Exempt agricultural property from open space levies
Summary
HB 411 changes Montana property tax law to exempt certain agricultural and forest property from open-space property tax levies and from property taxes pledged to repay general obligation bonds issued for open-space purposes. Specifically, the bill prohibits these levies from being imposed on agricultural land eligible for agricultural valuation, forest land, agricultural improvements on agricultural land, noncommercial improvements on forest land, and agricultural implements and equipment. The bill amends Section 76-6-109, MCA, which governs public bodies’ powers related to open-space land, to add these tax limitations.
The bill applies retroactively to all open-space levies and bonds, regardless of when they were approved, and prospectively to property tax years beginning on or after January 1, 2026. It also states that the chapter does not supersede certain existing provisions in Title 7, chapter 8, parts 22 and 25. In practical terms, the measure narrows the tax base for open-space financing by removing agricultural property from the class of property that can be taxed for those levies and bond payments.
Impact
HB 411 directly affects local governments and other public bodies that levy open-space taxes or issue bonds backed by those levies, reducing the property types subject to those charges. It also benefits owners of agricultural and forest property, along with agricultural equipment owners, by shielding those assets from open-space-related property tax burdens. Because the bill is retroactive to all open-space levies and bonds and applies to tax years beginning January 1, 2026, it may require local tax administrators to adjust current and prior levy practices and bond-related tax collections.
Sentiment
The bill appears to have generally favorable support, especially in the House and Senate floor votes, where it passed by clear margins. The committee vote in the House Taxation Committee was narrower, suggesting some early concern or disagreement, but the measure ultimately advanced through both chambers and received concurrence in the Senate without recorded opposition in committee. Overall, the voting pattern suggests broad legislative agreement that agricultural property should be excluded from open-space levies.
Contention
The main point of contention is the policy choice to exempt agricultural and related property from funding open-space levies and bond repayment, which may reduce revenue available to local governments or open-space programs. Supporters likely viewed the bill as a targeted tax relief measure for farmers, ranchers, and forest landowners, while opponents may have been concerned about shifting costs to other taxpayers or weakening financing for open-space acquisitions and maintenance. The relatively close House floor votes and the 12-9 committee vote indicate that the revenue impact and fairness of the exemption were the most likely areas of disagreement.