HB 483: Revise laws to reduce property taxes while preserving the current 95 school equalization mills - Montana

HB0483_X(15).pdf → HB0483_X(16).pdf · 2 edits

MINOR

The bill modifies the formula used to calculate the maximum property tax levy for governmental entities, shifting the calculation from the prior year's assessed tax amount to the current year's actually assessed tax amount. It also updates the rules for reporting tax increment financing (TIF) values when a district terminates, ensuring they are reported in the correct year based on certification timing rather than termination timing. These changes aim to align levy calculations more closely with current property assessments and clarify reporting timelines for TIF districts.

Scope change

The scope of the levy calculation formula has been adjusted to reflect current year assessments instead of prior year assessments, and the applicability of TIF reporting rules has been refined based on certification dates.

REQUIREMENT

The formula for determining the maximum number of mills a governmental entity can impose now uses the amount of property tax actually assessed in the current year, rather than the amount assessed in the prior year.

Reporting of tax increment financing values for terminated districts is now based on when taxable values are certified, ensuring the value is reported in the year of certification rather than the year of termination.

HB0483_X(3).pdf → HB0483_X(4).pdf · 4 edits

MODERATE

HB 483 fundamentally rewrites the procedure for calculating property tax levies to protect taxpayers from sudden tax spikes after property reappraisals. The bill introduces a formula that limits new tax rates based on prior year taxes plus half the average inflation rate, effectively capping annual tax increases. It also clarifies rules for 'newly taxable' property and restricts how local governments can adjust mill levies to account for lost tax bases.

Scope change

The bill expands the scope of protection to include all governmental entities authorized to impose mills, not just schools, and clarifies the treatment of tax increment financing districts.

FISCAL

Replaced the previous tax calculation method with a new formula that caps the mill levy at the prior year's tax amount plus 50% of the average inflation rate over the last three years.

REQUIREMENT

Added specific rules for how 'newly taxable' property (from annexation, construction, or subdivision) is valued and treated in the tax calculation to prevent immediate tax jumps.

ELIGIBILITY

Restricted the ability of local governments to increase mill levies to cover losses in tax base caused by legislative actions that are reimbursed by the state.

TECHNICAL

Reorganized and clarified the definitions of newly taxable property and the specific circumstances under which tax increment financing districts are included or excluded from calculations.

HB0483_X(2).pdf → HB0483_X(3).pdf · 1 edit

MINOR

A minor punctuation adjustment was made to a sentence regarding property tax reappraisal. The change adds a period at the end of a clause ensuring 'taxable value neutrality' for each property class, correcting a formatting inconsistency from the previous version.

TECHNICAL

Added a missing period to the end of a sentence describing the department's requirement to maintain taxable value neutrality across all property classes.

HB0483_2(14).pdf → HB0483_X.pdf · 4 edits

MODERATE

The bill revises school funding laws to mitigate the financial impact of property tax reappraisals. Key changes include mandating that specific property classes (3, 4, and 10) be revalued every two years instead of annually, while other property is revalued yearly. It also updates the formula for calculating property tax levies to include inflation adjustments and clarifies what constitutes 'newly taxable property' for funding purposes.

Scope change

The bill modifies the reappraisal frequency for specific property classes and expands the definition of newly taxable property to include annexations, thereby altering how school funding is calculated and distributed.

TIMELINE

Changed the reappraisal schedule so that Class 3, 4, and 10 property is revalued every two years, whereas all other property must be revalued annually.

REQUIREMENT

Updated the levy calculation formula to require adding one-half of the average inflation rate over the prior three years to the prior year's tax assessment.

Required the department to publish reappraisal information in county newspapers every even-numbered year by the second Monday in October.

DEFINITION

Added 'annexation of real property and improvements' to the definition of newly taxable property, ensuring these properties are included in funding calculations.

HB0483_2(3).pdf → HB0483_2(4).pdf · 4 edits

MODERATE

This bill updates the state's property tax reappraisal schedule and levy calculation rules. It mandates that specific property classes (3, 4, and 10) be revalued every two years instead of annually, while other property remains on an annual cycle. Additionally, it introduces a new mechanism allowing local governments to carry forward unused mill levy authority to future years if they do not impose the maximum allowed rate.

Scope change

The reappraisal frequency for specific property classes changed from annual to biennial, and the scope of levy authority now includes the ability to carry forward unused millage.

TIMELINE

Changed the reappraisal cycle for Class 3, Class 4, and Class 10 property from annual to every two years, effective starting January 1, 2024.

REQUIREMENT

Added a requirement for the Department of Revenue to provide a report to the Education Interim Budget Committee on how reappraisals impact school funding and guaranteed tax base calculations.

Updated the notice requirements for taxpayers to include specific data on the Consumer Price Index adjusted for population and the average annual growth rate of Montana personal income.

FISCAL

Added a new provision allowing local governmental entities to carry forward unused mill levy authority to subsequent tax years if they do not impose the maximum authorized rate.

HB0483_1(5).pdf → HB0483_2.pdf · 3 edits

MINOR

This bill amends the reappraisal schedule for specific property classes (3, 4, and 10) to require revaluation every two years instead of annually, while maintaining annual revaluation for all other property. It also updates the reporting requirements for the Department of Revenue and Office of Public Instruction to focus on collaborating to mitigate the impacts of reappraisal on school funding. Additionally, the bill revises the calculation method for property tax levies to include adjustments based on the Consumer Price Index.

Scope change

The reappraisal frequency for Class 3, 4, and 10 property changed from annual to a two-year cycle, affecting how often these properties are reassessed for tax purposes.

TIMELINE

Changed the reappraisal cycle for Class 3, 4, and 10 property from every year to every two years.

REQUIREMENT

Updated reporting duties to require the Department of Revenue and Office of Public Instruction to collaborate and report on mitigating reappraisal impacts on school funding.

DEFINITION

Revised the formula for calculating property tax levies to explicitly include adjustments based on the Consumer Price Index.

LC3189.pdf → HB0483_1.pdf · 2 edits

MINOR

The bill was renumbered from LC 3189 to HB 483.1 and the list of sponsors was updated to reflect the current legislative session. The substantive policy text regarding property tax reappraisal cycles, levy calculation procedures, and reporting requirements remains unchanged, though the formatting of the bill header and sponsor information was modified to align with standard House Bill formatting.

Scope change

The scope of the legislation remains the same; only the bill number and sponsor list were updated to reflect the current legislative session.

TECHNICAL

The bill number was changed from LC 3189 to HB 483.1, and the list of sponsors was updated to include current legislators.

The header and introductory text were reformatted to match standard House Bill formatting conventions.

Revise laws to reduce property taxes while preserving the current 95 school equalization mills

What changed between versions

How they voted

Actions timeline

Sponsors