service on the bonds. This device, now in wide use in Missouri for facilities with significant capital expenditures in equipment (e.g., electric utilities), provides an effective abatement of property taxes on such personalty, in addition to real property tax abatement. See also StopAquila.org v. City of Peculiar, 208 S.W.3d 895 (Mo. banc 2006) (determining that an electric power generation facility constitutes a "commercial purpose" under Article VI, § 27(b), of the Missouri Constitution...