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SENATE BILL NO. 92
INTRODUCED BY DOHERTY S
BY REQUEST OF THE INTERIM PROPERTY TAX COMMITTEE
A BILL FOR AN ACT ENTITLED: "AN ACT INCREASING THE INCOME THRESHOLDS FOR ELIGIBILITY UNDER THE PROPERTY TAX ASSISTANCE PROGRAM; AMENDING THE DEFINITION OF "GROSS HOUSEHOLD INCOME" TO EXCLUDE THE GROSS AMOUNT OF ANY PENSION OR ANNUITY, RAILROAD RETIREMENT ACT BENEFITS, AND ALL PAYMENTS RECEIVED UNDER FEDERAL SOCIAL SECURITY; AMENDING THE DEFINITION OF "INCOME" TO EXCLUDE THE GROSS AMOUNT OF ANY PENSION OR ANNUITY, RAILROAD RETIREMENT ACT BENEFITS, AND ALL PAYMENTS RECEIVED UNDER FEDERAL SOCIAL SECURITY; ADJUSTING THE ELDERLY RESIDENTIAL PROPERTY TAX CREDIT MULTIPLIER; AMENDING SECTIONS 15-6-134, 15-30-171, AND 15-30-176, 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 15-6-134, MCA, is amended to read:
"15-6-134. Class four property -- description -- taxable percentage. (1) Class four property includes:
(a) all land, except that specifically included in another class;
(b) all improvements, including trailers, manufactured homes, or mobile homes used as a residence, except those specifically included in another class;
(c) the first $100,000 or less of the market value of any improvement on real property, including trailers, manufactured
homes, or mobile homes, and appurtenant land not exceeding 5 acres owned or under contract for deed and actually
occupied for at least 7 months a year as the primary residential dwelling of any person whose total income from all sources,
including net business income and otherwise tax-exempt income of all types but not including social security income paid
directly to a nursing home, is not more than
$15,000 $22,500 for a single person or $20,000 $27,500 for a married couple
or a head of household, as adjusted according to subsection (2)(b)(ii). For the purposes of this subsection (1)(c), net
business income is gross income less ordinary operating expenses but before deducting depreciation or depletion allowance,
(d) all golf courses, including land and improvements actually and necessarily used for that purpose, that consist of at least nine holes and not less than 3,000 lineal yards; and
(e) all improvements on land that is eligible for valuation, assessment, and taxation as agricultural land under 15-7-202, including 1 acre of real property beneath improvements on land described in 15-6-133(1)(c). The 1 acre must be valued at market value.
(2) Class four property is taxed as follows:
(a) (i) Except as provided in 15-24-1402 or 15-24-1501 and subsection (2)(a)(ii) of this section, property described in subsections (1)(a), (1)(b), and (1)(e) of this section is taxed at 3.86% of its market value.
(ii) The taxable percentage rate in subsection (2)(a)(i) must be adjusted downward by subtracting 0.022 percentage points each year until the tax rate is equal to or less than 2.78%.
(b) (i) Property qualifying under the property tax assistance program in subsection (1)(c) is taxed at the rate provided in subsection (2)(a)(ii) of its market value multiplied by a percentage figure based on income and determined from the following table:
Income Income Percentage
Single Person Married Couple Multiplier
Head of Household
$0 - $
6,000 13,500 $0 - $ 8,000 15,500 20% 6,001 13,501 - 9,200 16,700 8,001 15,501 - 14,000 21,500 50% 9,201 16,701 - 15,000 22,500 14,001 21,501 - 20,000 27,500 70%
(ii) The income levels contained in the table in subsection (2)(b)(i) must be adjusted for inflation annually by the
of revenue. The adjustment to the income levels is determined by:
(A) multiplying the appropriate dollar amount from the table in subsection (2)(b)(i) by the ratio of the PCE for the second quarter of the year prior to the year of application to the PCE for the second quarter of 1995; and
(B) rounding the product thus obtained to the nearest whole dollar amount.
(iii) "PCE" means the implicit price deflator for personal consumption expenditures as published quarterly in the Survey of Current Business by the bureau of economic analysis of the U.S. department of commerce.
(c) Property described in subsection (1)(d) is taxed at one-half the taxable percentage rate established in subsection (2)(a)(i).
(3) Within the meaning of comparable property, as defined in 15-1-101, property assessed as commercial property is comparable only to other property assessed as commercial property and property assessed as other than commercial property is comparable only to other property assessed as other than commercial property."
Section 2. 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 a person who is eligible to file a claim under 15-30-172.
(3) "Department" means the department of revenue.
(4) "Gross household income" means all income received by all individuals of a household while they are members of the household, excluding the gross amount of any pension or annuity, Railroad Retirement Act benefits, and all payments received under federal social security.
(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 property 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 the amount obtained by subtracting $6,300 from gross household income.
(9) (a) "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
(i) veterans' disability benefits;
(b)(ii) the amount of capital gains excluded from adjusted gross income; (c)(iii) alimony; (d)(iv) support money; (e)(v) nontaxable strike benefits; (f)(vi) cash public assistance and relief; and (g)(vii) payments and interest on federal, state, county, and municipal bonds ; and. (h)(b) Under this section, income does not include the gross amount of any pension or annuity, including Railroad
Retirement Act benefits and all payments received under federal social security except social security income paid directly to
a nursing home.
(10) "Property tax billed" means taxes levied against the homestead, including special assessments and fees but excluding penalties or interest during the claim period.
(11) "Rent-equivalent tax paid" means 15% of the gross rent."
Section 3. Section 15-30-176, MCA, is amended to read:
"15-30-176. Residential property tax credit for elderly -- computation of relief. The amount of the tax credit granted under the provisions of 15-30-171 through 15-30-179 is computed as follows:
(1) In the case of a claimant who owns the homestead for which a claim is made, the credit is the amount of property tax billed less the deduction specified in subsection (4).
(2) In the case of a claimant who rents the homestead for which a claim is made, the credit is the amount of rent-equivalent tax paid less the deduction specified in subsection (4).
(3) In the case of a claimant who both owns and rents the homestead for which a claim is made, the credit is:
(a) the amount of property tax billed on the owned portion of the homestead less the deduction specified in subsection (4); plus
(b) the amount of rent-equivalent tax paid on the rented portion of the homestead less the deduction specified in subsection (4).
(4) Property tax billed and rent-equivalent tax paid are reduced according to the following schedule:
Household income Amount of reduction
$ 0-999 $0
2,000-2,999 the product of
.006 .009 times the household income
3,000-3,999 the product of
.016 .024 times the household income
4,000-4,999 the product of
.024 .036 times the household income
5,000-5,999 the product of
.028 .042 times the household income
6,000-6,999 the product of
.032 .048 times the household income
7,000-7,999 the product of
.035 .052 times the household income
8,000-8,999 the product of
.039 .058 times the household income
9,000-9,999 the product of
.042 .063 times the household income
10,000-10,999 the product of
.045 .067 times the household income
11,000-11,999 the product of
.048 .072 times the household income
12,000 & over the product of
.050 .075 times the household income
(5) The credit granted may not exceed
NEW SECTION. Section 4. Effective date. [This act] is effective on passage and approval.
NEW SECTION. Section 5. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1998.
- END -
Latest Version of SB 92 (SB0092.01)
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