Special Business District

A Special Business District (SBD) is a separate political subdivision of the state that may impose additional property taxes and business license taxes to fund certain public improvements and services within the district. An SBD may be created by City Council upon receiving a petition requesting the formation of a district.

Authorization

Sections 71.790 through 71.808 RSMo.

Eligible Activities

SBDs may be used to fund the following types of public improvements and services:

Bus stops
Childcare facilities
Convention centers and arenas
Grant permits for private usage of public space

Newsstands
Pushcart vendors
Sidewalk cafes

Landscaping
Lease space for outdoor dining
Maintenance of public property

Sidewalks
Street furniture / landscaping
Streets

Parking facilities
Promote business activity within the district
Public transportation
Security and janitorial personnel
Street furniture
Streets and sidewalks

Financing

With the approval of qualified voters, SBDs may issue general obligation bonds or notes for a maximum of 20 years and in a maximum amount of 10% of the total assessed value of all land within the district. Districts are also authorized to issue revenue bonds to pay for the costs of acquiring, constructing, or improving revenue-producing facilities. However, such bonds shall be repaid only by the revenue-generating facilities.

The following sources of revenue may be used by Special Business Districts located in cities with populations under 350,000 to fund improvements and services and to amortize outstanding bonds:

Property Taxes - may be imposed in an amount not to exceed $0.85 per $100.00 assessed valuation
Business License Taxes - may be imposed in an amount not to exceed 50% of the other business license taxes in the district

Funding Authority

Section 71.798 RSMo. states that the City Council has the sole discretion as to how the revenue derived from any SBD tax or any revenue derived from disposition of assets of the district shall be used within the scope of the SBD purposes. This section also states that the city shall not decrease the level of publicly funded services in the district existing prior to creation of the district or transfer the financial burden of providing the services to the district unless the services at the same time are decreased throughout the city.

Approval Process

One or more owners of real property subject to real property taxes may petition the City Council to establish, enlarge or decrease the size of a SBD.
The council may then adopt a resolution of intent to establish or change a SBD.
Prior to the establishment of a SBD, the City Council shall conduct a survey and investigation to determine the improvements needed in the proposed district, the approximate cost of land acquisition, the area to be included in the district, the need for special services and other matters related to the establishment of the district.
A written report of the survey must be filed in the office of the City Clerk and be a public record.After proper notice, council may vote to establish the SBD and set the initial rate of levy to be imposed on the property.

Governance

In cities with populations under 350,000 people, the City Council serves as the governing body of the SBD. The City Council also appoints a seven member SBD board that serves as an advisory board to the City Council. In cities with populations greater than 350,000 people, the SBD board is the governing body of the SBD.