INTRODUCED
BY G. Hertz, E. Boldman
A BILL FOR AN ACT ENTITLED: "AN ACT REVISING PROPERTY TAXES FOR SUBDIVISION DEVELOPMENT PROJECTS; PROVIDING A TEMPORARY TAX EXEMPTION FOR PROPERTY THAT IS PART OF A SUBDIVISION DEVELOPMENT PROJECT; PROVIDING FOR yearly PREPAYMENT OF PROPERTY TAXES THAT WOULD HAVE BEEN COLLECTED IF THE SUBJECT PROPERTY WAS NOT UNDERGOING SUBDIVISION DEVELOPMENT; providing for termination of the exemption for certain events; providing rulemaking authority; AMENDING SECTION 15-10-305, MCA; and PROVIDING AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Temporary exemption for subdivision development -- rulemaking. (1) Subject to the provisions of this section, property that is undergoing subdivision development is temporarily exempt from taxation at the start of the property tax year beginning January 1 after the following conditions are met:
(a) the developer has submitted a timely property tax exemption application to the department and the department has approved the exemption application; and
(b) within 30 days after approval of the exemption application and before January 1 of the property tax year in which the exemption is sought, the developer has submitted a property tax prepayment equal to the amount of property taxes and assessments due on the property in the most recent property tax year. The payment is payable to the county treasurer and must be distributed by the treasurer to funds and accounts in the same ratio as property tax collected on the property is distributed.
(2) At the time the exemption is granted, the department shall provide a notice to the clerk and recorder in the county in which the property is located. The clerk shall file the notice when the payment provided for in subsection (1)(b) is made. The notice must indicate that an exemption pursuant to this section has been granted on a form prescribed by the department.
(3) In order to renew the exemption, the developer or an interested party shall pay the amount provided for in subsection (1)(b) plus a fee of 5% before January 1 of the property tax year in which the exemption is sought. The renewal payment is payable to the county treasurer and must be distributed by the treasurer to funds and accounts in the same ratio as property tax collected on the property is distributed. If the renewal payment is not received by the deadline provided in this subsection, the exemption is canceled, and the clerk shall notify the department of the loss of the exemption status on a form prescribed by the department.
(4) (a) Subject to subsections (3) and (4)(b), the temporary exemption applies to all real property in the subdivision that was granted the exemption, including new construction for a period not to exceed 5 years, regardless of the number of conveyances from the land split, the value of real property during the construction process, or a change in ownership.
(b) The exemption expires on any lot that was part of the land split once a habitable dwelling has been constructed on the lot.
(5) If subdivision development is complete before the expiration of the period provided for in subsection (4)(a), the temporary exemption expires on December 31 of the year in which the subdivision development is complete. For the purposes of this subsection, subdivision development is complete when at least 95% of the lots that are part of the land split contain a habitable dwelling.
(6) The department may adopt rules to implement the provisions of this section.
Section 2. Section 15-10-305, MCA, is amended to read:
"15-10-305. Clerk and recorder to report mill levy -- department to compute and enter taxes. (1) (a) The county clerk and recorder shall by the second Monday in September or within 30 calendar days after receiving certified taxable values notify the department of the number of mills needed to be levied for each taxing jurisdiction in the county. Except as provided in subsection (1)(b), the department shall compute the taxes by multiplying the number of mills times the taxable value of the property to be taxed and shall add any fees or assessments required to be levied against a person owning property. All taxes, fees, and assessments must be itemized for the property listed in the property tax record.
(b) In Except as provided in [section 1] regarding property that has been granted a subdivision property tax exemption, in conveyances that result in a land split, the taxes must be based on the property as assessed on January 1 preceding the conveyance. The department is not required to include the name of the new owner in the computation of the amount of taxes, fees, and assessments to be levied against property that is part of a land conveyance if including the new owner's name would cause the department to violate the deadline provided in subsection (2).
(2) The department shall complete the computation of the amount of taxes, fees, and assessments to be levied against the property and shall notify the county clerk and recorder and the county treasurer by the second Monday in October. Notwithstanding the provisions of 15-10-321, if a county clerk and recorder fails to timely notify the department of the number of mills needed to be levied for each taxing jurisdiction in that county in accordance with subsection (1)(a), the department must have additional time to meet the notification requirement of this subsection (2) equal to the number of days that the notification required in subsection (1)(a) was received late by the department."
NEW SECTION. Section 3. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 15, chapter 6, part 2, and the provisions of Title 15, chapter 6, part 2, apply to [section 1].
NEW SECTION. Section 4. Applicability. [This act] applies to property tax years beginning after December 31, 2023.