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69th Legislature 2025 Drafter: Megan Moore, **** LC 0989
1 **** BILL NO. ****
2 INTRODUCED BY ****
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT REVISING MILL LEVY ELECTION LAWS; LIMITING THE
5 DURATION OF MILL LEVIES SUBMITTED TO VOTERS; LIMITING MILL LEVIES TO 10 YEARS WITHOUT
6 VOTER REAPPROVAL; TERMINATING VOTED MILL LEVIES UNLESS THEY ARE EXTENDED BEFORE
7 THE TERMINATION DATE; PROVIDING DATES ON WHICH LEVIES TERMINATE; AMENDING SECTIONS
8 7-15-4286, 15-10-425, AND 20-9-502, MCA; AND PROVIDING AN EFFECTIVE DATE AND AN
9 APPLICABILITY DATE.”
10
11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
12
13 Section 1. Section 7-15-4286, MCA, is amended to read:
14 "7-15-4286. Procedure to determine and disburse tax increment -- remittance of excess portion
15 of tax increment for targeted economic development district. (1) (a) Except as provided in subsection
16 (1)(b), mill rates of taxing bodies for taxes levied after the effective date of the tax increment provision must be
17 calculated on the basis of the sum of the taxable value, as shown by the last equalized assessment roll, of all
18 taxable property located outside the urban renewal area or targeted economic development district and the
19 base taxable value of all taxable property located within the area or district. The mill rate determined must be
20 levied against the sum of the actual taxable value of all taxable property located within as well as outside the
21 area or district.
22 (b) If a mill levy is excluded from the tax increment calculation pursuant to subsections (2)(b)
23 through (2)(d), the calculation pursuant to subsection (1)(a) must use the total taxable value of all property
24 located within the area or district.
25 (2) (a) Except as provided in subsections (2)(b) through (2)(d) and (3) and subject to subsection
26 (6), the tax increment, if any, received in each year from the levy of the combined mill rates of all the affected
27 taxing bodies against the incremental taxable value within the area or district must be paid into a special fund
28 held by the treasurer of the local government and used as provided in 7-15-4282 through 7-15-4294.
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1 (b) For targeted economic development districts and urban renewal areas created before April 6,
2 2017, the combined mill rates used to calculate the tax increment may not include the mill rates for the
3 university system mills levied pursuant to 15-10-109 and 20-25-439.
4 (c) For targeted economic development districts created on or after April 6, 2017, and before July
5 1, 2022, and urban renewal areas created on or after April 6, 2017, the combined mill rates used to calculate
6 the tax increment may not include mill rates for:
7 (i) the university system mills levied pursuant to 15-10-109 and 20-25-439; and
8 (ii) a new mill levy approved by voters as provided in 15-10-425 after the adoption of a tax
9 increment provision.
10 (d) For targeted economic development districts created after June 30, 2022, the combined mill
11 rates used to calculate the tax increment may not include mill rates for:
12 (i) the university system mills levied pursuant to 15-10-109 and 20-25-439;
13 (ii) one-half of the elementary, high school, and state equalization mills levied pursuant to 20-9-
14 331, 20-9-333, and 20-9-360;
15 (iii) a new mill levy approved by voters as provided in 15-10-425 after the adoption of a tax
16 increment provision; and
17 (iv) any portion of an existing mill levy designated by the local government as excluded from the tax
18 increment.
19 (3) (a) Subject to 7-15-4287 and subsection (3)(b) of this section, a targeted economic
20 development district with a tax increment provision adopted after October 1, 2019, may expend or accumulate
21 tax increment for:
22 (i) the payment of the costs listed in 7-15-4288;
23 (ii) the cost of issuing bonds; or
24 (iii) any pledge to the payment of the principal of any premium, if any, and interest on the bonds
25 issued pursuant to 7-15-4289 and sufficient to fund any reserve fund in respect of the bonds in an amount not
26 to exceed 125% of the maximum principal and interest on the bonds in any year during the term of the bonds.
27 (b) Any excess tax increment remaining after the use or accumulation of funds as set forth in
28 subsection (3)(a) must be:
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69th Legislature 2025 Drafter: Megan Moore, **** LC 0989
1 (i) remitted to each taxing jurisdiction for which the mill rates are included in the calculation of the
2 tax increment as provided in subsections (1) and (2); and
3 (ii) proportional to the taxing jurisdiction's share of the total mills levied.
4 (c) A targeted economic development district is not subject to the provisions of this subsection (3)
5 if bonds have not been issued to finance the project.
6 (4) Any portion of the excess tax increment remitted to a school district pursuant to subsection (3)
7 is subject to the provisions of 7-15-4291(2) through (5).
8 (5) The balance of the taxes collected in each year must be paid to each of the taxing bodies as
9 otherwise provided by law.
10 (6) For the purposes of subsections (2)(b)(ii) and (2)(c)(iii), a mill levy reapproved as provided in
11 15-10-425(2)(c) is not considered a new mill levy."
12
13 Section 2. Section 15-10-425, MCA, is amended to read:
14 "15-10-425. Mill levy election. (1) A Subject to subsection (6), a county, consolidated government,
15 incorporated city, incorporated town, school district, or other taxing entity may impose a new mill levy, increase
16 a mill levy that is required to be submitted to the electors, or exceed the mill levy limit provided for in 15-10-420
17 by conducting an election as provided in this section. This section does not apply to bond elections.
18 (2) An election pursuant to this section must be held in accordance with Title 13, chapter 1, part 4
19 or 5, or Title 20 for school elections, whichever is appropriate to the taxing entity. The governing body shall
20 pass a resolution, shall amend its self-governing charter, or must receive a petition indicating an intent to
21 impose a new levy, increase a mill levy, or exceed the current statutory mill levy provided for in 15-10-420 on
22 the approval of a majority of the qualified electors voting in the election. The resolution, charter amendment, or
23 petition must include:
24 (a) the specific purpose for which the additional money will be used;
25 (b) either:
26 (i) the specific amount of money to be raised and the approximate number of mills to be imposed;
27 or
28 (ii) the specific number of mills to be imposed and the approximate amount of money to be raised;
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1 and
2 (c) whether the levy is permanent or the durational limit on of the levy, which may not exceed 10
3 years. The governing body may submit to the qualified electors for reapproval a levy that will terminate before
4 the next election. Commented [MM1]: Before the next election only
gives them one year to vote it. Do you want to allow 3
5 (3) Notice of the election must be prepared by the governing body and given as provided in 13-1- years or not specify?
6 108. The form of the ballot must reflect the content of the resolution or charter amendment and must include:
7 (a) the statement that "an increase in property taxes may lead to an increase in rental costs"; and
8 (b) a statement of the impact of the election on homes valued at $100,000, $300,000, and
9 $600,000 in the district in terms of actual dollars in additional property taxes that would be imposed on
10 residences with those values if the mill levy were to pass. The ballot may also include a statement of the impact
11 of the election on homes of any other value in the district, if appropriate.
12 (4) If the majority voting on the question are in favor of the additional levy, the governing body is
13 authorized to impose the levy in either the amount or the number of mills specified in the resolution or charter
14 amendment.
15 (5) A governing body, as defined in 7-6-4002, may reduce an approved levy in any fiscal year
16 without losing the authority to impose in a subsequent fiscal year up to the maximum amount or number of mills
17 approved in the election. However, nothing in this subsection authorizes a governing body to impose more than
18 the approved levy in any fiscal year or to extend the duration of the approved levy.
19 (6) (a) Except as provided in subsection (6)(b) and unless reapproved by voters before the
20 termination date, all mill levies approved pursuant to this section terminate on December 31 ten years after
21 approval by the electorate and every 10 years thereafter. Commented [MM2]: I got confirmation that county,
schools, and cities can hold elections in any year. I
22 (b) (i) If the mill levy was last approved by voters more than 5 years ago, the mill levy terminates simplified to have one termination for levies approved
5+ years ago and one for 5 years or less. The 5+ group
23 on December 31, 2028, and every 10 years thereafter; and will have three elections (2026, 2027, and 2028) and 5
years or less have two more (5 total). Anything
24 (ii) If the mill levy was last approved by voters 5 years ago or less, the mill levy terminates on approved after the effective date terminates 10 years
after approval.
25 December 31, 2030, and every 10 years thereafter."
26
27 Section 3. Section 20-9-502, MCA, is amended to read:
28 "20-9-502. Purpose and authorization of building reserve fund -- subfund structure. (1) The
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1 trustees of any district may establish a building reserve fund to budget for and expend funds for any of the
2 purposes set forth in this section. Appropriate subfunds must be created to ensure separate tracking of the
3 expenditure of funds from voted and nonvoted levies and transfers for school safety pursuant to 20-9-236.
4 (2) (a) A voted levy may be imposed and a subfund must be created with the approval of the
5 qualified electors of the district for the purpose of raising money for the future construction, equipping, or
6 enlarging of school buildings or for the purpose of purchasing land needed for school purposes in the district. In
7 order to submit to the qualified electors of the district a building reserve proposition for the establishment of or
8 addition to a building reserve, the trustees shall pass a resolution that specifies:
9 (i) the purpose or purposes for which the new or addition to the building reserve will be used;
10 (ii) the duration of time over which the new or addition to the building reserve will be raised in
11 annual, equal installments;
12 (iii) the total amount of money that will be raised during the duration of time specified for the levy;
13 and
14 (iv) any other requirements under 15-10-425 and 20-20-201 for the calling of an election.
15 (b) Except as provided in subsection (4)(b), a building reserve tax authorization may not be for
16 more than 20 10 years.
17 (c) The election must be conducted in accordance with the school election laws of this title, and
18 the electors qualified to vote in the election must be qualified under the provisions of 20-20-301. The ballot for a
19 building reserve proposition must be substantially in compliance with 15-10-425.
20 (d) The building reserve proposition is approved if a majority of those electors voting at the election
21 approve the establishment of or addition to the building reserve. The annual budgeting and taxation authority of
22 the trustees for a building reserve is computed by dividing the total authorized amount by the specified number
23 of years. The authority of the trustees to budget and impose the taxation for the annual amount to be raised for
24 the building reserve lapses when, at a later time, a bond issue is approved by the qualified electors of the
25 district for the same purpose or purposes for which the building reserve fund of the district was established.
26 Whenever a subsequent bond issue is made for the same purpose or purposes of a building reserve, the
27 money in the building reserve must be used for the purpose or purposes before any money realized by the
28 bond issue is used.
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1 (3) (a) A subfund must be created to account for revenue and expenditures for school major
2 maintenance and repairs authorized under this subsection (3). The trustees of a district may authorize and
3 impose a levy of no more than 10 mills on the taxable value of all taxable property within the district for that
4 school fiscal year for the purposes of raising revenue for identified improvements or projects meeting the
5 requirements of 20-9-525(2). The 10-mill limit under this subsection (3) must be calculated using the district's
6 total taxable valuation most recently certified by the department of revenue under 15-10-202. The amount of
7 money raised by the levy, the deposits and transfers authorized under subsection (3)(f) of this section, and
8 anticipated state aid pursuant to 20-9-525(3) may not exceed the district's school major maintenance amount.
9 For the purposes of this section, the term "school major maintenance amount" means the sum of $15,000 and
10 the product of $110 multiplied by the district's budgeted ANB for the prior fiscal year. To authorize and impose a
11 levy under this subsection (3), the trustees shall:
12 (i) following public notice requirements pursuant to 20-9-116, adopt no later than March 31 of
13 each fiscal year a resolution:
14 (A) identifying the anticipated improvements or projects for which the proceeds of the levy, the
15 deposits and transfers authorized under subsection (3)(f) of this section, and anticipated state aid pursuant to
16 20-9-525(3) will be used; and
17 (B) estimating a total dollar amount of money to be raised by the levy, the deposits and transfers
18 authorized under subsection (3)(f) of this section, anticipated state aid pursuant to 20-9-525(3), and the
19 resulting estimated number of mills to be levied using the district's taxable valuation most recently certified by
20 the department of revenue under 15-10-202; and
21 (ii) include the amount of any final levy to be imposed as part of its final budget meeting noticed in
22 compliance with 20-9-131.
23 (b) Proceeds from the levy may be expended only for the purposes under 20-9-525(2), and the
24 expenditure of the money must be reported in the annual trustees' report a