SENATE BILL NO. 61

INTRODUCED BY A. ELLIS, J. HARP, L. GROSFIELD, F. THOMAS, J. HERTEL, R. JABS, W. MCNUTT, K. MESAROS, G. DEVLIN, R. DEPRATU, J. WELLS, M. TAYLOR, E. EKEGREN, M. COLE, J. BOHLINGER

BY REQUEST OF THE INTERIM PROPERTY TAX COMMITTEE

A BILL FOR AN ACT ENTITLED: "AN ACT SUBMITTING TO THE QUALIFIED ELECTORS OF MONTANA AN AMENDMENT TO ARTICLE VIII, SECTION 3, OF THE MONTANA CONSTITUTION TO ALLOW EQUALIZATION OF PROPERTY VALUES FOR PROPERTY TAX PURPOSES TO BE BASED ON CLASSIFICATION AND ON ACQUISITION VALUES OF THE GENERAL RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL PROPERTY CLASS AND TO ALLOW LIMITS TO CHANGES IN THE VALUATION OF CERTAIN PROPERTY FOR TAX PURPOSES, IF PROVIDED BY LAW, TO A MAXIMUM OF 1 PERCENT A YEAR; AND PROVIDING AN EFFECTIVE DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Article VIII, section 3, of The Constitution of the State of Montana is amended to read:

"Section 3. Property tax administration. (1) (a) Subject to the provisions of subsections (1)(b) and (2), the state shall appraise, assess, and equalize the valuation of all property which is to be taxed in the manner provided by law.

(b) Equalized valuation may be achieved through the classification of property and may be based on acquisition value.

(2) (a) The value, for property tax purposes, of property in the class of property consisting primarily of residential property and commercial and industrial property that is not continuous property used in a commercial or industrial operation in more than one county or more than one state that is subject to central state assessment and apportionment of taxable value to the counties in which it is located may, by law, be based on the acquisition value of the property.

(b) If the acquisition method of valuation is used for property tax purposes for property in the general residential, commercial, and industrial class , the annual change in the value of an individual property may not exceed the lesser of inflation as measured by the consumer price index (1967 = 100) or 1% unless, as provided by law:

(i) the ownership of the property changes; or

(ii) the character of the property changes due to use, classification or reclassification, addition, remodeling, improvement, or destruction.

(c) If any of the conditions described in subsection (2)(b)(i) or (2)(b)(ii) occurs, the value of the property for property tax purposes may change in any year by more than the general limit established in subsection (2)(b)."

NEW SECTION. Section 2. Transition. If acquisition valuation is adopted as the method of valuation for property tax purposes, the legislature shall determine, by law, the base year value for property subject to acquisition valuation for property tax purposes. The base year value must be based on an adjustment to market value that has been adopted by the legislature.

NEW SECTION. Section 3. Effective date. If approved by the electorate, this amendment is effective January 1, 2001.

NEW SECTION. Section 4. Submission to electorate. This amendment shall be submitted to the qualified electors of Montana at the general election to be held in November 2000 by printing on the ballot the full title of this act and the following:

[]	FOR allowing property values for taxes to be based on acquisition value and allowing a maximum annual change of 1% in valuation for tax purposes.

[]	AGAINST allowing property values for taxes to be based on acquisition value and allowing a maximum annual change of 1% in valuation for tax purposes.

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