Committee hears bill to require replacement‑cost method for building valuation; assessors, counties raise concerns

Representative Dean (introduced in transcript as 'Dean Vance Corp') presented House Bill 2415, which would change how buildings are valued for property tax assessment by replacing the primary market approach with a mandatory replacement‑cost approach for building valuation while continuing to value land by market approach.

Sponsor's pitch: the cost approach, the sponsor said, would address disparities cited in committee outreach — large counties (Kansas City, St. Louis) sometimes over‑assess while many rural third‑class counties are under‑assessed. The bill would use replacement (not reproduction) cost, and local cost factors in assessors' software would be used to reflect local building costs and construction quality. The sponsor acknowledged the bill currently would require the cost approach statewide but said amendments could create options such as phasing in condition or giving assessors discretion.

Concerns raised in testimony: Kenny Moore, Boone County assessor and legislative chair for the Missouri State Assessors Association, told the committee assessors already use three standard approaches — cost, market (sales comparison) and income — and choose the one most appropriate for a property; he warned that mandating cost approach “can be very subjective” for depreciation on older buildings and that the cost approach poorly captures market trends. He recommended allowing assessors discretion and cautioned about potential for swings in valuations if the change were immediate. Other county officials described localized issues (very low ratios in some rural counties) and urged attention to depreciation, appeals and a phased transition.

Public testimony included a state public advocate who supported replacement‑cost measures as providing stability for seniors and small taxpayers, citing property tax sale losses among elderly homeowners. Local commissioners and assessors recounted county‑specific problems and emphasized that implementation detail (treatment of condition, depreciation, and phasing) would materially affect outcomes.

Where it goes from here: committee members asked the sponsor to work with assessors and staff to craft amendments that address condition, depreciation, local data limits and potential phasing. The committee did not vote on HB2415 during this hearing; the record includes technical concerns about whether a statutory change could conflict with constitutional language interpreted to mean market value in some contexts, and the sponsor acknowledged ancillary constitutional work (HTR) may accompany the bill.

Representative Steinhoff said assessors should retain tools and discretion; the sponsor signaled willingness to consider amendments that narrow or phase the change.

The committee will receive follow‑up technical information and possible amendments before any final committee vote.