_________ Bill No. _______

Introduced By _______________________________________________________________________________

A Bill for an Act entitled: "An Act extending the residential property tax credit for the elderly to include special assessments and fees levied against the homestead in the definition of "property tax paid" that is subject to the credit; amending section

15-30-171, MCA; and providing an immediate effective date and a retroactive applicability date."

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 15-30-171, MCA, is amended to read:

"15-30-171.   Residential property tax credit for elderly -- definitions. As used in 15-30-171 through 15-30-179, the following definitions apply:

(1)  "Claim period" means the tax year for individuals required to file Montana individual income tax returns and the calendar year for individuals not required to file returns.

(2)  "Claimant" means an individual natural person who is eligible to file a claim under 15-30-172.

(3)  "Department" means the department of revenue provided for in 2-15-1301.

(4)  "Gross household income" means all income received by all individuals of a household while they are members of the household.

(5)  "Gross rent" means the total rent in cash or its equivalent actually paid during the claim period by the renter or lessee for the right of occupancy of the homestead pursuant to an arm's-length transaction with the landlord.

(6)  "Homestead" means:

(a)  a single-family dwelling or unit of a multiple-unit dwelling that is subject to ad valorem taxes in Montana and as much of the surrounding land, but not in excess of 1 acre, as is reasonably necessary for its use as a dwelling; or

(b)  a single-family dwelling or unit of a multiple-unit dwelling that is rented from a county or municipal housing authority as provided in Title 7, chapter 15.

(7)  "Household" means an association of persons who live in the same dwelling, sharing its furnishings, facilities, accommodations, and expenses. The term does not include bona fide lessees, tenants, or roomers and boarders on contract.

(8)  "Household income" means $0 or the amount obtained by subtracting the greater of $4,000 or 50% of total retirement benefits from gross household income, whichever is greater.

(9)  "Income" means federal adjusted gross income, without regard to loss, as that quantity is defined in the Internal Revenue Code of the United States, plus all nontaxable income, including but not limited to:

(a)  the gross amount of any pension or annuity (including Railroad Retirement Act benefits and veterans' disability benefits);

(b)  the amount of capital gains excluded from adjusted gross income;

(c)  alimony;

(d)  support money;

(e)  nontaxable strike benefits;

(f)  cash public assistance and relief;

(g)  payments and interest on federal, state, county, and municipal bonds; and

(h)  all payments received under federal social security except social security income paid directly to a nursing home.

(10) "Property tax paid" means itemized service fees collected by the county pursuant to 15-16-101 and general ad valorem taxes and special assessments levied against the homestead, exclusive of special assessments, penalties, or interest, and paid during the claim period.

(11) "Rent-equivalent tax paid" means 15% of the gross rent."

NEW SECTION. Section 2.  Effective date -- retroactive applicability. [This act] is effective on passage and approval and applies retroactively, within the meaning of 1-2-109, to income tax years beginning after December 31, 1996, and applies to special assessments and fees paid after December 31, 1996.

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