HCS HB 1836 -- PROPERTY TAX ASSESSMENT AND TAX CREDIT

SPONSOR:  Richard (Flook)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Job Creation and Economic Development by a vote of 11 to 0.

This substitute specifies that the true value in money for
assessment purposes of any possessor interest in real property on
or adjacent to a certain commercial airport and owned by a
political subdivision will be the true value in money of the
possessor interest in the real property less the total costs paid
toward any new construction or improvements on the property if
included in the possessor interest, unless paid by the political
subdivision, regardless of the year the costs were incurred.

Beginning January 1, 2009, a property tax credit is authorized
for expenses incurred to manufacture, maintain, or improve a
freight line company's qualified rolling stock up to the amount
of its tax liability.  The state will annually reimburse a
political subdivision for any loss in revenue.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2009, $0 in FY 2010, and $4,000,000 in FY 2011.  Estimated
Cost on Other State Funds of $0 in FY 2009, Unknown in FY 2010,
and Unknown in FY 2011.

PROPONENTS:  Supporters say that the bill will correct a property
tax policy that is fundamentally unfair.  There are approximately
11,000 acres of undeveloped land near the Kansas City
International (KCI) Airport, and it will remain undeveloped
unless this legislation is enacted.  Currently, when a company
leases city-owned property near the airport, it is forced to pay
property taxes based on the bonus value of the rent.  Kansas City
is at a disadvantage when compared to other competing airports
because those airports have abated the taxes associated with the
bonus value.  KCI Airport has been there for 35 years and only 27
of the 11,000 acres have been developed since 1987.  Businesses
choose to locate their distribution centers near airports in
other cities simply because it's more expensive to do business at
KCI because of this tax policy.

Testifying for the bill were Representative Flook; City of Kansas
City; Mark Vanloh, Kansas City Aviation Department; Economic
Development Corporation of Kansas City, Missouri; and Lambert-St.
Louis Airport Authority.

OPPONENTS:  Those who oppose the bill say that the legislation
will adversely affect the school districts near the airport
because they rely on the property taxes paid by businesses in
that area.  Reducing the tax rate for these businesses will
result in less revenue for the schools, which they will not be
able to recoup through residential property taxes even if more
people move into the area as a result of new jobs.  Land near the
airport is already an enterprise zone, so businesses there
currently receive a tax abatement of 50%.  Increasing the
property tax abatement for businesses will only hurt the schools.

Testifying against the bill were Dennis Fischer, Park Hill School
District; Cooperating School Districts of Greater Kansas City;
Mark Harpst, School Administrators Coalition; Missouri National
Education Association; and Missouri School Boards Association.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:11 pm