- Committee -

SCS/SB 730 - This act creates the Missouri Homestead Preservation Act. The act will enable senior citizens and disabled persons to obtain a credit against their property taxes for an increase to their taxes that exceeds a certain amount (around 5%). The credit for an excessive increase will be applied against the taxes paid in the following year. The act requires an appropriation by the Legislature to fund the credit. A more detailed summary follows:

By September 30th of any year, all persons wishing to participate in the homestead exemption must have applied with their local assessor. Applicants must include the following information:

1. Age 65 or older (at least one spouse);

2. Income test (where circuit breaker leaves off up to $50K ($54K for a married couple)of household income);

3. Verification of homestead property (farms will be the house and appurtenances and the up to five acres surrounding the house, as such land is classified residential property on the assessor's property record card);

4. Certification that the property owner has not made any improvements to the property in the last year of greater than 5% of the prior year assessed value. This will be verified by the assessors.

By October 31st the assessors will forward all info on homestead applicants to Department of Revenue (DOR). Next, by December 1st the DOR certifies to collectors those applicants who meet requirements of the homestead exemption credit.

In January the legislature will file an appropriation bill to fund homestead exemption based on following criteria:

Appropriation = Sum tax liability increases on a per homestead recipient basis over the last two years that exceed 5%.

By January 15th county collectors must provide list of any homestead recipients who have failed to pay the property taxes due for the year that just ended December 31. Recipients are disqualified from the pending appropriation and the appropriation is adjusted accordingly.

After the legislature makes appropriation for homestead exemption the DOR will calculate/verify that the amount of the appropriation matches the level of exemption (the 5% cap). If appropriation is insufficient, DOR will adjust the 5% figure accordingly. DOR then certifies a list to collectors of each homestead recipient, including the specific exemption (credit)the recipient is to receive. The State Treasurer next sends money to county collection funds to be distributed as normal property tax funds are distributed.

Around October/November county collectors send current year tax bill with credit for prior year homestead exemption listed on the bill and applied against current bill.

JEFF CRAVER