HB 3237 repeals and reenacts Missouri’s section 94.815 to formalize how tourism-tax receipts are held and spent. The bill requires municipalities to deposit all tourism taxes into a dedicated Tourism Tax Trust Fund, mandates a 75/25 split between an Infrastructure Account and a Tourism Promotion Account, and permits Infrastructure Account dollars to fund construction, operation, and bond retirement for eligible tourism-related infrastructure.
The measure also defines eligible “tourism infrastructure facilities” to explicitly include multipurpose sports and entertainment venues with fewer than 25,000 seats and allows proceeds to be used to issue bonds that may be retired by tourism taxes. If any outstanding bonds or indebtedness exist (the bill references instruments issued prior to or after September 15, 1997), a portion of the 75% must flow into a Debt Retirement Account administered under section 94.820.
The statute keeps a voter-authorization requirement for imposing the tax or dedicating it to debt retirement.
At a Glance
What It Does
The bill requires municipalities to deposit tourism-tax revenues into a dedicated Tourism Tax Trust Fund and allocates 75% to an Infrastructure Account and 25% to a Tourism Promotion Account. It authorizes Infrastructure Account funds to pay for construction, maintenance, operations, and bond-financed projects including certain sports and entertainment venues, and creates a Debt Retirement Account where applicable under section 94.820.
Who It Affects
Municipalities that impose tourism taxes under sections 94.802 and 94.805, public bodies that own or operate sports and entertainment venues, municipal finance officers and bond counsel, tourism marketing organizations, and voters in affected municipalities.
Why It Matters
The bill codifies how tourism-tax revenue can be capitalized and spent, expands eligible capital projects to include multipurpose venues and indoor sports facilities, and ties debt repayment rules to an existing statutory framework (section 94.820). That changes municipal capital-planning options and the structure of voter-approved tourism-financed debt.
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What This Bill Actually Does
HB 3237 replaces the current text of section 94.815 with a single, self-contained scheme for handling tourism-tax proceeds. First, it requires municipalities to place all taxes collected under sections 94.800–94.825 into a separate Tourism Tax Trust Fund and forbids commingling those moneys with other municipal funds.
This creates a ring-fenced pool of revenue dedicated to tourism uses.
Second, the bill prescribes a fixed allocation: 75% of receipts must go into an Infrastructure Account and 25% into a Tourism Promotion Account. Money in the Infrastructure Account can be used, subject to municipal appropriation, for constructing and maintaining a broad set of public infrastructure and tourism-related facilities.
The bill explicitly permits those costs to be funded by issuing bonds and allows bond retirement to be paid from tourism-tax revenues or by retiring previously voter-approved bonded indebtedness.Third, the bill introduces a tailored definition of “tourism infrastructure facilities.” It singles out multipurpose sports and entertainment venues with seating under 25,000 (and their associated parking) as eligible, and lists the kinds of physical components and systems—roofs, foundations, concourses, concession areas, and so on—that qualify. The statute also expressly mentions indoor sports facilities as permissible tourism-promoting structures.Fourth, when there are outstanding bonds or indebtedness tied to the listed infrastructure types (the bill references instruments issued prior to or after September 15, 1997), a portion of the 75% allocation must instead be routed into a Debt Retirement Account within the trust fund; the portion and administration are governed by section 94.820.
Finally, the bill maintains that any municipal ordinance imposing these tourism taxes must be submitted to voters under section 115.123, and if the tax will be used to retire bonds, voters must also authorize those bonds or the retirement of previously approved bonded debt.
The Five Things You Need to Know
The municipality must deposit all tourism taxes into a segregated Tourism Tax Trust Fund and may not commingle those funds with other municipal monies.
Seventy-five percent of receipts must flow into an Infrastructure Account and may be used for construction, maintenance, operations, and bond-financed projects for eligible tourism infrastructure.
The statute defines eligible 'tourism infrastructure facilities' to include multipurpose sports and entertainment venues with seating capacity under 25,000 and their associated parking and systems.
If any outstanding bonds or indebtedness exist (the bill references instruments issued prior to or after September 15, 1997), a portion of the 75% must be placed in a Debt Retirement Account administered under section 94.820.
An ordinance imposing the tourism tax is ineffective unless the municipality submits the tax (and any bond authorization or debt-retirement plan tied to it) to voters at an election permitted under section 115.123.
Section-by-Section Breakdown
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Tourism Tax Trust Fund and non‑commingling requirement
This subsection requires municipalities to deposit all taxes authorized under sections 94.800–94.825 into a distinct Tourism Tax Trust Fund and expressly prohibits commingling with other municipal funds. Practically, that creates an accounting firewall and supports traceability of revenues for auditors, bond counsel, and voters who want assurance that tourism taxes will be spent only for designated tourism purposes.
Infrastructure Account: 75% allocation and permitted uses
Subsection (2) mandates that 75% of collected taxes go into an Infrastructure Account and lists permissible uses: constructing and maintaining tourism infrastructure and infrastructure improvements, covering costs of operation and maintenance, and funding structures, trails, and other tourism-promoting facilities (explicitly including indoor sports facilities). It also authorizes municipalities to issue bonds for these projects and to retire those bonds with tourism-tax revenue—language that formalizes tourism taxes as a revenue stream for capital financing.
Definition of 'tourism infrastructure facilities'—venues under 25,000 seats
This paragraph narrows the statutory definition of eligible facilities to multipurpose sports and entertainment venues with seating capacity fewer than 25,000, owned or operated by a public body and deemed by the municipality to attract events. The listing of specific physical components and systems clarifies that both structural and hospitality/service spaces are eligible, which matters for project scoping, cost allocation, and what elements can be bond‑financed.
Debt Retirement Account trigger and administration
Subsection (3) creates a Debt Retirement Account within the trust fund when there are outstanding bonds or indebtedness 'prior to or after September 15, 1997' tied to construction or maintenance of infrastructure improvements. It requires that a portion of the 75% be diverted to this account and delegates the amount and administration details to section 94.820. For municipal finance officers, this means existing debt can change how current tourism-tax receipts are allocated and may impose preexisting debt‑service priorities on new tax revenue.
Tourism Promotion Account and voter-authorization requirement
Subsection (4) directs 25% of collections into a Tourism Promotion Account to be used for marketing and promotion, establishing an ongoing funding stream for local tourism organizations. Subsection (5) reiterates that the tourism taxes are in addition to other taxes and requires voter approval—under section 115.123—before a municipality can adopt the tax, or before using the tax to retire bonds or previously approved bonded indebtedness, preserving the voter‑authorization safeguard for tax imposition and debt retirement.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Municipal governments — gain a ring‑fenced revenue stream and an explicit statutory route to finance capital projects (including bond issuance) using tourism-tax receipts, which supports larger infrastructure and venue projects without tapping general funds.
- Public venue owners/operators (public bodies) — the bill makes multipurpose sports and entertainment venues under 25,000 seats explicitly eligible for funding, improving prospects for renovation, expansion, or new construction funded by tourism-tax-backed bonds.
- Local tourism promotion organizations — receive a guaranteed 25% allocation for marketing and promotion, giving predictable funding for visitor attraction campaigns and events.
- Contractors and local construction sector — potential increase in publicly financed projects (streets, water/wastewater, venue work) translates into procurement and contracting opportunities tied to tourism-funded capital programs.
Who Bears the Cost
- Municipal taxpayers and visitors — tourism taxes are an additional levy; when used to retire bonds, residents may indirectly shoulder debt service if revenues fall short or if general funds are tapped as a backstop.
- Municipal finance offices and auditors — the trust fund, account segregation, and a Debt Retirement Account add administrative, accounting, and compliance responsibilities that may require new controls and reporting.
- Voters — the statute puts bond and tax authorizations before voters under section 115.123, meaning the electorate bears the political and financial decision to approve tax‑backed debt, with attendant campaign and ballot costs.
- Smaller municipalities without established tourism bases — they may find it difficult to generate sufficient tax receipts to both fund infrastructure debt and sustain marketing, or may be disadvantaged when competing for projects that larger jurisdictions can finance.
Key Issues
The Core Tension
The central tension is between using a growth‑focused, bondable revenue stream to finance long‑lived capital projects (and thereby potentially transform local infrastructure and venues) and preserving those funds for active tourism promotion; the statute empowers municipal financing while simultaneously requiring voter authorization, creating a trade‑off between democratic constraint and fiscal flexibility.
The bill combines a strict ring‑fencing approach (a separate trust fund and account structure) with broad discretion over what qualifies as tourism infrastructure. That combination creates implementation questions: municipalities must establish accounting and monitoring systems to avoid commingling, but the statute gives them latitude to decide whether a venue 'contributes' to tourism, which could invite disputes over eligibility and municipal prioritization.
The Debt Retirement Account language references outstanding bonds or indebtedness 'prior to or after September 15, 1997,' a formulation that reads redundantly and could be ambiguous in practice about which past financings trigger diversion of funds. The bill punts administration and the exact diversion percentage to section 94.820, so a reader must consult that provision to understand the operational impact on current revenue allocations.
Finally, expanding eligible projects to include indoor sports facilities and multipurpose venues increases financing options but raises classic public‑finance tradeoffs: long‑term debt for capital projects can crowd out marketing budgets and expose taxpayers to project revenue risk if promised tourism demand does not materialize.
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