House Bill No. 70
Introduced By hibbard, anderson, ream, m. hanson, waterman, christiaens, stang, ryan, foster, tropila, cole, gage, harrington, rose, carey
By Request of the Revenue Oversight Committee
A Bill for an Act entitled: "An Act exempting recreational leases from the beneficial use property tax; amending sections 15-1-101 and 15-24-1203, 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 15-1-101, MCA, is amended to read:
"15-1-101. Definitions. (1) Except as otherwise specifically provided, when terms mentioned in this section are used in connection with taxation, they are defined in the following manner:
(a) The term "agricultural" refers to:
(i) the production of food, feed, and fiber commodities, livestock and poultry, bees, fruits and vegetables, and sod, ornamental, nursery, and horticultural crops that are raised, grown, or produced for commercial purposes; and
(ii) the raising of domestic animals and wildlife in domestication or a captive environment.
(b) The term "assessed value" means the value of property as defined in 15-8-111.
(c) The term "average wholesale value" means the value to a dealer prior to reconditioning and the profit margin shown in national appraisal guides and manuals or the valuation schedules of the department.
(d) (i) The term "commercial", when used to describe property, means property used or owned by a business, a trade, or a corporation as defined in 35-2-114 or used for the production of income, except property described in subsection (1)(d)(ii).
(ii) The following types of property are not commercial:
(A) agricultural lands;
(B) timberlands and forest lands;
(C) single-family residences and ancillary improvements and improvements necessary to the function of a bona fide farm, ranch, or stock operation;
(D) mobile homes used exclusively as a residence except when held by a distributor or dealer of trailers or mobile homes as stock in trade;
(E) all property described in 15-6-135; and
(F) all property described in 15-6-136.
(e) The term "comparable property" means property that:
(i) has similar use, function, and utility;
(ii) is influenced by the same set of economic trends and physical, governmental, and social factors; and
(iii) has the potential of a similar highest and best use.
(f) The term "credit" means solvent debts, secured or unsecured, owing to a person.
(g) (i) "Department", except as provided in subsection (1)(g)(ii), means the department of revenue provided for in 2-15-1301.
(ii) In chapters 70 and 71, department means the department of transportation provided for in 2-15-2501.
(h) The terms "gas" and "natural gas" are synonymous and mean gas as defined in 82-1-111(2). The terms include all natural gases and all other fluid hydrocarbons, including methane gas or any other natural gas found in any coal formation.
(i) The term "improvements" includes all buildings, structures, fences, and improvements situated upon, erected upon, or affixed to land. When the department determines that the permanency of location of a mobile home or housetrailer has been established, the mobile home or housetrailer is presumed to be an improvement to real property. A mobile home or housetrailer may be determined to be permanently located only when it is attached to a foundation that cannot feasibly be relocated and only when the wheels are removed.
(j) The term "leasehold improvements" means improvements to mobile homes and mobile homes located on land owned by another person. This property is assessed under the appropriate classification, and the taxes are due and payable in two payments as provided in 15-24-202. Delinquent taxes on leasehold improvements are a lien only on the leasehold improvements.
(k) The term "livestock" means cattle, sheep, swine, goats, horses, mules, asses, llamas, alpacas, bison, ostriches, rheas, emus, and domestic ungulates.
(l) The term "mobile home" means forms of housing known as "trailers", "housetrailers", or "trailer coaches" exceeding 8 feet in width or 45 feet in length, designed to be moved from one place to another by an independent power connected to them, or any trailer, housetrailer, or trailer coach up to 8 feet in width or 45 feet in length used as a principal residence.
(m) The term "personal property" includes everything that is the subject of ownership but that is not included within the meaning of the terms "real estate" and "improvements".
(n) The term "poultry" includes all chickens, turkeys, geese, ducks, and other birds raised in domestication to produce food or feathers.
(o) The term "property" includes money, credits, bonds, stocks, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership. This definition may not be construed to authorize the taxation of the stocks of a company or corporation when the property of the company or corporation represented by the stocks is within the state and has been taxed.
(p) The term "real estate" includes:
(i) the possession of, claim to, ownership of, or right to the possession of land;
(ii) all mines, minerals, and quarries in and under the land subject to the provisions of 15-23-501 and Title 15, chapter 23, part 8;
(iii) all timber belonging to individuals or corporations growing or being on the lands of the United States; and
(iv) all rights and privileges appertaining to mines, minerals, quarries, and timber.
(q) "Recreational" means hunting, fishing, swimming, boating, waterskiing, camping, biking, hiking, and winter sports, including but not limited to skiing, skating, and snowmobiling.
(q)(r) "Research and development firm" means an entity incorporated under the laws of this state or a foreign corporation
authorized to do business in this state whose principal purpose is to engage in theoretical analysis, exploration, and
experimentation and the extension of investigative findings and theories of a scientific and technical nature into practical
application for experimental and demonstration purposes, including the experimental production and testing of models,
devices, equipment, materials, and processes. (r)(s) The term "taxable value" means the percentage of market or assessed value as provided for in Title 15, chapter 6, part
(2) The phrase "municipal corporation" or "municipality" or "taxing unit" includes a county, city, incorporated town, township, school district, irrigation district, or drainage district or a person, persons, or organized body authorized by law to establish tax levies for the purpose of raising public revenue.
(3) The term "state board" or "board" when used without other qualification means the state tax appeal board."
Section 2. Section 15-24-1203, MCA, is amended to read:
"15-24-1203. Privilege tax on industrial, trade, or other business use of tax-exempt property -- exceptions. (1)
There is imposed and must be collected a tax upon the possession or other beneficial use for industrial, trade, or other
business purposes enjoyed by any private individual, association, or corporation of any property, real or personal, that for
any reason is exempt from taxation.
The tax may not be imposed upon the possession or other beneficial use of buildings
owned by public entities and located upon public airports. However, privately owned buildings located on public airport
property are subject to tax. The tax may not be imposed upon the possession or other beneficial use of public lands
occupied under the terms of mineral, timber, or grazing leases or permits issued by the United States or the state of
Montana or upon any easement unless the lease, permit, or easement entitles the lessee or permittee to exclusive possession
of the premises to which the lease, permit, or easement relates. The tax is imposed upon the possession or other beneficial
use of an electric transmission line and associated facilities, except that lines and facilities of a design capacity of less than
500 kilovolts are not subject to the tax.
(2) The tax may not be imposed upon:
(a) the possession or other beneficial use of railroad right-of-way or track owned by the United States or acquired by the
state pursuant to Title 60, chapter 11, part 1, as long as the state or the United States retains ownership and the right-of-way
or track is used exclusively for rail transportation
The tax may not be imposed on the beneficial use by a person of property held by a port authority, created under Title
7, chapter 14, part 11, or by a port authority owned by the United States or an agency of the United States , unless the port
authority provides for the exclusive use of the property by the person;
(c) the possession or other beneficial use of public lands occupied under the terms of recreational, mineral, timber, or grazing leases or permits issued by the United States or the state of Montana or upon any easement unless the lease, permit, or easement entitles the lessee or permittee to exclusive possession of the premises to which the lease, permit, or easement relates; or
(d) the possession or other beneficial use of buildings owned by public entities and located upon public airports. However, privately owned buildings located on public airport property are subject to taxation."
NEW SECTION. Section 3. Effective date -- retroactive applicability. [This act] is effective on passage and approval and applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1996.