About Bill -- Links
SENATE BILL NO. 514
INTRODUCED BY B. KEENAN
A BILL FOR AN ACT ENTITLED: "AN ACT REQUIRING THE ASSESSMENT OF A ROLLBACK TAX ON CERTAIN FOREST LAND THAT HAS BEEN CONVERTED TO ANOTHER USE WITHIN 10 YEARS OF APPLICATION FOR CLASSIFICATION AS FOREST LAND; IMPOSING INTEREST AND PENALTY ON THE ROLLBACK TAX; PROVIDING FOR THE DISTRIBUTION OF ROLLBACK TAXES; PROVIDING EXCEPTIONS TO THE ROLLBACK TAX; AMENDING SECTION 15-44-102, MCA; PROVIDING A CONTINGENT VOIDNESS PROVISION; AND PROVIDING EFFECTIVE DATES AND AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Application for classification of forest land -- withdrawal of forest land from classification. (1) An owner of forest land wishing to ensure that the owner's forest land is appraised as forest land shall file a signed application with the department.
(2) In the application, the owner shall:
(a) assert that the land has a dedicated use for the eventual harvest of timber; and
(b) sign a statement that the land will continue to be used as forest land.
(3) Except as provided in subsection (4), failure to file an application under this section may not result in reclassification of forest land unless there has been an actual change in use.
(4) Forest land in a county totaling 2,500 acres or more under one ownership that has been classified under this chapter for the purposes of valuation, assessment, and taxation may not be converted to another use for at least 10 years from the date of application for classification as forest land.
(5) If forest land described in subsection (4) is withdrawn from classification, the land is subject to additional tax, penalty, and interest as provided in [section 2].
NEW SECTION. Section 2. Rollback tax -- computation -- distribution. (1) (a) If forest land described in [section 1(4)] is changed to a residential, commercial, or industrial use, the property is subject to a rollback tax, including penalty and interest, in addition to the property tax levied on the property. The rollback tax is a lien on the property and is due and payable by the owner of the property at the time of the change in use.
(b) As used in this section, "rollback" means the period preceding the change in use, not to exceed 7 years, during which the property was appraised as forest land. The rollback period may not apply to tax years ending on or before December 31, 1999.
(2) The department shall determine the amount of rollback tax due on the property by:
(a) determining the taxable value of the property as residential, commercial, or industrial property;
(b) multiplying this value by the sum of the annual mill levies applied in the taxing jurisdiction in which the land is located during the rollback period; and
(c) subtracting from this figure the actual property tax paid on the property during this period.
(3) The amount of interest charged on the rollback tax is equal to the interest charged on delinquent property taxes in effect under 15-16-102 during the rollback period from the dates on which the additional tax could have been paid without penalty if the land had been assessed at a value without regard to this chapter.
(4) Penalty as provided in 15-16-102 must be added to the amount of the rollback tax at the rate in effect during the rollback period.
(5) Any additional tax that is not paid by its due date is delinquent. Penalty and interest must be added to the additional tax as provided in 15-16-102.
(6) The rollback tax, penalty, and interest are a lien on the property that attaches at the time that the forest land is removed from classification under this chapter. Delinquent rollback taxes are subject to the provisions of Title 15, chapters 17 and 18.
(7) The additional tax, penalties, and interest are payable within 30 days after the taxpayer has received written notice of the additional tax, penalty, and interest. The county treasurer shall distribute the additional tax, penalty, and interest in the same manner as real property taxes are distributed, except that a distribution may not be made for levies imposed under 20-9-331, 20-9-333, 20-9-360, 20-25-423, 20-25-439, and 53-2-813.
NEW SECTION. Section 3. Rollback tax -- exceptions. (1) (a) The reclassification of forest land to agricultural land or open space does not constitute a removal from forest land classification.
(b) The sale or transfer of the forest land described in [section 1(4)] does not constitute a removal from forest land classification if the new owner applies to the department for a continuance of classification of the land as forest land. If the new owner does not apply for continued classification of forest land, then the additional taxes, penalty, and interest determined under [section 2] are due and payable by the seller or transferor at the time of sale.
(2) The rollback tax imposed by [section 2] may not be imposed if the removal from classification is the result of:
(a) a transfer of forest land to a governmental entity in exchange for other forest land located within the state;
(b) a taking of forest land through the exercise of the power of eminent domain; or
(c) a natural disaster referred to in 15-44-104.
NEW SECTION. Section 4. Remedies available to owner liable for additional tax. The owner of land subject to additional tax, as provided for in [sections 1 through 4], is entitled to all of the available remedies under Title 15 with respect to the valuation of the land and the imposition of the additional tax.
Section 5. Section 15-44-102, MCA, is amended to read:
"15-44-102. Definitions. For the purposes of this part, unless the context requires otherwise, the following definitions apply:
(1) "Culmination of mean annual increment" means the point of optimum net wood production on an acre of forest land.
(2) "Cultivated Christmas trees" means Christmas trees that are grown on land prepared by intensive cultivation and tilling, such as by plowing or turning over the soil, and on which all unwanted plant growth is controlled for the exclusive purpose of raising Christmas trees.
(3) "Department" means the department of revenue.
(4) "Forest" means forest land and the timber on the land.
(5) "Forest land" means contiguous land of 15 acres or more in one ownership that is capable of producing timber that can be harvested in commercial quantity and is producing timber unless the trees have been removed by man through harvest, including clearcuts, or by natural disaster, including but not limited to fire. Forest land includes land:
(a) that has not been converted to another use;
(b) that has a dedicated use that is evidenced by the application required by [section 1]; and
(b)(c) on which the annual net wood production equals or exceeds 25 cubic feet an acre at the culmination of mean
(6) "Forest productivity value" means the value of forest land for assessment purposes, which value is determined only on the basis of its potential to produce timber, other forest products, and associated agricultural products through an income approach provided for in 15-44-103.
(7) "Harvest" means an activity related to the cutting or removal of timber for use or sale as a forest product.
(8) "Landowner" means an individual, corporation, association, company, firm, joint venture, syndicate, or trust.
(9) "Mean annual net wood production" means the average net usable volume of wood that 1 acre of forest land will grow in 1 year under average current and actual forest conditions and under current and reasonable management practices for each forest valuation zone established under 15-44-103.
(10) "Stumpage value" means the amount that timber would sell for under an arm's-length transaction made in the ordinary course of business, expressed in terms of dollars per unit of measure.
(11) "Timber" means all wood growth on privately owned land, mature or immature, alive or dead, standing or down, that is capable of furnishing raw material used in the manufacture of lumber or other forest products. The term does not include cultivated Christmas trees."
NEW SECTION. Section 6. Codification instruction. [Sections 1 through 4] are intended to be codified as an integral part of Title 15, chapter 44, part 1, and the provisions of Title 15, chapter 44, part 1, apply to [sections 1 through 4].
NEW SECTION. Section 7. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
NEW SECTION. Section 8. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
NEW SECTION. Section 9. Contingent voidness. (1) If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution, is declared invalid, then [section 2] is effective on January 1 of the year following the date of the determination of invalidity.
(2) If [LC 1831] is submitted to and not approved by the electorate at the tax election to be held in 1999, then [this act] is void.
NEW SECTION. Section 10. Effective dates. (1) Except as provided in subsection (2), [this act] is effective January 1, 2000.
(2) [Section 2] is effective on the occurrence of the contingency provided for in [section 9].
NEW SECTION. Section 11. Applicability. [This act] applies to tax years beginning after December 31, 1999.
- END -
Latest Version of SB 514 (SB0514.01)
Processed for the Web on February 20, 1999 (8:16PM)
New language in a bill appears underlined, deleted material appears stricken.
Sponsor names are handwritten on introduced bills, hence do not appear on the bill until it is reprinted. See the status of the bill for the bill's primary sponsor.
Status of this Bill | 1999 Session | Leg. Branch Home
This bill in WP 5.1 | All versions of all bills in WP 5.1
Prepared by Montana Legislative Services