Montana bill sets benefit tests for local property charges

The bill would describe when a local government property charge counts as a tax or a special assessment. The rules would cover local government charges or assessments on property, except property taxes and fees for services covered by section 7-6-4013. A charge would qualify as a special assessment only if it pays for services to the specific property, gives that property a benefit matching the charge, and the benefit will arrive within a reasonable time without a condition other than payment. A charge for the general public good, or one that does not depend on a special benefit to the property, would count as a tax. A charge by a district formed through a petition by property owners would be presumed to be a special assessment unless a property owner shows the tests are not met. This provision would not give local governments authority to impose a charge without meeting other legal requirements. The provision would apply to assessments imposed after December 31, 2026.

The bill would exclude certain parcels from property counted as benefited by a proposed improvement district. County commissioners would not count a qualifying parcel as benefited when deciding what property may be charged for an improvement district's work. The parcel must be class three property, have no residential structures, not touch the district, and have legal access to a public road outside the district. The provision would apply retroactively to earlier county determinations about public benefits when used for rural improvement district assessments imposed after December 31, 2025.

The bill would provide for direct appeals to the Montana Tax Appeal Board from certain Department of Revenue decisions. The appeal route would cover final Department of Revenue decisions involving property tax exemptions. A person would have to file a complaint within 30 days after receiving the department's final decision. This provision would apply to Department of Revenue decisions about property tax exemptions made on or after October 1, 2025.