Unofficial Draft Copy
**** As of: 11/25/2024, 02:18:17
69th Legislature 2025 Drafter: Megan Moore, **** LC 0173
1 **** BILL NO. ****
2 INTRODUCED BY ****
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING PROPERT TAX LAWS; REVISING TAX
5 RATES FOR CERTAIN CLASS FOUR RESIDENTIAL AND COMMERCIAL PROPERTY; PROVIDING A
6 LOWER TAX RATE FOR CERTAIN OWNER-OCCIPIED RESIDENTIAL PROPERTY AND LONG-TERM
7 RENTALS; PROVIDING A LOWER TAX RATE FOR A PORTION OF COMMERCIAL PROPERTY VALUE;
8 PROVIDING ELIGIBILITY AND APPLICATION REQUIREMENTS; PROVIDNG FOR AN APPEAL PROCESS;
9 PROVIDING PENALTIES FOR FALSE OR FRAUDULENT CLAIMS; PROVIDNG DEFINITIONS; PROVIDNG
10 RULEMAKING AUTHORITY; AMENDING SECTIONS 15-6-134, 15-7-102, 15-15-101, 15-15-102, 15-15-103,
11 15-16-101, AND 15-17-125, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE, AN APPLICABILITY
12 DATE, AND A TERMINATION DATE.”
13
14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
15
16 NEW SECTION. Section 1. Definitions. As used in [sections 2 through 5] and 15-6-134, the
17 following definitions apply:
18 (1) "Homestead reduced tax rate" means the tax rate provided for in 15-6-134(3)(b)(i) and (3)(b)(ii). Commented [MM1]: Added subsection references
19 (2) “Long-term rental” means class four residential property:
20 (a) that is a single-family dwelling unit, unit of a multiple-unit dwelling, trailer, manufactured home,
21 or mobile home and the parcel on which the long-term rental improvements are located but not including any Commented [MM2]: Changed from “and not”
22 contiguous or adjacent parcels;
23 (b) which an owner can demonstrate was rented for periods of 30 days or more for at least 9
24 months in each tax year for which the rental property reduced tax rate is claimed;
25 (c) that is occupied by tenants who use the dwelling as a residence during the year in which the
26 reduced rate is claimed; and
27 (d) for which the owner is current on payment of the assessed Montana property taxes when
28 claiming the reduced rate.
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 Unofficial Draft Copy
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69th Legislature 2025 Drafter: Megan Moore, **** LC 0173
1 (3) "Owner" includes a purchaser under a contract for deed as defined at 70-20-115, a grantor of a
2 trust indenture as defined at 71-1-103, and the trustee of a grantor trust that is revocable as defined at 72-38-
3 103.
4 (4) (a) “Principal residence” means a class four residential property:
5 (i) that is a single-family dwelling unit, unit of a multiple-unit dwelling, trailer, manufactured home,
6 or mobile home and the parcel on which the principal residence improvements are located but not including any Commented [MM3]: Instead of “and not”
7 contiguous or adjacent parcels;
8 (ii) in which an owner can demonstrate the owner owned and lived for at least 7 months of the
9 year for which the homestead reduced tax rate for a principal residence is claimed;
10 (iii) that is the only residence for which the owner claims the homestead reduced tax rate for that
11 year; and
12 (iv) for which the owner made payment of the assessed Montana property taxes.
13 (b) An owner who cannot meet the requirements of subsection (2)(a)(ii) because the owner’s
14 principal residence changed during the tax year to another principal residence may still qualify for the
15 homestead reduced tax rate if the owner paid the Montana property taxes while residing in each principal
16 residence for a total of at least 7 consecutive months for each tax year.
17 (4) "Rental property reduced tax rate" means tax rate provided for in 15-6-134(3)(b)(i) and (ii). Commented [MM4]: Added subsection references
18 (5) "Tax year 2025" means the period January 1, 2025, through December 31, 2025.
19 (6) "Tax year 2026" means the period January 1, 2026, through December 31, 2026.
20 (7) "Tax year 2027" means the period January 1, 2027, through December 31, 2027.
21
22 NEW SECTION. Section 2. Homestead reduced tax rate transition period -- automatic
23 qualification -- application for other property. (1) For tax year 2025 and tax year 2026, a class four
24 residential property that is a principal residence automatically qualifies for the homestead reduced tax rate
25 provided for in 15-6-134(3)(b) if:
26 (a) the owner claimed and received a property tax rebate for tax year 2023 pursuant to Chapter
27 47, Laws of 2023; Commented [MM5]: Editors:
https://bills.legmt.gov/#/bill/20231/LC4332?open_tab=s
28 (b) the property did not change ownership after July 31, 2023; and um
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 Unofficial Draft Copy
**** As of: 11/25/2024, 02:18:17
69th Legislature 2025 Drafter: Megan Moore, **** LC 0173
1 (c) the property remains the principal residence of the owner.
2 (2) The department shall maintain a website for property owners to verify if their property
3 automatically qualifies for the homestead reduced tax rate for a principal residence described in subsection (1).
4 (3) The automatic qualification for the homestead reduced tax rate for a principal residence expires
5 after tax year 2026. Beginning in tax year 2027, the owner of a class four residential property that wishes to
6 continue to receive the homestead reduced tax rate for a principal residence, regardless of whether the owner
7 applied and received a lower tax rate as provided in subsection (4), shall apply to the department as provided in
8 [section 3].
9 (4) The owner of a class four residential property that does not meet the requirements for
10 automatic qualification in subsection (1) for the homestead reduced tax rate for a principal residence but that
11 would otherwise qualify under [section 3] may apply for a temporary homestead reduced tax rate for a principal
12 residence as provided in [section 3] that is applicable to tax years 2025 and 2026.
13 (5) An application for qualifying property under subsection (4) must be made by March 1, 2025, to
14 qualify for a reduced rate in tax years 2025 and 2026 and by March 1, 2026, to qualify for a reduced rate in tax
15 year 2026. If a temporary homestead reduced tax rate is granted under subsection (4), it remains effective
16 through the end of tax year 2026.
17 (6) For tax year 2025 and tax year 2026, a class four residential property that qualified for the
18 property tax assistance program provided for in 15-6-305 or the disabled veteran program provided for in 15-6-
19 311 in tax year 2024 automatically qualifies for the homestead reduced tax rate.
20
21 NEW SECTION. Section 3. Homestead reduced tax rate -- application -- limitations. (1) Except
22 as provided in 15-6-134(3)(b)(iii), there is a homestead reduced tax rate provided for in 15-6-134(3)(b) for a Commented [MM6]: Reviewed these and it should be
correct now. It references the value above 4X median.
23 principal residence as provided in this section.
24 (2) (a) Beginning in tax year 2027, the owner of a principal residence shall apply to the department
25 of revenue to receive the homestead reduced tax rate.
26 (b) To receive the homestead reduced tax rate for the tax year in which the application is first
27 made, the owner shall apply electronically or by mail on a form prescribed by the department and postmarked
28 by March 1. Approved applications received electronically or postmarked after March 1 apply to the following
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69th Legislature 2025 Drafter: Megan Moore, **** LC 0173
1 tax year.
2 (c) Once approved, the homestead reduced tax rate remains effective until the end of the tax year
3 in which any of the following events occur:
4 (i) there is a change in ownership of the property;
5 (ii) the owner no longer uses the dwelling as a principal residence; or
6 (iii) the owner applies for a homestead reduced tax rate for a different principal residence.
7 (d) If a homestead reduced tax rate application is terminated pursuant to subsection (c) or [section
8 5], the owner shall submit a new application to the department to reestablish the homestead reduced tax rate
9 for the property.
10 (e) An application for a homestead reduced tax rate must be submitted on a form prescribed by the
11 department and must contain:
12 (i) a written declaration made under penalty of perjury that the applicant owns and maintains the
13 land and improvements as the principal residence as defined in [section 1]. The application must state the
14 penalty provided for in [section 5]. Commented [MM7]: I removed repetitive language on
perjury in (2)(e) and added this but I don’t know if it
15 (ii) the geocode or other property identifier for the principal residence for which the applicant is works.
16 requesting the homestead reduced tax rate;
17 (iii) the social security number of the applicant; and
18 (iv) any other information required by the department that is relevant to the applicant’s eligibility.
19 (3) (a) Except as provided in subsection (3)(b), class four residential property owned by an entity is Commented [MM8]: I don’t think we have to reference
ag stead property here because that is listed with a
20 not eligible to receive the homestead reduced tax rate. separate rate in 15-6-134(3)(c).
21 (b) The trustee of a grantor revocable trust may apply for a homestead reduced tax rate for a
22 principal residence on behalf of the trust if the dwelling meets the definition of a principal residence for the
23 grantor.
24 (4) The department shall notify the owner if the homestead reduced tax rate is applied to the
25 property or if the application was denied.
26
27 NEW SECTION. Section 4. Rental property reduced tax rate -- application -- limitations. (1)
28 There is a rental property reduced tax rate provided for in 15-6-134(3)(b) for a long-term rental as provided in
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1 this section.
2 (2) (a) The owner of a long-term rental may apply to the department of revenue to receive the
3 rental property reduced tax rate. The application must be made by an individual owner or, for an entity owner,
4 by an authorized representative of the entity.
5 (b) To receive the rental property reduced tax rate for the tax year in which the application is first
6 made, the owner or authorized representative shall apply electronically or by mail on a form prescribed by the
7 department and postmarked by March 1. Approved applications received electronically or postmarked after
8 March 1 apply to the following tax year.
9 (c) Once approved, the rental property reduced tax rate remains effective until:
10 (i) there is a change in ownership of the property;
11 (ii) the property is no longer rented to tenants as a dwelling;
12 (iii) the terms of the lease change and the property no longer qualifies as a long-term rental as
13 defined in [section 1]; and
14 (iv) the owner fails to submit a complete reapplication to the department as required in subsection
15 (4).
16 (3) An application for a rental property reduced tax rate must be submitted on a form prescribed by
17 the department and must contain:
18 (a) a written declaration made under penalty of perjury that the applicant owns and maintains the
19 land and improvements as a long-term rental as defined in [section 1]. The application must state the penalty
20 provided for in [section 5];
21 (b) the geocode or other property identifier for the long-term rental for which the applicant is
22 requesting the rental property reduced tax rate;
23 (c) the social security number or taxpayer identification number of the applicant;
24 (d) the income and expense information for the long-term rental for the immediately preceding
25 year, including the amount of rent charged per month; and
26 (e) any other information required by the department that is relevant to the applicant’s eligibility.
27 (4) To continue receiving the rental property reduced tax rate, the owner of a qualifying long-term
28 rental shall reapply annually as provided in subsection (3).
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1 (5) Periods of short-term vacancy not exceeding 3 months in a 12-month period do not disqualify a
2 long-term rental from receiving the rental property reduced tax rate.
3 (6) The department shall notify the owner if the rental property reduced tax rate is applied to the
4 property or if the application was denied.
5
6 NEW SECTION. Section 5. Homestead and rental property reduced tax rates -- penalty for false
7 or fraudulent application. (1) Except as provided in subsection (2), if the department determines that an
8 application for a homestead reduced tax rate or a rental property reduced tax rate was improperly approved,
9 the department shall revise the assessment for each year the homestead reduced tax rate or rental property
10 reduced tax rate was improperly granted subject to the assessment revision procedure established in 15-8-601.
11 (2) (a) A person who files a false or fraudulent application for a homestead reduced tax rate
12 provided for in [section 2 or 3] or for a rental property reduced tax rate provided for in [section 4] is subject to
13 criminal prosecution under the provisions of 45-7-202.
14 (3) (a) If a person is determined to have filed a false or fraudulent application, the department shall
15 revise the assessment of the property subject to the assessment revision procedure established in 15-8-601
16 and this section and assess a penalty as provided in this subsection. The penalty is equal to three times the
17 base penalty amount calculated under this subsection (3)(b) plus interest at the rate provided in 15-6-102
18 calculated from the original due date of the taxes, until paid.
19 (b) The base penalty amount is equal to the property tax due for each year the homestead
20 reduced tax rate or rental property reduced tax rate was improperly received, determined using the tax rate
21 provided for in 15-6-134(3)(a), the appraised value, and the mill levies in effect for the year, less the actual
22 property taxes paid in the year.
23 (c) The revised assessment and penalty must be assessed against a person who filed a false or
24 fraudulent application even if the person no longer owns the property.
25 (4) The penalty provided for in subsection (3) may be recovered as any other tax owed the state. If
26 this difference plus penalty becomes due and owing, the department may issue a warrant for distraint as
27 provided in Title 15, chapter 1, part 7.
28 (5) If the department determines that a false or fraudulent application was made, the department
-