67th Legislature SB 133.1
1 SENATE BILL NO. 133
2 INTRODUCED BY G. HERTZ
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT REVISING THE PROPERTY TAX APPRAISAL PROCESS AND
5 PROPERTY TAX APPEALS; PROVIDING FOR THE ASSESSMENT OF ATTORNEY FEES AGAINST THE
6 DEPARTMENT OF REVENUE WHEN CERTAIN TAXPAYERS PREVAIL IN A PROPERTY TAX DISPUTE;
7 REQUIRING THE DEPARTMENT OF REVENUE TO JUSTIFY USAGE OF THE COST APPROACH WHEN
8 VALUING RESIDENTIAL CLASS FOUR PROPERTY; CLARIFYING THAT A TAXPAYER MAY REFUSE TO
9 ALLOW THE DEPARTMENT TO ENTER INTO CERTAIN STRUCTURES DURING AN APPRAISAL;
10 AMENDING SECTIONS 15-1-222, 15-2-201, 15-2-306, 15-7-102, 15-7-139, AND 15-8-111, MCA; AND
11 PROVIDING AN APPLICABILITY DATE.”
12
13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
14
15 Section 1. Section 15-1-222, MCA, is amended to read:
16 "15-1-222. Taxpayer bill of rights. The department of revenue shall in the course of performing its
17 duties in the administration and collection of the state's taxes ensure that:
18 (1) the taxpayer has the right to record any interview, meeting, or conference with auditors or any
19 other representatives of the department;
20 (2) the taxpayer has the right to hire a representative of the taxpayer's choice to represent the
21 taxpayer's interests before the department or any tax appeal board. The taxpayer has a right to obtain a
22 representative at any time, except that the selection of a representative may not be used to unreasonably delay
23 a field audit that is in progress. The representative must have written authorization from the taxpayer to receive
24 from the department confidential information concerning the taxpayer. The department shall provide copies to
25 the authorized representative of all information sent to the taxpayer and shall notify the authorized
26 representative concerning contacts with the taxpayer.
27 (3) except as provided in subsection (5), the taxpayer has the right to be treated by the department in
28 a similar manner as all similarly situated taxpayers regarding the administration and collection of taxes,
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1 imposition of penalties and interest, and available taxpayer remedies unless there is a rational basis for the
2 department to distinguish them;
3 (4) the taxpayer has the right to obtain tax advice from the department. The taxpayer has a right to
4 the waiver of penalties and interest, but not taxes, when the taxpayer has relied on written advice provided to
5 the taxpayer by an employee of the department.
6 (5) at the discretion of the department, upon consideration of all facts relevant to the specific
7 taxpayer, the taxpayer has the right to pay delinquent taxes, interest, and penalties on an installment basis.
8 This subsection applies only to taxes collected by the department, provided the taxpayer meets reasonable
9 criteria.
10 (6) the taxpayer has the right to a complete and accurate written description of the basis for any
11 additional tax assessed by the department;
12 (7) the taxpayer has the right to a review by management level employees of the department for any
13 additional taxes assessed by the department;
14 (8) the taxpayer has the right to a full explanation of the available procedures for review and appeal of
15 additional tax assessments;
16 (9) the taxpayer, after the exhaustion of all appropriate administrative remedies, has the right to have
17 the state tax appeal board or a court, or both, review any final decision of the department assessing an
18 additional tax. The taxpayer shall seek a review in a timely manner. A taxpayer is entitled to collect court costs
19 and attorney fees from the department for frivolous or bad faith lawsuits as provided in 25-10-711, and lawsuits
20 pertaining to an appeal of the value of class four residential property in which the taxpayer prevails, as provided
21 in 15-2-306.
22 (10) the taxpayer has the right to expect that the department will adhere to the same tax appeal
23 deadlines as are required of the taxpayer unless otherwise provided by law;
24 (11) the taxpayer has the right to a full explanation of the department's authority to collect delinquent
25 taxes, including the procedures and notices that are required to protect the taxpayer;
26 (12) the taxpayer has the right to have certain property exempt from levy and seizure as provided in
27 Title 25, chapter 13, part 6, and any other applicable provisions in Montana law;
28 (13) the taxpayer has the right to the immediate release of any lien the department has placed on
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1 property when the tax is paid or when the lien is the result of an error by the department;
2 (14) the taxpayer has the right to assistance from the department in complying with state and local tax
3 laws that the department administers; and
4 (15) the taxpayer has the right to be guaranteed that an employee of the department is not paid,
5 promoted, or in any way rewarded on the basis of assessments or collections from taxpayers."
6
7 Section 2. Section 15-2-201, MCA, is amended to read:
8 "15-2-201. Powers and duties. (1) It is the duty of the state tax appeal board to:
9 (a) prescribe rules for the tax appeal boards of the different counties in the performance of their duties
10 and for this purpose may schedule meetings of county tax appeal boards, and it is the duty of all invited county
11 tax appeal board members to attend if possible, and the cost of their attendance must be paid from the
12 appropriation of the state tax appeal board;
13 (b) grant, at its discretion, whenever good cause is shown and the need for the hearing is not
14 because of taxpayer negligence, permission to a county tax appeal board to meet beyond the normal time
15 period provided for in 15-15-101(4) to hear an appeal;
16 (c) hear appeals from decisions of the county tax appeal boards and assess attorney fees against the
17 department when a taxpayer prevails on the merits of an appeal of the value of class four residential property;
18 (d) hear appeals from decisions of the department of revenue in regard to business licenses, property
19 assessments, taxes, except determinations that an employer-employee relationship existed between the
20 taxpayer and individuals subjecting the taxpayer to the requirements of chapter 30, part 25, and penalties.
21 (2) Oaths to witnesses in any investigation by the state tax appeal board may be administered by a
22 member of the board or the member's agent. If a witness does not obey a summons to appear before the board
23 or refuses to testify or answer any material questions or to produce records, books, papers, or documents when
24 required to do so, that failure or refusal must be reported to the attorney general, who shall thereupon institute
25 proceedings in the proper district court to punish the witness for the neglect or refusal. A person who testifies
26 falsely in any material matter under consideration by the board is guilty of perjury and punished accordingly.
27 Witnesses attending shall receive the same compensation as witnesses in the district court. The compensation
28 must be charged to the proper appropriation for the board.
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1 (3) The state tax appeal board also has the duties of an appeal board relating to other matters as may
2 be provided by law."
3
4 Section 3. Section 15-2-306, MCA, is amended to read:
5 "15-2-306. Board may shall order refund. (1) In any appeal before the state tax appeal board when
6 a taxpayer has paid property taxes or fees under written protest and the taxes or fees are held by the treasurer
7 of a unit of local government in a protest fund, the state tax appeal board shall enter judgment, exclusive of
8 costs, if the board finds that the property taxes or fees should be refunded.
9 (2) In addition to costs and attorney fees permitted under 25-10-711, the board shall award costs and
10 reasonable attorney fees as determined by the board from the department to a taxpayer that prevails on the
11 merits of an appeal of the value of class four residential property.
12 (2)(3) The state tax appeal board's judgment issued pursuant to subsection subsections (1) and (2)
13 must be held in abeyance:
14 (a) until the time period for appeal has passed; or
15 (b) if the final decision of the state tax appeal board has been appealed in accordance with 15-2-303."
16
17 Section 4. Section 15-7-102, MCA, is amended to read:
18 "15-7-102. Notice of classification, market value, and taxable value to owners -- appeals. (1) (a)
19 Except as provided in 15-7-138, the department shall mail or provide electronically to each owner or purchaser
20 under contract for deed a notice that includes the land classification, market value, and taxable value of the
21 land and improvements owned or being purchased. A notice must be mailed or, with property owner consent,
22 provided electronically to the owner only if one or more of the following changes pertaining to the land or
23 improvements have been made since the last notice:
24 (i) change in ownership;
25 (ii) change in classification;
26 (iii) change in valuation; or
27 (iv) addition or subtraction of personal property affixed to the land.
28 (b) The notice must include the following for the taxpayer's informational and informal classification
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1 and appraisal review purposes:
2 (i) a notice of the availability of all the property tax assistance programs available to property
3 taxpayers, including the intangible land value assistance program provided for in 15-6-240, the property tax
4 assistance programs provided for in Title 15, chapter 6, part 3, and the residential property tax credit for the
5 elderly provided for in 15-30-2337 through 15-30-2341;
6 (ii) the total amount of mills levied against the property in the prior year;
7 (iii) a statement that the notice is not a tax bill; and
8 (iv) a taxpayer option to request an informal classification and appraisal review by checking a box on
9 the notice and returning it to the department.
10 (c) When the department uses an appraisal method that values land and improvements as a unit,
11 including the sales comparison approach for residential condominiums or the income approach for commercial
12 property, the notice must contain a combined appraised value of land and improvements.
13 (d) Any misinformation provided in the information required by subsection (1)(b) does not affect the
14 validity of the notice and may not be used as a basis for a challenge of the legality of the notice.
15 (2) (a) Except as provided in subsection (2)(c), the department shall assign each classification and
16 appraisal to the correct owner or purchaser under contract for deed and mail or provide electronically the notice
17 in written or electronic form, adopted by the department, containing sufficient information in a comprehensible
18 manner designed to fully inform the taxpayer as to the classification and appraisal of the property and of
19 changes over the prior tax year.
20 (b) The notice must advise the taxpayer that in order to be eligible for a refund of taxes from an
21 appeal of the classification or appraisal, the taxpayer is required to pay the taxes under protest as provided in
22 15-1-402.
23 (c) The department is not required to mail or provide electronically the notice to a new owner or
24 purchaser under contract for deed unless the department has received the realty transfer certificate from the
25 clerk and recorder as provided in 15-7-304 and has processed the certificate before the notices required by
26 subsection (2)(a) are mailed or provided electronically. The department shall notify the county tax appeal board
27 of the date of the mailing or the date when the taxpayer is informed the information is available electronically.
28 (3) (a) If the owner of any land and improvements is dissatisfied with the appraisal as it reflects the
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1 market value of the property as determined by the department or with the classification of the land or
2 improvements, the owner may request an informal classification and appraisal review by submitting an
3 objection on written or electronic forms provided by the department for that purpose or by checking a box on the
4 notice and returning it to the department in a manner prescribed by the department.
5 (i) For property other than class three property described in 15-6-133, class four property described in
6 15-6-134, and class ten property described in 15-6-143, the objection must be submitted within 30 days from
7 the date on the notice.
8 (ii) For class three property described in 15-6-133 and class four property described in 15-6-134, the
9 objection may be made only once each valuation cycle. An objection must be made in writing or by checking a
10 box on the notice within 30 days from the date on the classification and appraisal notice for a reduction in the
11 appraised value to be considered for both years of the 2-year valuation cycle. An objection made more than 30
12 days from the date of the classification and appraisal notice will be applicable only for the second year of the 2-
13 year valuation cycle. For an objection to apply to the second year of the valuation cycle, the taxpayer must
14 make the objection in writing or by checking a box on the notice no later than June 1 of the second year of the
15 valuation cycle or, if a classification and appraisal notice is received in the second year of the valuation cycle,
16 within 30 days from the date on the notice.
17 (iii) For class ten property described in 15-6-143, the objection may be made at any time but only once
18 each valuation cycle. An objection must be made in writing or by checking a box on the notice within 30 days
19 from the date on the classification and appraisal notice for a reduction in the appraised value to be considered
20 for all years of the 6-year appraisal cycle. An objection made more than 30 days after the date of the
21 classification and appraisal notice applies only for the subsequent remaining years of the 6-year reappraisal
22 cycle. For an objection to apply to any subsequent year of the valuation cycle, the taxpayer must make the
23 objection in writing or by checking a box on the notice no later than June 1 of the year for which the value is
24 being appealed or, if a classification and appraisal notice is received after the first year of the valuation cycle,
25 within 30 days from the date on the notice.
26 (b) If the objection relates to residential or commercial property and the objector agrees to the
27 confidentiality requirements, the department shall provide to the objector, by posted mail or electronically, within
28 8 weeks of submission of the objection, the following information:
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1 (i) the methodology and sources of data used by the department in the valuation of the property; and
2 (ii) if the department uses a blend of evaluations developed from various sources, the reasons that the
3 methodology was used.
4 (c) At the request of the objector, and only if the objector signs a written or electronic confidentiality
5 agreement, the department shall provide in written or electronic form:
6 (i) comparable sales data used by the department to value the property; and
7 (ii) sales data used by the department to value residential property in the property taxpayer's market
8 model area; and
9 (iii) if the cost approach was used by the department to value residential property, the documentation
10 required in 15-8-111(3) regarding why the comparable sales approa