SB 0778 - Fiscal Note

Fiscal Note - SB 0778 - Modifies method of collecting delinquent personal and real property taxes

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3156-05

BILL NO. Truly Agreed To And Finally Passed CCS #2 for HCS for SB 778

SUBJECT: Taxation and Revenue-Property: Personal

TYPE: Original

DATE: May 15, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Total Estimated Net Effect on All State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	(Unknown)	(Unknown)	(Unknown)

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the State Tax Commission and the State Courts Administrator stated the proposal would not affect their agencies administratively. Tax Commission officials noted that there are not very many cases when delinquent personal property taxes are collected five years after they were due.

Using historical data from the last three years, the Randolph County Collector noted that $4,000 to $5,000 per year in taxes, interest and late fees would not have been collected if delinquent personal property taxes had been abated after three years.

Officials of the Boone County Collector noted that they would have to keep records for shorter periods of time; therefore, there would be a savings starting three years after the effective date of the proposal.

Oversight assumes that there would be cases where political subdivisions would lose taxes, interest, and penalties which would be collectable under current law.

St. Louis City officials assumed, in response to a proposal from last session concerning bidding on property for sale at tax sales, no local fiscal impact.

Officials from Jackson County stated that the requirements in section 141.550, which states that anyone currently delinquent in taxes would be ineligible to bid at a tax sale, would require the county to pre-register potential bidders to determine their eligibility. Officials could not estimate the amount of cost however officials assume cost would be "modest". Officials suggested an establishment of a pre-registration bidding fee to offset administrative cost.

Oversight for the purpose of this fiscal note assumes this proposal only changes procedure, clarifies, and would prohibit potential bidders who own property that is affected by a delinquent tax from bidding on certain sales of real estate under the provisions of section 141.550, RSMo 1994.

Oversight assumes that certain county officials might be required to screen bidders to determine if they owe delinquent taxes; however, any significant cost would not be expected and assume that the counties current level of appropriations would be adequate, not requiring any additional appropriation.

Officials of the Department of Revenue stated the provisions concerning presentation of property tax receipts for registration of motor vehicles and trailers would not have fiscal impact.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
POLITICAL SUBDIVISIONS
Loss - Decreased Delinquent Personal
Property Tax collections	(Unknown)	(Unknown)	(Unknown)
Cost to Certain Counties
Counties would need to screen potential bidders for delinquent taxes on property that they own in the county.

FISCAL IMPACT - Small Business

No direct fiscal effect on small businesses would be expected due to this proposal.

DESCRIPTION

This proposal would:

1) reduce from five years to three the time in which a county collector must institute action on delinquent personal property taxes;

2) restrict the use of redemption contracts on tax foreclosed residential property which has been vacant for at least six months;

3) bar the sale of tax foreclosed property to persons who owe delinquent property taxes on other property with the same county;

4) specify some procedures for sheriff's sales;

5) require any purchaser of real estate at a third offering tax auction to notify any person holding a recorded claim upon real estate purchased and notify the county collector by affidavit that proper notification had been given. Any person holding a recorded claim who received proper notice would have 90 days after notification of the county collector to redeem the property or be DESCRIPTION (continued)

forever barred from redeeming the property; and

6) require persons registering a vehicle or trailer to present a tax receipt for the year that immediately precedes the year the registration is due.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. This legislation would not affect Total State Revenue.

SOURCES OF INFORMATION

Boone County Collector

Howard County Collector

Randolph County Collector

State Courts Administrator

State Tax Commission

Jeanne Jarrett, CPA

Director

May 15, 1998