68th Legislature SB 54.1
1 SENATE BILL NO. 54
2 INTRODUCED BY G. HERTZ
3 BY REQUEST OF THE DEPARTMENT OF REVENUE
4
5 A BILL FOR AN ACT ENTITLED: “AN ACT REVISING THE REAPPRAISAL CYCLE FOR CERTAIN
6 CENTRALLY ASSESSED PROPERTY; PROVIDING FOR A 2-YEAR REAPPRAISAL CYCLE FOR CERTAIN
7 CENTRALLY ASSESSED PROPERTY; AMENDING SECTIONS 15-1-210, 15-1-402, 15-7-102, 15-7-111, 15-
8 8-112, 15-15-102, 15-23-101, 15-23-103, AND 15-23-212, MCA; AND PROVIDING AN APPLICABILITY
9 DATE.”
10
11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
12
13 Section 1. Section 15-1-210, MCA, is amended to read:
14 "15-1-210. Taxpayer right to know -- centrally assessed property. (1) The department shall, in the
15 course of valuing properties, post on its website 30 days prior to the issuance of current year assessment
16 notices the capitalization rate or rates to be used by the department to determine the income indicators of value
17 for centrally assessed property, including supporting information on capitalization studies. The supporting
18 information must include the rationale for adding or deleting a company or property from those included in the
19 study in the prior year.
20 (2) The department shall display a statement on its website that it will accept comments on the
21 current year capitalization rates and information as provided in subsection (1) for 20 days after posting. The
22 department shall consider the comments prior to issuing the current year assessment notices and shall post a
23 response to each written comment within 20 days of the close of the comment period.
24 (3) The department shall include all underlying computations when providing a taxpayer with a
25 determination of valuation.
26 (4) If the department changes its reliance on any indicator of value by more than 15% from the
27 previous year valuation, the department shall provide the taxpayer with a written explanation of the rationale for
28 the change when issuing an initial or final determination of valuation to a taxpayer.
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1 (5) Nothing in this section may be construed as affecting an appraisal judgment.
2 (6) Inaccuracy or inadequacy of compliance with this section does not invalidate a determination of
3 value or provide independent grounds for appeal."
4
5 Section 2. Section 15-1-402, MCA, is amended to read:
6 "15-1-402. Payment of property taxes or fees under protest. (1) (a) The person upon whom a
7 property tax or fee is being imposed under this title may, before the property tax or fee becomes delinquent,
8 pay under written protest that portion of the property tax or fee protested.
9 (b) The protested payment must:
10 (i) be made to the officer designated and authorized to collect it;
11 (ii) specify the grounds of protest; and
12 (iii) not exceed the difference between the payment for the immediately preceding tax year and the
13 amount owing in the tax year protested unless a different amount results from the specified grounds of protest,
14 which may include but are not limited to changes in assessment due to reappraisal under 15-7-111.
15 (c) If the protested property tax or fee is on property that is subject to central assessment pursuant
16 to 15-23-101, the person shall report to the department the grounds of the protest and the amount of the
17 protested payment for each county in which a protested payment was made.
18 (2) A person appealing a property tax or fee pursuant to Title 15, chapter 2 or 15, including a
19 person appealing a property tax or fee on property that is annually assessed by the department or subject to
20 central assessment pursuant to 15-23-101(1) or (2), shall pay the tax or fee under protest when due in order to
21 receive a refund. If the tax or fee is not paid under protest when due, the appeal or mediation may continue but
22 a tax or fee may not be refunded as a result of the appeal or mediation.
23 (3) If a protested property tax or fee is payable in installments, a subsequent installment portion
24 considered unlawful by the Montana tax appeal board need not be paid and an action or suit need not be
25 commenced to recover the subsequent installment. The determination of the action or suit commenced to
26 recover the first installment portion paid under protest determines the right of the party paying the subsequent
27 installment to have it or any part of it refunded to the party or the right of the taxing authority to collect a
28 subsequent installment not paid by the taxpayer plus interest from the date the subsequent installment was
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1 due.
2 (4) (a) Except as provided in subsection (4)(b), all property taxes and fees paid under protest to a
3 county or municipality must be deposited by the treasurer of the county or municipality to the credit of a special
4 fund to be designated as a protest fund and must be retained in the protest fund until the final determination of
5 any action or suit to recover the taxes and fees unless they are released at the request of the county,
6 municipality, or other local taxing jurisdiction pursuant to subsection (5). This section does not prohibit the
7 investment of the money of this fund in the state unified investment program or in any manner provided in Title
8 7, chapter 6. The provision creating the special protest fund does not apply to any payments made under
9 protest directly to the state.
10 (b) (i) Property taxes that are levied by the state against property that is centrally assessed
11 pursuant to 15-23-101 and any protested taxes on industrial property that is annually assessed by the
12 department in a school district that has elected to waive its right to protested taxes in a specific year pursuant to
13 15-1-409 must be remitted by the county treasurer to the department for deposit as provided in subsections
14 (4)(b)(ii) through (4)(b)(iv).
15 (ii) The department shall deposit 50% of that portion of the funds levied for the university system
16 pursuant to 15-10-109 in the state special revenue fund to the credit of the university system, and the other
17 50% of the funds levied pursuant to 15-10-109 must be deposited in a centrally assessed property tax state
18 special revenue fund.
19 (iii) Fifty percent of the funds remaining after the deposit of university system funds must be
20 deposited in the state general fund, and the other 50% must be deposited in a centrally assessed property tax
21 state special revenue fund.
22 (iv) Fifty percent of the funds from a school district that has waived its right to protested taxes must
23 be deposited in the state general fund, and the other 50% must be deposited in a school district property tax
24 protest state special revenue fund.
25 (5) (a) Except as provided in subsections (5)(b) and (5)(c), the governing body of a taxing
26 jurisdiction affected by the payment of taxes under protest in the second and subsequent years that a tax
27 protest remains unresolved may demand that the treasurer of the county or municipality pay the requesting
28 taxing jurisdiction all or a portion of the protest payments to which it is entitled, except the amount paid by the
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1 taxpayer in the first year of the protest. The decision in a previous year of a taxing jurisdiction to leave protested
2 taxes in the protest fund does not preclude it from demanding in a subsequent year any or all of the payments
3 to which it is entitled, except the first-year protest amount.
4 (b) The governing body of a taxing jurisdiction affected by the payment of taxes under protest on
5 property that is centrally assessed pursuant to 15-23-101 or on industrial property that is assessed annually by
6 the department in the first and subsequent years that a tax protest remains unresolved may demand that the
7 treasurer of the county or municipality pay the requesting taxing jurisdiction all or a portion of the protest
8 payments to which it is entitled. The decision in a previous year of a taxing jurisdiction to leave protested taxes
9 of centrally assessed property in the protest fund does not preclude it from demanding in a subsequent year
10 any or all of the payments to which it is entitled.
11 (c) The provisions of subsection (5)(b) do not apply to a school district that has elected to waive its
12 right to its portion of protested taxes on centrally assessed property and on industrial property that is assessed
13 annually by the department for that specific year as provided in 15-1-409.
14 (6) (a) If action before the county tax appeal board, Montana tax appeal board, or district court is
15 not commenced within the time specified or if the action is commenced and finally determined in favor of the
16 department of revenue, county, municipality, or treasurer of the county or the municipality, the amount of the
17 protested portions of the property tax or fee must be taken from the protest fund or the centrally assessed
18 property tax state special revenue fund and deposited to the credit of the fund or funds to which the property tax
19 belongs, less a pro rata deduction for the costs of administration of the protest fund and related expenses
20 charged to the local government units.
21 (b) (i) If the action is finally determined adversely to the governmental entity levying the tax, then
22 the treasurer of the municipality, county, or state entity levying the tax shall, upon receipt of a certified copy of
23 the final judgment in the action and upon expiration of the time set forth for appeal of the final judgment, refund
24 to the person in whose favor the judgment is rendered the amount of the protested portions of the property tax
25 or fee that the person holding the judgment is entitled to recover, together with interest from the date of
26 payment under protest. The department shall refund from the school district property tax protest state special
27 revenue fund the protested portions of property taxes and interest to a taxpayer in a school district in which the
28 school district has elected to waive its right to its portion of protested taxes for that specific year as provided in
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1 15-1-409. If the amount available for the refund in the school district property tax protest state special revenue
2 fund is insufficient to refund the property tax payments, the department shall pay the remainder of the refund
3 from the state general fund.
4 (ii) The taxing jurisdiction shall pay interest at the rate of interest earned by the pooled investment
5 fund provided for in 17-6-203 for the applicable period.
6 (c) If the amount retained in the protest fund is insufficient to pay all sums due the taxpayer, the
7 treasurer shall apply the available amount first to tax repayment, then to interest owed, and lastly to costs.
8 (d) (i) (A) If, after a final determination by the Montana tax appeal board or a court or after
9 settlement of an appeal, the final assessed value of a property that is centrally assessed under 15-23-101 or an
10 industrial property that is annually assessed by the department is less than 75% of the department's original
11 assessed value, the governing body may demand that the state refund from the general fund the protested
12 taxes equivalent to the difference between the final determined assessed value and 75% of the original
13 assessed value.
14 (B) For industrial property under subsection (6)(d)(i)(A) in which the school district has elected to
15 waive its right to its portion of protested taxes for that specific year, the department shall refund from the school
16 district property tax protest state special revenue fund the protested portions of property taxes and interest to a
17 taxpayer.
18 (C) The provisions of subsection (6)(d)(i)(A) do not apply to protested taxes for which the taxpayer
19 protests the classification of the property.
20 (ii) If the protest action is decided adversely to a taxing jurisdiction and the amount retained in the
21 protest fund is insufficient to refund the tax payments and costs to which the taxpayer is entitled and for which
22 local government units are responsible, the treasurer shall bill and the taxing jurisdiction shall refund to the
23 treasurer that portion of the taxpayer refund, including tax payments and costs, for which the taxing jurisdiction
24 is proratably responsible. The treasurer is not responsible for the amount required to be refunded by the state
25 treasurer as provided in subsection (6)(b).
26 (iii) For an adverse protest action against the state for centrally assessed property, the department
27 shall refund from the centrally assessed property tax state special revenue fund the amount of protested taxes
28 and from the state general fund the amount of interest as required in subsection (6)(b). The amount refunded
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1 for an adverse protested action from the centrally assessed property tax state special revenue fund may not
2 exceed the amount of protested taxes or fees required to be deposited for that action pursuant to subsections
3 (4)(b)(ii) and (4)(b)(iii). If the amount available for the adverse protested action in the centrally assessed
4 property tax state special revenue fund is insufficient to refund the tax payments to which the taxpayer is
5 entitled and for which the state is responsible, the department shall pay the remainder of the refund
6 proportionally from the state general fund and from money deposited in the state special revenue fund levied
7 pursuant to 15-10-109.
8 (e) In satisfying the requirements of subsection (6)(d), the taxing jurisdiction, including the state, is
9 allowed not more than 1 year from the beginning of the fiscal year following a final resolution of the protest. The
10 taxpayer is entitled to interest on the unpaid balance at the rate referred to in subsection (6)(b) from the date of
11 payment under protest until the date of final resolution of the protest and at the combined rate of the federal
12 reserve discount rate quoted from the federal reserve bank in New York, New York, on the date of final
13 resolution, plus 4 percentage points, from the date of final resolution of the protest until refund is made.
14 (7) A taxing jurisdiction, except the state, may satisfy the requirements of this section by use of
15 funds from one or more of the following sources:
16 (a) imposition of a property tax to be collected by a special tax protest refund levy;
17 (b) the general fund or any other funds legally available to the governing body; and
18 (c) proceeds from the sale of bonds issued by a county, city, or school district for the purpose of
19 deriving revenue for the repayment of tax protests lost by the taxing jurisdiction. The governing body of a
20 county, city, or school district is authorized to issue the bonds pursuant to procedures established by law. The
21 bonds may be issued without being submitted to an election. Property taxes may be levied to amortize the
22 bonds.
23 (8) If the department revises an assessment that results in a refund of taxes of $5 or less, a refund
24 is not owed."
25
26 Section 3. Section 15-7-102, MCA, is amended to read:
27 "15-7-102. Notice of classification, market value, and taxable value to owners -- appeals. (1) (a)
28 Except as provided in 15-7-138, the department shall mail or provide electronically to each owner or purchaser
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1 under contract for deed a notice that includes the land classification, market value, and taxable value of the
2 land and improvements owned or being purchased. A notice must be mailed or, with property owner consent,
3 provided electronically to the owner only if one or more of the following changes pertaining to the land or
4 improvements have been made since the last notice:
5 (i)