Gov. Jay Nixon signed legislation on June 29, 2016 to increase the oversight, transparency and accountability of local taxing districts, benefiting taxpayers throughout the state. The Governor joined State Auditor Nicole Galloway in Kansas City to sign two pieces of legislation addressing Transportation Development Districts and Community Improvement Districts.
“When residents vote to improve their community through local taxing districts, they expect these districts to be held accountable and follow the law,” Gov. Nixon said. “This legislation will provide taxpayers additional protection by strengthening the State Auditor’s ability to root out wrongdoing and mismanagement.”
“When there are public investments, there must be public accountability, and that’s what my office does through the audits we conduct,” Auditor Galloway said. “These laws increase transparency, provide greater oversight for public dollars, and help ensure projects fulfill their intended purpose of improving Missouri’s communities.”
Senate Bill 1002 authorizes the Missouri State Auditor to conduct audits of Community Improvement Districts (CIDs) in the same manner as state agencies and without a petition from residents. Currently, the State Auditor is authorized to conduct audits of CIDs that are political subdivisions if the requisite number of residents within the CID submits a petition. For those CIDs that have no residents, the auditor currently has no authority to conduct audits without a request from the Governor. There are at least 360 CIDs in Missouri.
The Governor also signed House Bill 1418, which clarifies the process for Transportation Development Districts (TDD) to file annual financial statements with State Auditor’s Office and the process for penalties if the district fails to comply.
Transportation development districts are separate political subdivisions authorized under Missouri law. Transportation development districts can impose a sales tax in increments of 1/8 percent up to one percent.
Under House Bill 1418, the State Auditor’s Office will notify the Missouri Department of Revenue if a TDD has not filed its annual financial statement. The Department of Revenue will then send a notice to the TDD, directing the TDD to file its statement. If the TDD does not file its statement within the time frame identified, a fine of $500 per day may be imposed on the TDD. Previously, state law authorized these fines, but did not provide a process for their collection. In 2014, approximately 24 percent of TDDs failed to file financial statements on time with the State Auditor’s Office, with 14 percent not filing for six months or more after it was due.