BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.20.515 relating to taxable value of newly taxable property

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO:  All Concerned Persons

 

1.  On July 1, 2009, at 9:30 a.m., a public hearing will be held in the 4 East Conference Room (Fourth Floor) of the Sam W. Mitchell Building, at Helena, Montana, to consider the amendment of the above-stated rule.

Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana.

 

2.  The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice.  If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., June 22, 2009, to advise us of the nature of the accommodation that you need.  Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail canderson@mt.gov.

 

3.  The rule proposed to be amended provides as follows, stricken matter interlined, new matter underlined:

 

ARM 42.20.515  DETERMINATION OF TOTAL TAXABLE VALUE OF NEWLY TAXABLE PROPERTY  (1)  For the 2001 2009 tax year and subsequent tax years, the department will calculate for each taxing jurisdiction the total taxable value of class four newly taxable property as follows:

(a)  For tax years 2001 and 2002 2009 and subsequent years, the department shall determine the reappraisal market value of class four newly taxable property in a taxing jurisdiction.  The reappraisal value of newly taxable class four property is calculated as the difference between the current year total reappraisal value of class four property and the previous year total reappraisal value of class four property.  Beginning with tax year 2001, class Class four newly taxable property in a taxing jurisdiction will include the total reappraisal market value of class four property for any tax increment financing district which has been dissolved or terminated.

(b)  For tax year 2003 and subsequent tax years, the The current year total reappraisal market value is determined by valuing each current year parcel with the 2003 current cycle valuation schedules and models.  These values for current year parcels are then added together to arrive at the current year total market value.  The previous year total reappraisal market value is determined by valuing each previous year parcel with the 2003 current cycle valuation schedules and models.  These values for previous year parcels are then added together to arrive at the previous year total market value.  The difference between the current year total reappraisal market value and the previous year total reappraisal market value is the reappraisal total market value of class four residential newly taxable property and class four commercial newly taxable property.

(c)  The total taxable value of newly taxable property value for class four residential property for the current tax year is determined by multiplying the current year total class four residential reappraisal market value by the current year full reappraisal to taxable value conversion factor for class four residential property appropriate current year exemption percentage and the current year class four tax rate.

(d)  The total taxable value of newly taxable property for class four commercial for the current tax year is determined by multiplying the current year total class four commercial reappraisal value by the current year full commercial to taxable value conversion factor for class four commercial property.

(e)  For example, applying the steps set forth in (1)(b), the total reappraisal value of newly taxable class four residential property for a taxing jurisdiction would be determined as follows:

 

Current year total class four residential

reappraisal value                                                                    $2,000,000

Previous year total class four residential

reappraisal value                                                                    -1,800,000

Reappraisal value of new class four residential

property                                                                                    $  200,000

 

(f)  Using the above example, the total taxable value of newly taxable class four residential property in the taxing jurisdiction for the 2001 tax year would be determined by multiplying the total reappraisal value of newly taxable class four residential property by the 2001 full reappraisal to taxable value conversion factor for class four residential property in that jurisdiction as shown below:

Total reappraisal value of new class four

residential property                                                                  $ 200,000

2001 full reappraisal to taxable value conversion

factor for class four residential property                                x   2.51%

Total taxable value of newly taxable class four

residential property                                                                  $   5,020

 

(g)  In addition to the taxable value of residential property shown in (1)(d) and taxable value of commercial property in (1)(e), the newly taxable class four residential and commercial property will be the taxable value of the phased-in reappraisal value of the newly taxable class four residential and commercial property identified in the reappraisal period tax year 2003 to tax year 2008.

(2)  For tax year 2001 2009 and subsequent tax years, the department will calculate for each taxing jurisdiction the total taxable value of newly taxable property that is classified as class five, seven, eight, nine, twelve, thirteen, and fourteen, fifteen, and sixteen property.  The taxable value of newly taxable property of class five, seven, eight, nine, twelve, thirteen, and fourteen, fifteen, and sixteen property shall be determined as follows:

(a)  The department shall determine the total market value of newly taxable property in a taxing jurisdiction.  The total market value of newly taxable property is calculated as the difference between the current year total reappraisal market value for each class of property and the previous year total reappraisal market value of the same class of property.

(b) through (3) remain the same.

            (4)  The total taxable value of all newly taxable property in a taxing jurisdiction shall be determined by adding together the separate taxable values as determined above for class three, four, five, seven, eight, nine, ten, twelve, thirteen, and fourteen, fifteen, and sixteen property for that taxing jurisdiction.

            (5)  If the newly taxable value, as calculated according to (1) through (4), for any class of property in any taxing jurisdiction is less than zero, then the newly taxable value for that class of property in that taxing jurisdiction is zero.

 

AUTH:  15-1-201, 15-7-111, MCA

IMP:      15-10-420, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.20.515 because of new direction from the 2009 Legislature as provided in House Bill 658, which provides clarification for the calculation of newly taxable property values.

 

4.  Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing.  Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail canderson@mt.gov and must be received no later than July 9, 2009.

 

5.  Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

 

6.  An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes."  The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered.  In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

7.  The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to the person in 4 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

8.  The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled.  The primary bill sponsor was contacted on May 27, 2009, by regular mail.

 

 

 

/s/  Cleo Anderson                _          /s/  Dan R. Bucks____________________

CLEO ANDERSON                          DAN R. BUCKS

Rule Reviewer                                   Director of Revenue

 

Certified to Secretary of State June 1, 2009