§ 15-10-420 — Procedure For Calculating Levy

Montana § 15-10-420

• Jurisdiction: Montana
• Title 15: TAXATION
• Ch. 10: PROPERTY TAX LEVIES
• Part 4: Limitation on Property Taxes

Text

15-10-420 . Procedure for calculating levy. (1) (a) Subject to the provisions of 15-10-425 (2)(b) and this section, 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 plus the average rate of inflation for the prior 3 years, not to exceed 4%. 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 75% of the current year's newly taxable value from class four property and the applicable amount pursuant to subsection (1)(b) of newly taxable value from classes other than class one, class two, and class four, plus the average rate of inflation for the prior 3 years.
(b) For the purposes of subsection (1)(a), the governmental entity may include the following percentages of newly taxable value from classes other than class one, class two, and class four:
(i) 100% of the taxable value of class eight property that receives an abatement under 15-6-138 (4)(b);
(ii) 100% of the taxable value of property that receives a new or expanding industry abatement under 15-24-1402 or a historic property abatement under 15-24-1603 from the time the abatement is granted through completion of construction; and
(iii) 50% if the governmental entity creates a large taxpayer reserve account and meets the deposit requirement of 7-6-620 (2); or
(iv) 40% if the governmental entity does not create a large taxpayer reserve account or does not meet the deposit requirement of 7-6-620 (2).
(c) A governmental entity that does not impose the maximum number of mills authorized under subsection (1)(a) may carry forward the authority to impose the number of mills equal to the difference between the actual number of mills imposed and the maximum number of mills authorized to be imposed. The mill authority carried forward may be imposed in a subsequent tax year.
(d) For the purposes of subsection (1)(a), the department shall calculate the average rate of inflation for the prior 3 years by using the consumer price index, U.S. city average, all urban consumers, using the 1982-84 base of 100, as published by the bureau of labor statistics of the United States department of labor.
(2) A governmental entity may apply the levy calculated pursuant to subsection (1)(a) plus any additional levies authorized by the voters, as provided in 15-10-425 , to all property in the governmental unit, including newly taxable property.
(3) (a) For the purposes of this section, newly taxable property includes:
(i) annexation of real property and improvements into a taxing unit;
(ii) construction, expansion, or remodeling of improvements;
(iii) transfer of property into a taxing unit;
(iv) subdivision of real property; and
(v) transfer of property from tax-exempt to taxable status.
(b) Newly taxable property does not include an increase in value that arises because of an increase in the incremental value within a tax increment financing district.
(4) (a) For the purposes of subsection (1), the taxable value of newly taxable property includes the release of taxable value from the incremental taxable value of a tax increment financing district because of:
(i) a change in the boundary of a tax increment financing district;
(ii) an increase in the base value of the tax increment financing district pursuant to 7-15-4287 ; or
(iii) the termination of a tax increment financing district.
(b) If a tax increment financing district terminates prior to the certification of taxable values as required in 15-10-202 , the increment value is reported as newly taxable property in the year in which the tax increment financing district terminates. If a tax increment financing district terminates after the certification of taxable values as required in 15-10-202 , the increment value is reported as newly taxable property in the following tax year.
(c) For the purposes of subsection (3)(a)(ii), the value of newly taxable class four property that was constructed, expanded, or remodeled property since the completion of the last reappraisal cycle is the current year market value of that property less the previous year market value of that property.
(d) For the purposes of subsection (3)(a)(iv), the subdivision of real property includes the first sale of real property that results in the property being taxable as class four property under 15-6-134 or as nonqualified agricultural land as described in 15-6-133 (1)(c).
(5) This section does not apply to:
(a) mills imposed under 15-10-109 , 20-9-331 , 20-9-333 , 20-9-360 , or 20-25-439 ;
(b) school district levies established in Title 20 or any other title of the Montana Code Annotated; or
(c) a mill levy imposed for a newly created regional resource authority.
(6) For the purposes of subsection (1)(a), taxes imposed do not include net or gross proceeds taxes received under 15-6-131 and 15-6-132 .
(7) In determining the maximum number of mills in subsection (1)(a), the governmental entity:
(a) may increase the number of mills to account for a decrease in reimbursements;
(b) may not increase the number of mills to account for a loss of tax base because of legislative action that is reimbursed under the provisions of 15-1-121 (7); and
(c) may not include revenue distributed to a county to provide state property tax assistance pursuant to 15-6-701 .
(8) (a) The provisions of subsection (1) do not prevent or restrict:
(i) a judgment levy under 2-9-316 , 7-6-4015 , or 7-7-2202 ;
(ii) a levy to repay taxes paid under protest as provided in 15-1-402 ;
(iii) an emergency levy authorized under 10-3-405 , 20-9-168 , or 20-15-326 ;
(iv) a levy for the support of a study commission under 7-3-184 ;
(v) a levy for the support of a newly established regional resource authority;
(vi) the portion that is the amount in excess of the base contribution of a governmental entity's property tax levy for contributions for group benefits excluded under 2-9-212 or 2-18-703 ;
(vii) a levy for reimbursing a county for costs incurred in transferring property records to an adjoining county under 7-2-2807 upon relocation of a county boundary;
(viii) a levy used to fund the sheriffs' retirement system under 19-7-404 (2)(b); or
(ix) a governmental entity from levying mills for the support of an airport authority in existence prior to May 7, 2019, regardless of the amount of the levy imposed for the support of the airport authority in the past. The levy under this subsection (8)(a)(ix) is limited to the amount in the resolution creating the authority.
(b) A levy authorized under subsection (8)(a) may not be included in the amount of property taxes actually assessed in a subsequent year.
(9) A governmental entity may levy mills for the support of airports as authorized in 67-10-402 , 67-11-301 , or 67-11-302 even though the governmental entity has not imposed a levy for the airport or the airport authority in either of the previous 2 years and the airport or airport authority has not been appropriated operating funds by a county or municipality during that time.
(10) The department may adopt rules to implement this section. The rules may include a method for calculating the percentage of change in valuation for the purposes of determining the elimination of property, new improvements, or newly taxable value in a governmental unit.

Legislative History

En. Sec. 1, Ch. 584, L. 1999; amd. Secs. 6, 16(1), Ch. 11, Sp. L. May 2000; amd. Sec. 1, Ch. 191, L. 2001; amd. Sec. 1, Ch. 220, L. 2001; amd. Sec. 3, Ch. 361, L. 2001; amd. Sec. 3, Ch. 511, L. 2001; amd. Sec. 7, Ch. 571, L. 2001; amd. Sec. 94, Ch. 574, L. 2001; amd. Sec. 1, Ch. 115, L. 2003; amd. Sec. 1, Ch. 476, L. 2003; amd. Sec. 3, Ch. 376, L. 2005; amd. Sec. 3, Ch. 545, L. 2005; amd. Sec. 20, Ch. 521, L. 2007; amd. Sec. 26, Ch. 2, L. 2009; amd. Sec. 3, Ch. 57, L. 2009; amd. Sec. 27, Ch. 351, L. 2009; amd. Sec. 3, Ch. 412, L. 2009; amd. Sec. 9, Ch. 483, L. 2009; amd. Sec. 18, Ch. 347, L. 2011; amd. Sec. 2, Ch. 393, L. 2011; amd. Sec. 5, Ch. 411, L. 2011; amd. Sec. 22, Ch. 361, L. 2015; amd. Sec. 1, Ch. 328, L. 2017; amd. Sec. 7, Ch. 3, L. 2019; amd. Sec. 1, Ch. 332, L. 2019; amd. Sec. 9, Ch. 506, L. 2021; amd. Sec. 3, Ch. 45, L. 2023; amd. Sec. 4, Ch. 729, L. 2023; amd. Sec. 1, Ch. 95, L. 2025; amd. Sec. 2, Ch. 554, L. 2025; amd. Sec. 1, Ch. 636, L. 2025; amd. Sec. 1, Ch. 658, L. 2025; amd. Sec. 7, Ch. 775, L. 2025.