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 COMMITTEE SUBSTITUTE FOR
SENATE BILL NO. 724
101ST GENERAL ASSEMBLY
4303S.02C 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Section A. Section 105.145, RSMo, is repealed and one new 1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 SCS 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 hereinabove 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 state ment to the state 46
auditor shall be subject to a fine of five hundred dollars 47
per day. 48 SCS 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 offic e 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 financi al 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 provisio ns of subsection 9 of this 79 SCS 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 violati ons 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 development 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 su bdivision, 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 statemen t after January 1, 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 no less than ninety 109
percent. 110 SCS SB 724 5
15. The director of revenue shall have the au thority 111
to make a one-time downward adjustment to any outstanding 112
penalty imposed under this section on a political 113
subdivision if the director determines the fine is 114
uncollectable. The director of revenue may prescribe rules 115
and regulations necessar y to carry out the provisions of 116
this subsection. Any rule or portion of a rule, as that 117
term is defined in section 536.010, that is created under 118
the authority delegated in this section shall become 119
effective only if it complies with and is subject t o all of 120
the provisions of chapter 536 and, if applicable, section 121
536.028. This section and chapter 536 are nonseverable, and 122
if any of the powers vested with the general assembly 123
pursuant to chapter 536 to review, to delay the effective 124
date, or to disapprove and annul a rule are subsequently 125
held unconstitutional, then the grant of rulemaking 126
authority and any rule proposed or adopted after August 28, 127
2021, shall be invalid and void. 128
16. If a political subdivision with an outstanding 129
balance for fines or penalties: 130
(1) Fails to file an annual financial statement after 131
August 28, 2021, and before January 1, 2022; or 132
(2) Files an annual financial statement after August 133
28, 2021, and before January 1, 2022, but fails to file any 134
annual financial statement thereafter, 135
then the director of revenue shall initiate the process to 136
disincorporate the political subdivision under subsection 18 137
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 SCS SB 724 6
subsection 2 of this section, the resident may file an 142
affidavit with the director of revenue that attests to the 143
alleged failure. The director of revenue shall e valuate 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 has not complied 147
after thirty days, the director of revenue shall initiate 148
the process to disincorporate the political subdivision 149
under subsection 18 of this section. 150
18. (1) The question of whether a political 151
subdivision subject to possible disincorporation under 152
subsection 16 or 17 of this section shall be disincorporated 153
shall be submitted to the voters of the political 154
subdivision. The election upon the question shall be held 155
on the next general election day. 156
(2) No later than five o'clock p.m. on the tenth 157
Tuesday prior to the election, the director of revenue shall 158
notify the election authorities responsible for conducting 159
the election according to the provisions of section 115.125 160
and the county governing body in which the political 161
subdivision is located. 162
(3) The election authority shall give notic e of the 163
election for eight consecutive weeks prior to the election 164
by publication in a newspaper of general circulation 165
published in the political subdivision or, if there is no 166
such newspaper in the political subdivision, in the 167
newspaper in the cou nty published nearest the political 168
subdivision. 169
(4) Any costs of submitting the question shall be paid 170
by the political subdivision. 171 SCS SB 724 7
(5) The question shall be submitted to the voters of 172
such city, town, or village in substantially the follo wing 173
form: 174
Upon the affirmative vote of a majority of the qualified 181
voters voting on the question, the director of revenue shall 182
file an action to disincorporate the political subdivision 183
in the circuit court with jurisdiction over the political 184
subdivision. 185
19. In an action to disincorporate a political 186
subdivision, the circuit court shall order: 187
(1) The appointment of an administrative authority for 188
the political subdivision, which may be another political 189
subdivision, the state, a qualified private party, or other 190
qualified entity; 191
(2) All financial and other institutions holding funds 192
of the political subdivision, as identified by the director 193
of revenue, to honor the directives of the administrative 194
authority; 195
(3) The director of revenue or other party charged 196
with distributing tax revenue to distribute the revenues and 197
funds of the political subdivision to the administrative 198
authority; and 199
(4) The disincorporation of the political subdivision 200
and the effective date of the disincorporation, taking into 201
consideration a reasonable transition period. 202
175
176
177
178
179
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?
180 □ YES □ NO SCS SB 724 8
The administrative authority shall administer all revenues 203
under the name of the political subdivision or its agents 204
and administer all funds collected on be half of the 205
political subdivision. The administrative authority shall 206
use the revenues and existing funds to pay all debts and 207
obligations of the political subdivision other than the 208
penalties accrued under this section. The circuit court 209
shall have ongoing jurisdiction to enforce its orders and 210
carry out the remedies under this subsection. 211
20. The attorney general shall have the authority to 212
file an action in a court of competent jurisdiction against 213
any political subdivision that fails to comply with the 214
provisions of this section. 215