EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
SECOND REGULAR SESSION
SENATE BILL NO. 724
101ST GENERAL ASSEMBLY
INTRODUCED BY SENATOR HEGEMAN.
4303S.01I ADRIANE D. CROUSE, Secretary
AN ACT
To repeal section 105.145, RSMo, and to enact in lieu thereof one new section relating to financial
statements of political subdivisions, with penalty provisions.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Section 105.145, RSMo, is repealed and one new 1
section enacted in lieu thereof, to be known as section 105.1 45, 2
to read as follows:3
105.145. 1. The following definitions shall be 1
applied to the terms used in this section: 2
(1) "Governing body", the board, body, or persons in 3
which the powers of a political subdivision as a body 4
corporate, or otherwise, are vested; 5
(2) "Political subdivision", any agency or unit of 6
this state, except counties and school districts, which now 7
is, or hereafter shall be, authorized to levy taxes or 8
empowered to cause taxes to be levied. 9
2. The governing body of each political subdivision in 10
the state shall cause to be prepared an annual report of the 11
financial transactions of the political subdivision in such 12
summary form as the state auditor shall prescribe by rule, 13
except that the annual report of p olitical subdivisions 14
whose cash receipts for the reporting period are ten 15
thousand dollars or less shall only be required to contain 16
the cash balance at the beginning of the reporting period, a 17 SB 724 2
summary of cash receipts, a summary of cash disbursements 18
and the cash balance at the end of the reporting period. 19
3. Within such time following the end of the fiscal 20
year as the state auditor shall prescribe by rule, the 21
governing body of each political subdivision shall cause a 22
copy of the annual fin ancial report to be remitted to the 23
state auditor. 24
4. The state auditor shall immediately on receipt of 25
each financial report acknowledge the receipt of the report. 26
5. In any fiscal year no member of the governing body 27
of any political subdi vision of the state shall receive any 28
compensation or payment of expenses after the end of the 29
time within which the financial statement of the political 30
subdivision is required to be filed with the state auditor 31
and until such time as the notice from the state auditor of 32
the filing of the annual financial report for the fiscal 33
year has been received. 34
6. The state auditor shall prepare sample forms for 35
financial reports and shall mail the same to the political 36
subdivisions of the state. Failure of the auditor to supply 37
such forms shall not in any way excuse any person from the 38
performance of any duty imposed by this section. 39
7. All reports or financial statements herein above 40
mentioned shall be considered to be public records. 41
8. The provisions of this section apply to the board 42
of directors of every transportation development district 43
organized under sections 238.200 to 238.275. 44
9. Any political subdivision that fails to timely 45
submit a copy of the annual financial stat ement to the state 46
auditor shall be subject to a fine of five hundred dollars 47
per day. 48 SB 724 3
10. The state auditor shall report any violation of 49
subsection 9 of this section to the department of revenue. 50
Upon notification from the state auditor's offi ce that a 51
political subdivision failed to timely submit a copy of the 52
annual financial statement, the department of revenue shall 53
notify such political subdivision by certified mail that the 54
statement has not been received. Such notice shall clearly 55
set forth the following: 56
(1) The name of the political subdivision; 57
(2) That the political subdivision shall be subject to 58
a fine of five hundred dollars per day if the political 59
subdivision does not submit a copy of the annual financial 60
statement to the state auditor's office within thirty days 61
from the postmarked date stamped on the certified mail 62
envelope; 63
(3) That the fine will be enforced and collected as 64
provided under subsection 11 of this section; and 65
(4) That the fine will begin accruing on the thirty - 66
first day from the postmarked date stamped on the certified 67
mail envelope and will continue to accrue until the state 68
auditor's office receives a copy of the financial statement. 69
In the event a copy of the annual financ ial statement is 70
received within such thirty -day period, no fine shall accrue 71
or be imposed. The state auditor shall report receipt of 72
the financial statement to the department of revenue within 73
ten business days. Failure of the political subdivision to 74
submit the required annual financial statement within such 75
thirty-day period shall cause the fine to be collected as 76
provided under subsection 11 of this section. 77
11. The department of revenue may collect the fine 78
authorized under the provisi ons of subsection 9 of this 79 SB 724 4
section by offsetting any sales or use tax distributions due 80
to the political subdivision. The director of revenue shall 81
retain two percent for the cost of such collection. The 82
remaining revenues collected from such violat ions shall be 83
distributed annually to the schools of the county in the 84
same manner that proceeds for all penalties, forfeitures, 85
and fines collected for any breach of the penal laws of the 86
state are distributed. 87
12. Any [transportation developmen t district organized 88
under sections 238.200 to 238.275 having ] political 89
subdivision that has gross revenues of less than five 90
thousand dollars or that has not levied or collected sales 91
or use taxes in the fiscal year for which the annual 92
financial statement was not timely filed shall not be 93
subject to the fine authorized in this section. 94
13. If a failure to timely submit the annual financial 95
statement is the result of fraud or other illegal conduct by 96
an employee or officer of the political s ubdivision, the 97
political subdivision shall not be subject to a fine 98
authorized under this section if the statement is filed 99
within thirty days of the discovery of the fraud or illegal 100
conduct. If a fine is assessed and paid prior to the filing 101
of the statement, the department of revenue shall refund the 102
fine upon notification from the political subdivision. 103
14. If a political subdivision has an outstanding 104
balance for fines or penalties at the time it files its 105
first annual financial stateme nt after August 28, 2022, the 106
director of revenue shall make a one -time downward 107
adjustment to such outstanding balance in an amount that 108
reduces the outstanding balance by ninety percent. 109
15. The director of revenue shall have the authority 110
to make a one-time downward adjustment to any outstanding 111 SB 724 5
penalty imposed under this section on a political 112
subdivision if the director determines the fine is 113
uncollectable. The director of revenue may prescribe rules 114
and regulations necessary to carry ou t the provisions of 115
this subsection. Any rule or portion of a rule, as that 116
term is defined in section 536.010, that is created under 117
the authority delegated in this section shall become 118
effective only if it complies with and is subject to all of 119
the provisions of chapter 536 and, if applicable, section 120
536.028. This section and chapter 536 are nonseverable, and 121
if any of the powers vested with the general assembly 122
pursuant to chapter 536 to review, to delay the effective 123
date, or to disapprove a nd annul a rule are subsequently 124
held unconstitutional, then the grant of rulemaking 125
authority and any rule proposed or adopted after August 28, 126
2022, shall be invalid and void. 127
16. If a political subdivision with an outstanding 128
balance for fines or penalties: 129
(1) Fails to file an annual financial statement after 130
August 28, 2022, and before January 31, 2023; or 131
(2) Files an annual financial statement after August 132
28, 2022, and before January 31, 2023, but fails to file any 133
annual financial statement thereafter, 134
then the director of revenue shall notify the attorney 135
general, and the attorney general shall initiate the process 136
to disincorporate the political subdivision under subsection 137
18 of this section. 138
17. If any resident of a political subdivision 139
believes or knows that the political subdivision has failed 140
to file the annual financial report required under 141
subsection 2 of this section, the resident may file an 142 SB 724 6
affidavit with the attorney general that attests to the 143
alleged failure. The attorney general shall evaluate the 144
allegation and, if true, notify the political subdivision 145
that it has thirty days to comply with subsection 2 of this 146
section. If the political subdivision still has not 147
complied after thirty day s, the attorney general shall 148
initiate the process to disincorporate the political 149
subdivision under subsection 18 of this section. 150
18. (1) The question of whether a political 151
subdivision subject to possible dissolution under subsection 152
16 or 17 of this section shall be disincorporated shall be 153
submitted to the voters of the political subdivision at the 154
next general election. 155
(2) No later than 5:00 p.m. on the tenth Tuesday prior 156
to the election, the attorney general shall notify the 157
election authorities responsible for conducting the election 158
according to the provisions of section 115.125 and the 159
county governing body in which the political subdivision is 160
located. 161
(3) The election authority shall give notice of the 162
election for eight consecutive weeks prior to the election 163
by publication in a newspaper of general circulation 164
published in the political subdivision or, if there is no 165
such newspaper in the political subdivision, in the 166
newspaper in the county published nearest the political 167
subdivision. 168
(4) Any costs of submitting the question shall be paid 169
by the political subdivision. 170
(5) The question shall be submitted to the voters of 171
such city, town, or village in substantially the following 172
form: 173 SB 724 7
Upon the affirmative vote of a majority of the qualified 180
voters voting on the question, the attorney general shall 181
file an action to disincorporate the political subdivision 182
in the circuit court with jurisdiction over the political 183
subdivision. 184
19. In an action to disincorporate a political 185
subdivision, the circuit court shall order: 186
(1) The appointment of an administrative authority for 187
the political subdivision, which may be another political 188
subdivision, the state, a q ualified private party, or other 189
qualified entity; 190
(2) All financial and other institutions holding funds 191
of the political subdivision, as identified by the attorney 192
general, to honor the directives of the administrative 193
authority; 194
(3) The director of revenue or other party charged 195
with distributing tax revenue, as identified by the attorney 196
general, to distribute the revenues and funds of the 197
political subdivision to the administrative authority; and 198
(4) The dissolution of the poli tical subdivision and 199
the effective date of the dissolution, taking into 200
consideration a reasonable transition period. 201
The administrative authority shall administer all revenues 202
under the name of the political subdivision or its agents 203
and administer all funds collected on behalf of the 204
174
175
176
177
178
The (city/town/village) of __________ (has an
outstanding balance for fines or penalties and)
has failed to file an annual financial statement,
as required by law. Shall the (city/town/village)
of __________ be disincorporated?
179 □ YES □ NO SB 724 8
political subdivision. The administrative authority shall 205
use the revenues and existing funds to pay all debts and 206
obligations of the political subdivision other than the 207
penalties accrued under this section. The circuit court 208
shall have ongoing jurisdiction to enforce its orders and 209
carry out the remedies under this subsection. 210