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68th Legislature 2023 HB 960.1
1 HOUSE BILL NO. 960
2 INTRODUCED BY T. FRANCE, C. KNUDSEN, S. O'BRIEN
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT PROVIDING FOR THE CLASSIFICATION AND TAXATION OF
5 CERTAIN LAND AS RECREATIONAL LAND FOR PROPERTY TAX PURPOSES; PROVIDING THAT
6 CERTAIN CONTIGUOUS PARCELS ARE TAXED AS RECREATIONAL LAND UNLESS THE OWNER
7 SUBMITS DOCUMENTATION FOR AGRICULTURAL LAND CLASSIFICATION; PROVIDING THAT FEDERAL
8 ADJUSTED GROSS INCOME MAY NOT EXCEED A CERTAIN AMOUNT; PROVIDING FOR A RATE OF TAX
9 THAT IS HIGHER THAN THE RATE OF TAX FOR AGRICULTURAL LAND; PROVIDING DEFINITIONS;
10 AMENDING SECTIONS 15-6-134, 15-6-229, 15-7-102, 15-7-111, 15-7-202, 15-8-111, AND 15-18-219, MCA;
11 AND PROVIDING AN APPLICABILITY DATE.”
12
13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
14
15 NEW SECTION. Section 1. Class nineteen property -- description -- taxable percentage --
16 definitions. (1) Beginning January 1, 2025, class nineteen property includes contiguous parcels of land totaling
17 640 acres or more under one ownership that does not qualify for valuation, assessment, and taxation as
18 agricultural land each year under 15-7-202 because of the failure of the owner to satisfy the criteria in
19 subsection (2). Property that is classified under this section is referred to as recreational property.
20 (2) Class nineteen recreational property does not include property classified as forest land under
21 15-6-143 and property described in subsection (1) if:
22 (a) the owner applies to the department requesting classification of the parcel as agricultural under
23 15-7-202;
24 (b) the land is used primarily for raising and marketing products that are agricultural; and
25 (c) each owner has less than $200,000 in federal adjusted gross income.
26 (3) If a person is a shareholder, partner, or owner of an entity, partnership, or trust that owns the
27 land, then the federal gross income of each board member, shareholder, partner, or owner must be less than
28 $200,000.
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68th Legislature 2023 HB 960.1
1 (4) Class nineteen property is taxed at the rate of tax for class three property in 15-6-133(2) of its
2 productive capacity value multiplied by 7.
3 (5) For the purposes of this section, the following definitions apply:
4 (a) "Agricultural" has the meaning provided in 15-1-101.
5 (b) (i) "Agricultural production" means the business of agricultural production, as agricultural is
6 defined in this section, including silviculture that is reported on net farm income reports for tax purposes as
7 required by the United States internal revenue service.
8 (ii) The term does not include the business of processing, transporting, or marketing agricultural
9 products.
10 (c) "Marketing" has the meaning provided in 15-7-202(1)(c).
11
12 Section 2. Section 15-6-134, MCA, is amended to read:
13 "15-6-134. Class four property -- description -- taxable percentage. (1) Class four property
14 includes:
15 (a) subject to subsection (1)(e), all land, except that specifically included in another class;
16 (b) subject to subsection (1)(e):
17 (i) all improvements, including single-family residences, trailers, manufactured homes, or mobile
18 homes used as a residence, except those specifically included in another class;
19 (ii) appurtenant improvements to the residences, including the parcels of land upon which the
20 residences are located and any leasehold improvements;
21 (iii) vacant residential lots; and
22 (iv) rental multifamily dwelling units.
23 (c) all improvements on land that is eligible for valuation, assessment, and taxation as agricultural
24 land under 15-7-202 or recreational property under [section 1], including 1 acre of real property beneath
25 improvements on land described in 15-6-133(1)(c) or [section 1]. The 1 acre must be valued at market value.
26 (d) 1 acre of real property beneath an improvement used as a residence on land eligible for
27 valuation, assessment, and taxation as forest land under 15-6-143. The 1 acre must be valued at market value.
28 (e) all commercial and industrial property, as defined in 15-1-101, and including:
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68th Legislature 2023 HB 960.1
1 (i) all commercial and industrial property that is used or owned by an individual, a business, a
2 trade, a corporation, a limited liability company, or a partnership and that is used primarily for the production of
3 income;
4 (ii) all golf courses, including land and improvements actually and necessarily used for that
5 purpose, that consist of at least nine holes and not less than 700 lineal yards;
6 (iii) commercial buildings and parcels of land upon which the buildings are situated; and
7 (iv) vacant commercial lots.
8 (2) If a property includes both residential and commercial uses, the property is classified and
9 appraised as follows:
10 (a) the land use with the highest percentage of total value is the use that is assigned to the
11 property; and
12 (b) the improvements are apportioned according to the use of the improvements.
13 (3) (a) Except as provided in 15-24-1402, 15-24-1501, 15-24-1502, and subsection (3)(b), class
14 four residential property described in subsections (1)(a) through (1)(d) of this section is taxed at 1.35% of
15 market value.
16 (b) The tax rate for the portion of the market value of a single-family residential dwelling in excess
17 of $1.5 million is the residential property tax rate in subsection (3)(a) multiplied by 1.4.
18 (c) The tax rate for commercial property is the residential property tax rate in subsection (3)(a)
19 multiplied by 1.4.
20 (4) Property described in subsection (1)(e)(ii) is taxed at one-half the tax rate established in
21 subsection (3)(c)."
22
23 Section 3. Section 15-6-229, MCA, is amended to read:
24 "15-6-229. Exemption for land adjacent to transmission line right-of-way easement --
25 application -- limitations. (1) Subject to the conditions of this section, for tax years beginning after December
26 31, 2007, there is allowed an exemption from property taxes for land that is within 660 feet on either side of the
27 midpoint of a transmission line right-of-way or easement.
28 (2) (a) An owner or operator of a transmission line shall apply to the department for an exemption
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68th Legislature 2023 HB 960.1
1 under this section on a form provided by the department. The application must include a legal description and a
2 digitized certificate of survey prepared by a surveyor registered with the board of professional engineers and
3 professional land surveyors provided for in 2-15-1763 of the property in the county for which the exemption is
4 sought and other information required by the department. A separate application must be made for each county
5 in which an exemption is sought.
6 (b) An application for an exemption that would be in effect for the tax year and subsequent tax
7 years must be filed with the department by March 1 in the tax year that the exemption is sought.
8 (3) (a) The owner or operator of a transmission line shall inform the department of any change in
9 ownership of the land or other circumstances that may affect the eligibility of the land for the exemption. The
10 department shall determine whether any changes have occurred that affect the eligibility of the land for the
11 exemption.
12 (b) The exemption allowed under this section does not apply to:
13 (i) the boundaries of an incorporated or unincorporated city or town;
14 (ii) a platted and filed subdivision;
15 (iii) tracts of land used for residential, commercial, or industrial purposes; or
16 (iv) the 1 acre of land beneath improvements on land described in 15-6-133(1)(c), [section 1], and
17 15-7-206(2).
18 (4) For the purposes of this section, "transmission line" means an electric line with a design
19 capacity of 30 megavoltamperes or greater that is constructed after January 1, 2007."
20
21 Section 4. Section 15-7-102, MCA, is amended to read:
22 "15-7-102. Notice of classification, market value, and taxable value to owners -- appeals. (1) (a)
23 Except as provided in 15-7-138, the department shall mail or provide electronically to each owner or purchaser
24 under contract for deed a notice that includes the land classification, market value, and taxable value of the
25 land and improvements owned or being purchased. A notice must be mailed or, with property owner consent,
26 provided electronically to the owner only if one or more of the following changes pertaining to the land or
27 improvements have been made since the last notice:
28 (i) change in ownership;
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1 (ii) change in classification;
2 (iii) change in valuation; or
3 (iv) addition or subtraction of personal property affixed to the land.
4 (b) The notice must include the following for the taxpayer's informational and informal classification
5 and appraisal review purposes:
6 (i) a notice of the availability of all the property tax assistance programs available to property
7 taxpayers, including the intangible land value assistance program provided for in 15-6-240, the property tax
8 assistance programs provided for in Title 15, chapter 6, part 3, and the residential property tax credit for the
9 elderly provided for in 15-30-2337 through 15-30-2341;
10 (ii) the total amount of mills levied against the property in the prior year;
11 (iii) the market value for the prior reappraisal cycle;
12 (iv) if the market value has increased by more than 10%, an explanation for the increase in
13 valuation;
14 (v) a statement that the notice is not a tax bill; and
15 (vi) a taxpayer option to request an informal classification and appraisal review by checking a box
16 on the notice and returning it to the department.
17 (c) When the department uses an appraisal method that values land and improvements as a unit,
18 including the sales comparison approach for residential condominiums or the income approach for commercial
19 property, the notice must contain a combined appraised value of land and improvements.
20 (d) Any misinformation provided in the information required by subsection (1)(b) does not affect the
21 validity of the notice and may not be used as a basis for a challenge of the legality of the notice.
22 (2) (a) Except as provided in subsection (2)(c), the department shall assign each classification and
23 appraisal to the correct owner or purchaser under contract for deed and mail or provide electronically the notice
24 in written or electronic form, adopted by the department, containing sufficient information in a comprehensible
25 manner designed to fully inform the taxpayer as to the classification and appraisal of the property and of
26 changes over the prior tax year.
27 (b) The notice must advise the taxpayer that in order to be eligible for a refund of taxes from an
28 appeal of the classification or appraisal, the taxpayer is required to pay the taxes under protest as provided in
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68th Legislature 2023 HB 960.1
1 15-1-402.
2 (c) The department is not required to mail or provide electronically the notice to a new owner or
3 purchaser under contract for deed unless the department has received the realty transfer certificate from the
4 clerk and recorder as provided in 15-7-304 and has processed the certificate before the notices required by
5 subsection (2)(a) are mailed or provided electronically. The department shall notify the county tax appeal board
6 of the date of the mailing or the date when the taxpayer is informed the information is available electronically.
7 (3) (a) If the owner of any land and improvements is dissatisfied with the appraisal as it reflects the
8 market value of the property as determined by the department or with the classification of the land or
9 improvements, the owner may request an informal classification and appraisal review by submitting an
10 objection on written or electronic forms provided by the department for that purpose or by checking a box on the
11 notice and returning it to the department in a manner prescribed by the department.
12 (i) For property other than class three property described in 15-6-133, class four property
13 described in 15-6-134, and class ten property described in 15-6-143, and class nineteen property described in
14 [section 1], the objection must be submitted within 30 days from the date on the notice.
15 (ii) For class three property described in 15-6-133, and class four property described in 15-6-134,
16 and class nineteen property described in [section 1], the objection may be made only once each valuation
17 cycle. An objection must be made in writing or by checking a box on the notice within 30 days from the date on
18 the classification and appraisal notice for a reduction in the appraised value to be considered for both years of
19 the 2-year valuation cycle. An objection made more than 30 days from the date of the classification and
20 appraisal notice will be applicable only for the second year of the 2-year valuation cycle. For an objection to
21 apply to the second year of the valuation cycle, the taxpayer shall make the objection in writing or by checking a
22 box on the notice no later than June 1 of the second year of the valuation cycle or, if a classification and
23 appraisal notice is received in the second year of the valuation cycle, within 30 days from the date on the
24 notice.
25 (iii) For class ten property described in 15-6-143, the objection may be made at any time but only
26 once each valuation cycle. An objection must be made in writing or by checking a box on the notice within 30
27 days from the date on the classification and appraisal notice for a reduction in the appraised value to be
28 considered for all years of the 6-year appraisal cycle. An objection made more than 30 days after the date of
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68th Legislature 2023 HB 960.1
1 the classification and appraisal notice applies only for the subsequent remaining years of the 6-year reappraisal
2 cycle. For an objection to apply to any subsequent year of the valuation cycle, the taxpayer shall make the
3 objection in writing or by checking a box on the notice no later than June 1 of the year for which the value is
4 being appealed or, if a classification and appraisal notice is received after the first year of the valuation cycle,
5 within 30 days from the date on the notice.
6 (b) If the objection relates to residential or commercial property and the objector agrees to the
7 confidentiality requirements, the department shall provide to the objector, by posted mail or electronically, within
8 8 weeks of submission of the objection, the following information:
9 (i) the methodology and sources of data used by the department in the valuation of the property;
10 and
11 (ii) if the department uses a blend of evaluations developed from various sources, the reasons that
12 the methodology was used.
13 (c) At the request of the objector or a representative of the objector, and only if the objector or
14 representative signs a written or electronic confidentiality agreement, the department shall provide in written or
15 electronic form:
16 (i) comparable sales data used by the department to value the property;
17 (ii) sales data used by the department to value residential property in the property taxpayer's
18 market model area; and
19 (iii) if the cost approach was used by the department to value residential property, the
20 documentation required in 15-8-111(3) regarding why the comparable sales approach was not reliable.
21 (d) For properties valu