1. A municipality, after designating a development area, adopting a development plan, and adopting any development project in conformance with the procedures of sections 99.915 to 99.980, may adopt development financing for the development project area selected for any such development project by passing an ordinance. Upon the adoption of the first of any such ordinances, the municipality shall establish, or shall direct the authority to establish, a special allocation fund for the development area.

2. Immediately upon the adoption of a resolution or ordinance adopting development financing for a development project area pursuant to subsection 1 of this section, the county assessor shall determine the total equalized assessed value of all taxable real property within such development project area by adding together the most recently ascertained equalized assessed value of each taxable lot, block, tract, or parcel of real property within such development project area as of the date of the adoption of such resolution or ordinance and shall provide to the clerk of the municipality written certification of such amount as the total initial equalized assessed value of the taxable real property within such development project area.

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3. In each of the twenty-five calendar years following the adoption of an ordinance adopting development financing for a development project area pursuant to subsection 1 of this section unless and until development financing for such development project area is terminated by ordinance of the municipality, the ad valorem taxes, and payments in lieu of taxes, if any, arising from the levies upon taxable real property in such development project area by taxing districts at the tax rates determined in the manner provided in section 99.968 shall be divided as follows:

(1) That portion of taxes, penalties, and interest levied upon each taxable lot, block, tract, or parcel of real property in such development project area which is attributable to the initial equalized assessed value of each such taxable lot, block, tract, or parcel of real property in such development project area as certified by the county assessor in accordance with subsection 2 of this section shall be allocated to and, when collected, shall be paid by the collecting authority to the respective affected taxing districts in the manner required by law in the absence of the adoption of development financing;

(2) Payments in lieu of taxes attributable to the increase in the current equalized assessed valuation of each taxable lot, block, tract, or parcel of real property in the development project area and any applicable penalty and interest over and above the initial equalized assessed value of each such taxable lot, block, tract, or parcel of real property in such development project area as certified by the county assessor in accordance with subsection 2 of this section shall be allocated to and, when collected, shall be paid to the collecting officer of the municipality who shall deposit such payment in lieu of taxes into a separate segregated account for payments in lieu of taxes within the special fund. Payments in lieu of taxes which are due and owing shall constitute a lien against the real property from which such payments in lieu of taxes are derived and shall be collected in the same manner as real property taxes, including the assessment of penalties and interest where applicable. The lien of payments in lieu of taxes may be foreclosed in the same manner as the lien of real property taxes. No part of the current equalized assessed valuation of each taxable lot, block, tract, or parcel of property in any such development project area attributable to any increase above the initial equalized assessed value of each such taxable lot, block, tract, or parcel of real property in such development project area as certified by the county assessor in accordance with subsection 2 of this section shall be used in calculating the general state school aid formula provided for in section 163.031 until development financing for such development project area expires or is terminated in accordance with sections 99.915 to 99.980;

(3) For purposes of this section, “levies upon taxable real property in such development area by taxing districts” shall not include the blind pension fund tax levied under the authority of Section 38(b), Article III, of the Missouri Constitution, the merchants’ and manufacturers’ inventory replacement tax levied under the authority of subsection 2 of § 6, Article X of the Missouri Constitution, the desegregation sales tax, or the conservation taxes.

4. In each of the twenty-five calendar years following the adoption of an ordinance or resolution adopting development financing for a development project area pursuant to subsection 1 of this section unless and until development financing for such development project area is terminated in accordance with sections 99.915 to 99.980, fifty percent of the economic activity taxes from such development project area shall be allocated to, and paid by the collecting officer of any such economic activity tax to, the treasurer or other designated financial officer of the municipality, who shall deposit such funds in a separate segregated account for economic activity taxes within the special allocation fund. Provided however, in any county, the governing body of the county may, by resolution, exclude any portion of any countywide sales tax of such county.

5. In no event shall a municipality collect and deposit economic activity taxes in the special allocation fund unless the developing project has been approved for state supplemental downtown development financing pursuant to section 99.960.