Any municipality with more than 500 but less than 300,000 inhabitants in St. Louis County is authorized to submit the issue of creating a home equity program within that municipality to the voters. The issue may be started through either an ordinance approved by the governing body or by a petition signed by at least 5% of the registered voters. The City of St. Louis or St. Louis County is authorized to submit the issue of creating a home equity program within any contiguous area included entirely within the municipality or county to the voters. The ballot question, and related ordinance or petition, shall include a description of the area, the name of the proposed program, and the maximum rate of property tax to be levied.

If the program is approved, the governing body shall appoint nine commissioners to administer it. Governing bodies in cities of 500 to 300,000 may serve as the governing board of the equity program or, alternatively, may appoint a five-member governing commission.

Procedures are specified for including a township or ward which had been excluded from the area as approved. The excluded area must be contiguous with the approved area. Procedures are also provided for merging two existing and contiguous home equity programs.

The act specifies the duties and functions of a home equity program commission and the eligibility qualifications for membership in a home equity program. A member must be the owner of a residential property within the program area. An application and registration fee is required. Upon receipt of the fee, the residence is appraised to determine its guaranteed value. If approved, a certificate of participation is then issued. A member can forfeit the registration fee and guarantee and withdraw from the program at any time; the member is then allowed to sell the guaranteed residence in any legal manner.

A member is guaranteed 100% of the difference if the guaranteed value is less than the selling value. Only sales made three years or more after the date the certificate was issued qualify. To be eligible to receive payment, a member must meet certain program guidelines. A member must file a notice of intent to sell with the governing commission and must offer the guaranteed residence for sale according to those guidelines. The governing commission may have the guaranteed residence inspected by a program appraiser. A member shall be eligible to file a notice of intent to claim within ninety days after listing the guaranteed residence if no offer has been received to purchase the property for an amount at least equal to its guaranteed value. A notice of intent to claim must be filed with the governing commission, and the member must provide verifiable evidence of the actual sale. No payments can be made until the sale has closed and title has passed or the beneficial interest has been transferred.

The act also specifies procedures for situations in which the guaranteed residence is acquired through the use of eminent domain.

A new program appraisal can be obtained in order to establish a new certificate of participation. An increase in the guaranteed value due only to inflation cannot be made until after three years from the most recent registration date. A new guaranteed value due to home improvements can only be made if the improvements exceed $5,000.

Certain decisions by the governing commission can be appealed by the members. In addition, a written request for arbitration may be made.

A guarantee fund must be established for each home equity program to be used for payments to members and for administrative costs. Revenue for a guarantee fund comes from an annual property tax levy, with the rate not to exceed .15% of the equalized assessed valuation of all real property in the area of the program. An independent audit of a guarantee fund is required annually.

A home equity program may only be terminated by the approval of the governing body of the city or county. The balance of the guarantee fund, if any, shall be refunded to the current property taxpayers of all real property in that area.

A program provides a guarantee only against specifically local adverse housing market conditions, as opposed to regional or national conditions. Economic forces such as recession or depression are excluded from the guarantee. Temporary suspension of a program is authorized.

If a guarantee fund becomes depleted, the commission may temporarily suspend the registration of new members and borrow funds against future tax revenues. Program indebtedness or obligations cannot become obligations of the municipality or of the state of Missouri.

The act specifies that commissioners, officers and employees have no personal liability. No cause of action for damages may be brought unless the act or omission involves willful or wanton conduct. Indemnification is authorized for program-related legal costs except for willful or wanton conduct, breach of good faith, intentional misconduct, knowing violation of the law, or when the individual derives an improper personal benefit. Any legal action brought under the provisions of this act must be brought within twelve months from the date of the event which is the subject of the legal action.

The act allows non-township counties to charge penalties on the remaining amount of real or personal property taxes when a taxpayer fails to make an installment payment as previously agreed.

If a land trust in a first classification charter county conveys property to a Missouri not-for-profit organization which provides or enhance community housing opportunities, the act reduces from two to one the number of appointing authorities necessary to consent to the transfer.

RUSS HEMBREE