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Bill Summary · HB 3164

Overview

Missouri House Bill 3164 (2026) proposes changes to how the State Tax Commission determines and adjusts property valuations to achieve statewide equalization. The bill would repeal the current language and replace it with a framework that relies on ratio studies to identify property classes or subclasses whose valuations are below or above true value, and to guide corrections accordingly.

Purpose and Intent

  • Streamline and modernize the process by which the State Tax Commission equalizes real property and tangible personal property valuations across counties.
  • Introduce a quantitative, ratio-based method (ratio studies) to assess whether property classes are valued below or above true value in money.
  • Establish objective thresholds to determine under- or over-valuation and justify adjustments to bring valuations closer to true value.

Key Provisions

  • Repeal and replace Section 138.390, RSMo, with a new Section 138.390.
  • Classification framework (unchanged in broad strokes from prior law): The Commission classifies real estate into town lots vs. farming lands, and tangible personal property into categories (banking corporations, railroad-related properties, other corporations, various livestock, poultry, machinery, farm implements, etc.).
  • Equalization mechanism (new framework):
    • The Commission shall increase valuations for any class/subclass deemed valued below true value and decrease valuations for any class/subclass deemed valued above true value.
    • Use financial “ratio studies” to determine true value alignment.
  • Thresholds for determining under- or over-valuation:
    • A class/subclass is considered valued below true value if:
    • The weighted median ratio is less than 70%, and either
      • The coefficient of dispersion is greater than 25%, or
      • The upper bound of the 95% confidence interval for the weighted median is less than 70%.
    • A class/subclass is considered valued above true value if:
    • The weighted median ratio is greater than 100%, and either
      • The coefficient of dispersion is greater than 25%, or
      • The upper bound of the 95% confidence interval for the weighted median is greater than 100%.
  • Operational approach:
    • The Commission uses ratio studies to evaluate and adjust classifications and valuations to move them toward true value.

Who/What Is Affected

  • Property tax valuation processes statewide, including:
    • Counties and the city of St. Louis for property abstracts and real estate categorization.
    • Real property (town lots, farming lands) and tangible personal property (banks, railways, other corporations, livestock, machinery, farm implements, etc.).
  • Local taxpayers and property owners who are assessed based on county valuations.
  • County assessors, county clerks, and the Missouri State Tax Commission as the central authority for equalization.

Procedural and Timeline Aspects

  • Action history indicates introduction in the 2026 session, with referral to Emerging Issues (H) on May 15, 2026.
  • Earlier actions show the bill was read and introduced in February 2026.
  • If enacted, the new section would replace the existing statute (138.390) and become effective based on the bill’s enactment and any effective dates specified in the final language (not provided in the excerpt).

Notable Details

  • The bill emphasizes objective statistical criteria (weighted median ratio, coefficient of dispersion, and confidence interval bounds) to identify valuation disparities.
  • The threshold criteria (70% lower bound for under-valuation and 100% for over-valuation) are central to triggering equalization actions.
  • The approach relies on ratio studies rather than solely subjective adjustments, aiming for more data-driven equalization.

Potential Implications

  • Properties and classes falling within the defined thresholds could see valuation adjustments to align with true value, potentially affecting tax bills.
  • Counties with valuation patterns that historically deviate (high dispersion) may see more frequent adjustments.
  • Taxpayers may experience changes in assessed values as the Commission applies the ratio-based methodology.

Compiled from official sources — confirm details with the bill’s official record.

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