Bill

Bill > HB865


MT HB865

Revise government entity limitations on property tax increases


summary

Introduced
03/25/2025
In Committee
03/26/2025
Crossed Over
Passed
Dead
05/20/2025

Introduced Session

2025 Regular Session

Bill Summary

AN ACT ENTITLED: “AN ACT GENERALLY REVISING PROPERTY TAXES; REVISING GOVERNMENTAL ENTITY LIMITS ON PROPERTY TAX INCREASES; INCREASING THE RATE OF INFLATION LIMITATION IMPOSED ON GOVERNMENTAL ENTITIES FOR CALCULATING PROPERTY TAX LEVIES; PROVIDING THAT A PORTION OF NEWLY TAXABLE PROPERTY IS SUBJECT TO THE MILL LEVY LIMITATION CALCULATION; PROVIDING THAT A LOCAL GOVERNMENT MAY CREATE A LARGE TAXPAYER RESERVE ACCOUNT; AMING SECTIONS 7-6-4431 AND 15-10-420, MCA; PROVIDING AN APPLICABILITY DATE.”

AI Summary

This bill revises how local governments in Montana can calculate and increase property tax levies, introducing several key changes. It allows cities, counties, and consolidated city-counties to establish a large taxpayer reserve account, which would require depositing 10% of revenue from newly taxable property annually. This account can only be used in specific circumstances, such as when a large taxpayer (defined as an entity among the top 20% of taxpayers by taxable value) permanently ceases operations or experiences a significant decrease in taxable value. The funds can then be used for purposes like paying outstanding bonds, decreasing mill levies, attracting new industry, providing employment incentives, or investing in infrastructure. The bill also modifies how governmental entities calculate their maximum mill levy, increasing the inflation limitation from one-half to the full average rate of inflation (not to exceed 4%) and changing how newly taxable property is factored into levy calculations. Specifically, governmental entities can now include different percentages of newly taxable value depending on whether they create a large taxpayer reserve account (50% inclusion) or not (40% inclusion). The changes will apply to property tax years beginning after December 31, 2025, providing local governments with new flexibility in managing property tax revenues and responding to significant changes in their tax base.

Committee Categories

Budget and Finance

Sponsors (1)

Last Action

(H) Died in Process (on 05/20/2025)

bill text


bill summary

Loading...

bill summary

Loading...
Loading...