COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3626-01

Bill No.:          Perfected SB 805

Subject:           Property, Real and Personal; Taxation and Revenue - Property

Type:              Original

Date:               March 31, 2008

Bill Summary:            Would modify the definition of the term "Agricultural and Horticultural Property" for property tax purposes.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 5 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Agriculture (AGR) assume thsi proposal would have no fiscal impact on their organization. AGR officials stated that they don’t have any way of determining how many horse arenas there are.

Officials from the Department of Elementary and Secondary Education deferred to the State Tax Commission as to the fiscal impact of this legislation.

Officials from the Department of Revenue assume this proposal would have no fiscal impact on their organization.

Officials from the State Tax Commission (TAX) assume this proposal would have no fiscal impact on their organization. TAX officials stated that they have no information as to the number of properties being used for showing horses, and would be classified as commercial property. The proposal would change the classification of those properties to agricultural and result in reduced assessed valuations for the properties.

Officials from Linn State Technical College, the Metropolitan Community Colleges, St. Louis County, the City of Centralia, the City of Kansas City, and the City of West Plains assume this proposal would have no fiscal impact on their organizations.

Officials from the Office of Administration, Division of Budget and Planning (BAP) assume this proposal would have no fiscal impact on their organization. BAP officials stated that the proposal would add real property used for showing horses to the definition of agricultural property. The proposal would have no impact on the state General Revenue Fund, and minimal impact on the Blind Pension Fund. To the extent the proposal may impact the foundation formula for schools, state expenditures may increase. BAP defers to DESE for any calculations of that impact.

Oversight assumes this proposal would require a county assessor to change the assessment status and thus the assessed valuation of a horse showing facility from commercial to agricultural. Oversight is not able to determine how many such situations might exist and assumes this proposal would have an impact on local government property tax revenues that is less than $100,000.

FISCAL IMPACT - Small Business

This proposal could have a fiscal impact to a small business which had a facility for showing horses.

FISCAL DESCRIPTION

This proposal would modify the definition of the term "Agricultural and Horticultural Property" for property tax purposes.

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

SOURCES OF INFORMATION

Office of Administration

            Division of Budget and Planning

Department of Agriculture

Department of Elementary and Secondary Education

Department of Revenue

State Tax Commission

Linn State Technical College

Metropolitan Community Colleges

St. Louis County

City of Centralia

City of Kansas City

City of West Plains

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                March 31, 2008