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HOUSE BILL NO. 6
INTRODUCED BY B. MOLNAR
A BILL FOR AN ACT ENTITLED: "AN ACT REDUCING PROPERTY TAXES BY REQUIRING PROPERTY TAX COLLECTIONS IN EXCESS OF A CALCULATED AMOUNT TO BE REFUNDED; REDUCING INCOME TAXES BY REQUIRING EXCESS INCOME TAXES TO BE REFUNDED; PROVIDING A METHOD FOR CALCULATING EXCESS INCOME TAX COLLECTIONS; PROVIDING THAT THE PROPOSED ACT BE SUBMITTED TO THE QUALIFIED ELECTORS OF MONTANA; AMENDING SECTION 15-10-420, MCA; AND PROVIDING AN EFFECTIVE DATE AND APPLICABILITY DATES."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:
(1) "Growth" means the net percentage change in the actual value of all real property within a taxing unit because of newly taxable property referred to in 15-10-420(3), minus the destruction or deletion of taxable property.
(2) "Inflation" means the percentage change in the consumer price index, U.S. city average, for all items as published by the bureau of labor statistics of the U.S. department of labor.
Section 2. Section 15-10-420, MCA, is amended to read:
"15-10-420. Procedure for calculating levy -- revenue limitation -- refund of excess. (1)
A Subject to subsection (9),
a governmental entity that is authorized to impose mills may impose a mill levy sufficient to generate the amount of
property taxes actually assessed in the prior year, even if that levy is greater than the levy established by law. The
maximum number of mills that a governmental entity may impose is established by calculating the number of mills
required to generate the amount of property tax actually assessed in the governmental unit in the prior year based on the
current year taxable value, less the value of newly taxable property.
(2) A governmental entity may apply the levy calculated pursuant to subsection (1) plus any additional levies authorized by the voters to all property in the governmental unit, including newly taxable property.
(3) For purposes of this section, newly taxable property includes:
(a) annexation of real property and improvements into a taxing unit;
(b) construction, expansion, or remodeling of improvements;
(c) transfer of property into a taxing unit;
(d) subdivision of real property;
(e) reclassification of property;
(f) transfer of property from tax-exempt to taxable status; and
(g) revaluations caused by expansion, addition, replacement, or remodeling of improvements.
(4) Subsection (1) does not apply to school district general fund levies and the school district levy for tuition obligations established in 20-5-324(5).
(5) For purposes of subsection (1), taxes imposed do not include net or gross proceeds taxes received under 15-6-131 and 15-6-132.
(6) In determining the maximum number of mills in subsection (1), the governmental entity shall take into account any change from the prior year in the amount of statutory reimbursements for changes in the property tax laws. It may increase the number of mills to account for a decrease in reimbursements and shall decrease the number of mills to fully account for any increase in reimbursements.
(7) The department shall calculate the number of mills to be imposed for purposes of 15-10-107, 20-9-331, 20-9-333, 20-9-360, 20-25-423, 20-25-439, and 53-2-813. However, the number of mills calculated by the department may not exceed the mill levy limits established in those sections.
(8) The department may adopt rules to implement this section. The rules may include a method for calculating the percentage of change in valuation for purposes of determining the elimination of property, new improvements, or newly taxable property in a governmental unit.
(9) The maximum annual change in revenue from property taxes is the amount actually collected plus inflation, growth, and mill levies approved by the voters of the governmental entity. If the revenue from property taxes for a governmental entity exceeds the maximum annual change, then any amount in excess of the maximum annual change must be refunded to the taxpayers of the governmental entity on the basis of each taxpayer's proportional share of the amount of the excess. The refund must be made in the year after the excess is collected.
(10) Property tax collections in the tax year commencing January 1, 2001, and in each succeeding year must be refunded if they are in excess of the maximum annual change. The department may adopt rules to implement this section."
NEW SECTION. Section 3. Income tax excess -- calculation -- refunds. (1) The amount of excess income tax collections must be calculated under [section 4]. The excess amount is the amount available for refund and must be refunded on a pro rata basis to each taxpayer who filed a state income tax return, pursuant to 15-30-103, for the tax year in which the excess is collected.
(2) For the purposes of this section:
(a) the term "taxpayer" does not include a fiduciary or a beneficiary of an estate or trust who was required to file an income tax return pursuant to 15-30-135 unless a return for the appropriate year was filed on behalf of a decedent;
(b) a return filed using the filing status of married filing jointly is considered to have been filed by a single taxpayer; and
(c) the tax year is the 12-month period beginning January 1 and ending December 31 of the year in which the excess is collected, except that for fiscal year taxpayers, the tax year is a 12-month period ending between January 1 and December 31 of the appropriate tax year.
(3) (a) The pro rata distribution of the amount available for refund must be calculated by the department by dividing the amount available for refund by the total individual income tax liability as determined by the department from all appropriate tax year returns that were filed by October 15 of the succeeding calendar year.
(b) The amount determined in subsection (3)(a) must be used as the adjusted percentage multiplier described in subsection (3)(c) to determine the amount of each taxpayer's refund. The department may not alter or change the adjusted percentage multiplier.
(c) The department shall calculate the amount of each taxpayer's refund by multiplying the amount of tax liability shown on the taxpayer's return by the adjusted percentage multiplier determined in subsection (3)(b).
(4) (a) The department shall calculate the amount of each taxpayer's refund based on the taxpayer's tax year return on file with the department by October 15 of the calendar year succeeding the year in which the excess income tax is collected. A taxpayer filing a delinquent return for the appropriate tax year after October 15 of the succeeding calendar year is not eligible for a refund under this section.
(b) (i) If a taxpayer files an amended return or if the department reviews a taxpayer's return and recalculates the tax due to the state, the department shall recalculate the refund due to the taxpayer under this section.
(ii) If the department's recalculation determines that the taxpayer has an increased tax liability for the appropriate tax year and should receive an additional refund under this section as a result of increased appropriate tax year liability, the department shall credit the additional amount of refund under this section to the amount of additional tax due from the taxpayer.
(iii) If the amount of the recalculated refund due to the taxpayer exceeds the amount of additional tax due from the taxpayer, the department shall pay the excess amount to the taxpayer, but only if the amount of the refund exceeds $10.
(iv) If as the result of the taxpayer filing an amended return or as the result of a review by the department a taxpayer's original tax liability for the appropriate tax year is decreased, any overpayment of the refund calculated by the department based on the original tax liability must be credited against any refund due to the taxpayer.
(5) The department may not issue a refund under this section if the amount of the refund is $10 or less.
(6) The department shall calculate and issue refunds due to taxpayers under this section. The department may adopt rules to implement [section 4] and this section.
(7) (a) Notwithstanding the provisions of 15-1-211, any objection concerning the determination of the amount of refund or any other issue relating to the refunds provided in this section must be raised by the taxpayer with the department no later than 30 days after the refund is mailed to the taxpayer.
(b) A district court has no jurisdiction to entertain or consider any issue relating to the determination or payment of a refund made under this section unless the issue was first presented to the department and the taxpayer exhausted all administrative remedies.
NEW SECTION. Section 4. Excess income tax calculation -- definition. (1) For purposes of this section, "inflation" means the percentage change in the consumer price index, U.S. city average, for all items as published by the bureau of labor statistics of the U.S. department of labor.
(2) The department shall divide the amount of individual income tax collections in the prior year by the number or individuals filing income tax returns. The amount calculated for an individual is the base amount. The maximum annual change in state individual income tax collections is the base amount times the number of individuals filing income tax returns plus inflation. The maximum annual change must also take into account any increases in individual income taxes that have been approved by the voters. If individual income tax collections for the tax year beginning January 1, 2001, and each succeeding year exceed the maximum annual change, then the amount in excess of the maximum annual change must be refunded pursuant to [section 3].
NEW SECTION. Section 5. Codification instructions. (1) Section 1 is intended to be codified as an integral part of Title 15, chapter 10, part 4, and the provisions of Title 15, chapter 10, part 4, apply to section 1.
(2) Sections 3 and 4 are intended to be codified as an integral part of Title 15, chapter 30, part 1, and the provisions of Title 15, chapter 30, part 1, apply to sections 3 and 4.
NEW SECTION. Section 6. Effective date -- applicability. (1) If approved by the electorate, this act is effective January 1, 2001.
(2) Sections 1 and 2 apply retroactively, within the meaning of 1-2-109, to property tax collections beginning in the tax year commencing January 1, 2000.
(3) Sections 3 and 4 apply to income tax collections beginning in the tax year commencing January 1, 2001.
NEW SECTION. Section 7. Submission to electorate. This act 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 reducing property taxes and income taxes by requiring the refund of tax collections in excess of the maximum annual change.
 AGAINST reducing property taxes and income taxes by requiring the refund of tax collections in excess of the maximum annual change.
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Latest Version of HB 6 (HB0006.01)
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