PURPOSE: This rule establishes the procedures for implementation of the Homestead Preservation Credit created by section 137.106, RSMo. This rule reflects recent statutory changes for applications filed after 2005.

1. (1) This rule only applies to applications filed after 2005.

2. (2) Definition of Terms.

   1. (A) Application year—the calendar year in which the application for property tax credit is filed.
   2. (B) Assessor—the county assessor for the county in which the homestead is located.
   3. (C) Base year—the calendar year immediately preceding the prior year.
   4. (D) Credit year—the calendar year immediately following the application year.
   5. (E) Department—the Missouri Department of Revenue.
   6. (F) Homestead—the dwelling in Missouri owned and occupied by a taxpayer and up to five (5) acres of land surrounding it as is reasonably necessary for use of the dwelling as a home. The dwelling may be a mobile home.
   7. (G) Homestead Preservation Credit—the credit provided pursuant to section 137.106, RSMo.
   8. (H) Prior year—the calendar year immediately preceding the application year.
   9. (I) Homestead exemption limit—a single, statewide percentage increase in property tax liability from the base year to the prior year.
   10. (J) Verified eligible owners—taxpayers who have met the qualifications for the Homestead Preservation Credit.

3. (3) Application of Rule.

   1. (A) A taxpayer must complete an application on the form prescribed by the department. The taxpayer must submit the properly completed application to the department between April 1 and October 15 of the application year. An application postmarked on or before October 15 is timely.
   2. (B) Upon receipt of the application, the department will determine if the taxpayer is a verified eligible owner. The department must provide a list of all verified eligible owners to the county assessors by December 15 of the application year. By January 15 of the credit year, the assessors must provide the department with a list of verified eligible owners who made improvements to the homestead that were not for accommodation of a disability and the dollar amount of the assessed value of such improvements. If the dollar amount of the appraised value of such improvements totaled more than five percent (5%) of the base year appraised value, the owners shall be disqualified from receiving the homestead preservation credit in the credit year.

   3. (C) The Department of Revenue will calculate the level of appropriations necessary to set the homestead exemption limit for all verifiable eligible owners as follows:

      1. 1. In even application years, the appro-

priation amount will be the amount by which the aggregate tax liability for the prior year exceeds a five percent (5%) increase from the base year’s aggregate tax liability for all qualifying homestead property; and

1. 2. In odd application years, the appro-

priation amount will be the amount by which the aggregate tax liability for the prior year exceeds a two and one-half percent (2.5%) increase from the base year’s aggregate tax liability for all qualifying homestead property.

1. (D) The department will provide the appropriation calculation to the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Director of the Office of Budget and Planning by January 31 of the credit year.
2. (E) If funds are appropriated for the Homestead Preservation Credit, the department will set the homestead exemption limit by July 31 of the credit year. If no appropriation is made, then no Homestead Preservation Credit shall apply in that year.

3. (F) After setting the homestead exemption limit, the department will calculate the credit, if any, applicable to each verified eligible owner. By August 31 of the credit year, the department will send to county collectors and township county clerks:

   1. 1. A list of verified eligible owners;
   2. 2. The amount of each credit;
   3. 3. The certified parcel number of the

homestead; and

1. 4. The address of the homestead proper-

ty.

1. (G) The department will instruct the state treasurer to distribute the appropriation to the collector’s fund in each county to exactly offset the homestead exemption credit being issued. The funds shall be forwarded to the collectors and clerks of township counties by October 1 of the credit year.
2. (H) If an applicant failed to pay the property tax liability for the homestead in full for the application year, the prior year, or the base year, the credit is void and any money allotted for a credit on the property tax for that property lapses to the state to be credited to the general revenue fund.
3. (I) If an applicant dies or transfers ownership of the homestead property after application but prior to the mailing of the tax bill in the credit year, the credit is void and any money allotted for a credit on the property tax for that property lapses to the state to be credited to the general revenue fund.

AUTHORITY: section 137.106, RSMo Supp. 2006.* Original rule filed Oct. 17, 2005, effective April 30, 2006. Amended: Filed Oct. 25, 2006, effective May 30, 2007. *Original authority: 137.106, RSMo 2004, amended 2005, 2006.