HCS HB 730 -- AD VALOREM PROPERTY TAX COLLECTIONS

SPONSOR:  Fitzwater (Leake)

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Education-Elementary and Secondary by a vote of 21 to 1.

Effective July 1, 2000, this substitute revises the school
foundation formula, used to calculate state school aid, to
require a deduction of 98.5% of a district's equalized assessed
valuation, rather than 100%.  Beginning with the November 2000
state aid payment, and every November thereafter, hold-harmless
districts will receive an additional payment of three-fourths of
1% of the district's current year deduction amount in first
class counties and 1.25% in other counties.  A district is
considered to be located in the county in which the largest
portion of its enrollment resides.

Effective January 1, 2000, county collectors' fees are changed.
The categories of dollar amounts collected and classifications
of counties are revised and some fees raised.  The collector's
withholding from property taxes increases to 2.5% in counties
collections less than $2 million; 1.5% for non-first-class
counties collecting more than $2 million; 1% for first class
counties and the city of St. Louis.  A new section is added to
create the tax maintenance fund to fund additional operating
costs from percentages of taxes collected.  County general
revenue may also be directed to the tax maintenance fund.  A
budget base is established.  Counties that become first-class
noncharter counties on or after August 28, 1999, have transition
provisions regarding the amount of their collections.

Amounts going to the assessment fund from taxing authorities
within counties are raised to 5/8% in first and second class
counties and 1 1/4% in third and fourth class counties.  To be
eligible for state cost-share funds, each county must provide
from general revenue the average of the 3 most recent years'
amount provided from general revenue to the assessment fund,
instead of the amount available for assessment in the previous
year.  State reimbursement rates for counties with an assessment
plan are increased; however, counties whose assessment
maintenance plan is disapproved will have their reimbursements
reduced in proportion to the raised fees for taxing authorities.
The state match is increased from 50% to 60% of costs.  Per
parcel state aid to assessors will increase from $5.50 to $7 per
parcel and will increase by 3% each year, but the total
reimbursement will not exceed 60% rather than 50% of costs
incurred.

Effective August 28, 1999, the assessor is required to list any
omitted taxable personal property for the current and prior year
and to impose taxes thereon.  Currently, if a county's
equivalent sales ratio is within 5% of the desired 33 l/3%, the
ratio will be certified as 33 1/3%.  This substitute relaxes the
tolerance level to 7%.

FISCAL NOTE:  Net Cost to General Revenue Fund of $0 in FY 2000,
$23,750,000 in FY 2001, and $23,850,000 in FY 2002.  Net Effect
on Other State Funds is Unknown for FY 2000, FY 2001, and FY
2002.

PROPONENTS:  Supporters say that assessors, collectors, and
schools have been working on this bill for a couple of years.
Assessors need more reimbursement, especially in rural and poor
urban areas.  Assessors need to upgrade their technology, ensure
adequate staff in tax season, and generally run more
efficiently. In order to prevent increased assessor fees from
hurting schools, deduction for local wealth in the school
funding formula is decreased.

Testifying for the bill were Representative Wiggins (for
Representative Leake); Missouri Assessors' Association; Missouri
County Collectors' Association; and Missouri Council of School
Administrators.

OPPONENTS:  There was no opposition voiced to the committee.

Becky DeNeve, Legislative Analyst

HB 730 -- Ad Valorem Property Tax Collections

Sponsor:  Leake

Effective July 1, 2000, this bill revises the school foundation
formula, used to calculate state school aid, to require a
deduction of 98.5% of a district's equalized assessed valuation,
rather than 100%.  The version of the formula revised in the
bill is the one contingently effective upon the settlement of
the St. Louis desegregation case.

Effective January 1, 2000, county collector's fees are changed.
The categories of dollar amounts collected and classifications
of counties are revised and some fees raised.  A new section is
added to create the tax maintenance fund to fund additional
operating costs from percentages of taxes collected.  County
general revenue may also be directed to the tax maintenance
fund.  A budget base is established.  Counties that become
first-class noncharter counties on or after August 28, 1999,
have transition provisions regarding the amount of their
collections.

Amounts going to the assessment fund from taxing authorities
within counties are raised.  All counties must provide from
general revenue the average of the 3 most recent years' amount
provided from general revenue to the assessment fund.  State
reimbursement rates for counties with an assessment plan are
increased; however, counties whose assessment maintenance plan
is disapproved will have their reimbursements reduced in
proportion to the raised fees for taxing authorities.

Effective August 28, 1999, the assessor is required to list any
omitted taxable personal property for the current and prior year
and to impose taxes thereon.