4303S.02C
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SENATE COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 724
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Section A. Section 105.145, RSMo, is repealed and one new
section enacted in lieu thereof, to be known as section 105.145,
to read as follows:
105.145. 1. The following definitions shall be
applied to the terms used in this section:
(1) "Governing body", the board, body, or persons in
which the powers of a political subdivision as a body
corporate, or otherwise, are vested;
(2) "Political subdivision", any agency or unit of
this state, except counties and school districts, whic h now
is, or hereafter shall be, authorized to levy taxes or
empowered to cause taxes to be levied.
2. The governing body of each political subdivision in
the state shall cause to be prepared an annual report of the
financial transactions of the political subdivision in such
summary form as the state auditor shall prescribe by rule,
except that the annual report of political subdivisions
whose cash receipts for the reporting period are ten
thousand dollars or less shall only be required to con tain
the cash balance at the beginning of the reporting period, a
summary of cash receipts, a summary of cash disbursements
and the cash balance at the end of the reporting period.
3. Within such time following the end of the fiscal
year as the state auditor shall prescribe by rule, the
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governing body of each political subdivision shall cause a
copy of the annual financial report to be remitted to the
state auditor.
4. The state auditor shall immediately on receipt of
each financial report acknowledge the receipt of the report.
5. In any fiscal year no member of the governing body
of any political subdivision of the state shall receive any
compensation or payment of expenses after the end of the
time within which the financial st atement of the political
subdivision is required to be filed with the state auditor
and until such time as the notice from the state auditor of
the filing of the annual financial report for the fiscal
year has been received.
6. The state auditor shall prepare sample forms for
financial reports and shall mail the same to the political
subdivisions of the state. Failure of the auditor to supply
such forms shall not in any way excuse any person from the
performance of any duty imposed by this se ction.
7. All reports or financial statements hereinabove
mentioned shall be considered to be public records.
8. The provisions of this section apply to the board
of directors of every transportation development district
organized under sect ions 238.200 to 238.275.
9. Any political subdivision that fails to timely
submit a copy of the annual financial statement to the state
auditor shall be subject to a fine of five hundred dollars
per day.
10. The state auditor shall report an y violation of
subsection 9 of this section to the department of revenue.
Upon notification from the state auditor's office that a
political subdivision failed to timely submit a copy of the
annual financial statement, the department of revenue shall
notify such political subdivision by certified mail that the
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statement has not been received. Such notice shall clearly
set forth the following:
(1) The name of the political subdivision;
(2) That the political subdivision shall be subject to
a fine of five hundred dollars per day if the political
subdivision does not submit a copy of the annual financial
statement to the state auditor's office within thirty days
from the postmarked date stamped on the certified mail
envelope;
(3) That the fine will be enforced and collected as
provided under subsection 11 of this section; and
(4) That the fine will begin accruing on the thirty -
first day from the postmarked date stamped on the certified
mail envelope and will continue to a ccrue until the state
auditor's office receives a copy of the financial statement.
In the event a copy of the annual financial statement is
received within such thirty -day period, no fine shall accrue
or be imposed. The state auditor shall report recei pt of
the financial statement to the department of revenue within
ten business days. Failure of the political subdivision to
submit the required annual financial statement within such
thirty-day period shall cause the fine to be collected as
provided under subsection 11 of this section.
11. The department of revenue may collect the fine
authorized under the provisions of subsection 9 of this
section by offsetting any sales or use tax distributions due
to the political subdivision. The director of revenue shall
retain two percent for the cost of such collection. The
remaining revenues collected from such violations shall be
distributed annually to the schools of the county in the
same manner that proceeds for all penalties, forfeitures,
and fines collected for any breach of the penal laws of the
state are distributed.
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12. Any [transportation development district organized
under sections 238.200 to 238.275 having ] political
subdivision that has gross revenues of less than five
thousand dollars or that has not levied or collected sales
or use taxes in the fiscal year for which the annual
financial statement was not timely filed shall not be
subject to the fine authorized in this section.
13. If a failure to timely submit t he annual financial
statement is the result of fraud or other illegal conduct by
an employee or officer of the political subdivision, the
political subdivision shall not be subject to a fine
authorized under this section if the statement is filed
within thirty days of the discovery of the fraud or illegal
conduct. If a fine is assessed and paid prior to the filing
of the statement, the department of revenue shall refund the
fine upon notification from the political subdivision.
14. If a political subdivision has an outstanding
balance for fines or penalties at the time it files its
first annual financial statement after January 1, 2022, the
director of revenue shall make a one -time downward
adjustment to such outstanding balance in an amou nt that
reduces the outstanding balance by no less than ninety
percent.
15. The director of revenue shall have the authority
to make a one-time downward adjustment to any outstanding
penalty imposed under this section on a political
subdivision if the director determines the fine is
uncollectable. The director of revenue may prescribe rules
and regulations necessary to carry out the provisions of
this subsection. Any rule or portion of a rule, as that
term is defined in section 536.010, tha t is created under
the authority delegated in this section shall become
effective only if it complies with and is subject to all of
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the provisions of chapter 536 and, if applicable, section
536.028. This section and chapter 536 are nonseverable, and
if any of the powers vested with the general assembly
pursuant to chapter 536 to review, to delay the effective
date, or to disapprove and annul a rule are subsequently
held unconstitutional, then the grant of rulemaking
authority and any rule proposed or adopted after August 28,
2021, shall be invalid and void.
16. If a political subdivision with an outstanding
balance for fines or penalties:
(1) Fails to file an annual financial statement after
August 28, 2021, and before January 1, 202 2; or
(2) Files an annual financial statement after August
28, 2021, and before January 1, 2022, but fails to file any
annual financial statement thereafter,
then the director of revenue shall initiate the process to
disincorporate the political s ubdivision under subsection 18
of this section.
17. If any resident of a political subdivision
believes or knows that the political subdivision has failed
to file the annual financial report required under
subsection 2 of this section, the reside nt may file an
affidavit with the director of revenue that attests to the
alleged failure. The director of revenue shall evaluate the
allegation and, if true, notify the political subdivision
that it has thirty days to comply with subsection 2 of this
section. If the political subdivision has not complied
after thirty days, the director of revenue shall initiate
the process to disincorporate the political subdivision
under subsection 18 of this section.
18. (1) The question of whether a pol itical
subdivision subject to possible disincorporation under
subsection 16 or 17 of this section shall be disincorporated
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shall be submitted to the voters of the political
subdivision. The election upon the question shall be held
on the next general election day.
(2) No later than five o'clock p.m. on the tenth
Tuesday prior to the election, the director of revenue shall
notify the election authorities responsible for conducting
the election according to the provisions of section 115.125
and the county governing body in which the political
subdivision is located.
(3) The election authority shall give notice of the
election for eight consecutive weeks prior to the election
by publication in a newspaper of general circulation
published in the political subdivision or, if there is no
such newspaper in the political subdivision, in the
newspaper in the county published nearest the political
subdivision.
(4) Any costs of submitting the question shall be paid
by the political subdivision.
(5) The question shall be submitted to the voters of
such city, town, or village in substantially the following
form:
Upon the affirmative vote of a majority of the qualified
voters voting on the question, the director of revenue shall
file an action to disincorporate the political subdivision
in the circuit court with jurisdiction over the political
subdivision.
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?
□ YES □ NO
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19. In an action to disincorporate a political
subdivision, the circuit cour t shall order:
(1) The appointment of an administrative authority for
the political subdivision, which may be another political
subdivision, the state, a qualified private party, or other
qualified entity;
(2) All financial and other institu tions holding funds
of the political subdivision, as identified by the director
of revenue, to honor the directives of the administrative
authority;
(3) The director of revenue or other party charged
with distributing tax revenue to distribute th e revenues and
funds of the political subdivision to the administrative
authority; and
(4) The disincorporation of the political subdivision
and the effective date of the disincorporation, taking into
consideration a reasonable transition period.
The administrative authority shall administer all revenues
under the name of the political subdivision or its agents
and administer all funds collected on behalf of the
political subdivision. The administrative authority shall
use the revenues and ex isting funds to pay all debts and
obligations of the political subdivision other than the
penalties accrued under this section. The circuit court
shall have ongoing jurisdiction to enforce its orders and
carry out the remedies under this subsection.
20. The attorney general shall have the authority to
file an action in a court of competent jurisdiction against
any political subdivision that fails to comply with the
provisions of this section.