Revise tax rate for agricultural property owned by certain nonprofits
HB 928 revises Montana property tax law by creating a new, higher-taxed category of agricultural land acquired after the bill’s effective date and owned by certain nonprofit corporations. The bill keeps existing exemptions for nonprofits such as churches, schools, hospitals, low-income housing providers, cemeteries, residential treatment centers, veteran housing organizations, and rural cooperative utilities. For covered nonprofit-owned agricultural land, the bill would tax the land at 10 times the agricultural taxable percentage rate, while other newly defined nonqualified agricultural land remains taxed at 7 times the agricultural rate.
The bill also makes conforming changes to related property classification and tax-deed statutes. It updates the class three and class four property definitions to reflect the new nonprofit agricultural land category, clarifies how mixed-use property is classified and taxed, and adjusts the transmission-line exemption statute to exclude the one-acre homesite on certain agricultural and forest parcels. It also amends tax deed notice provisions so that agricultural land in the new nonprofit category is treated similarly to other agricultural property when a dwelling is occupied by the titleholder.
The overall sentiment reflected in the available legislative history appears limited but favorable at the committee level, with the bill receiving a unanimous 17-0 vote to table in House Agriculture. However, the bill ultimately died in process, indicating it did not advance through the full legislative path. The absence of recorded committee testimony suggests there is no detailed public transcript of debate in the provided materials.
The main point of contention implied by the bill’s structure is the tax treatment of agricultural land owned by nonprofits that are not among the listed exempt categories. Supporters likely viewed the measure as a way to narrow favorable agricultural tax treatment to certain nonprofit uses, while opponents may have been concerned about increasing tax burdens on nonprofit landowners engaged in agricultural activity. Because the bill excludes a broad set of socially oriented nonprofits, the dispute appears focused on which nonprofit agricultural owners should continue to receive preferential tax treatment and which should not.
HB 928 would amend several sections of the Montana Code Annotated governing property classification, valuation, and tax-deed procedures. Its primary legal effect is to create a new class of agricultural land acquired after the effective date and owned by most nonprofit corporations, subjecting that land to a substantially higher taxable value than ordinary agricultural land. The bill would also make conforming changes to residential, agricultural, and forest property tax-deed rules and to the transmission-line exemption statute, affecting county assessors, treasurers, nonprofit landowners, and property tax lien holders.
The limited voting record suggests the bill had at least some committee support, as it was tabled 17-0 in House Agriculture, but the bill ultimately died in process. With no committee transcript available, there is little direct evidence of debate, but the bill’s progression indicates it did not generate enough momentum to advance. Overall, the sentiment appears neutral-to-mildly supportive in committee, but insufficient for enactment.
The central issue is whether agricultural land owned by nonprofits should continue to receive the same preferential tax treatment as other agricultural land. The bill specifically exempts certain nonprofits tied to public or charitable purposes—such as churches, schools, hospitals, low-income housing, veteran housing, and rural cooperatives—while imposing a higher tax rate on other nonprofit-owned agricultural land acquired after the effective date. That distinction likely created the main policy divide between proponents seeking to limit tax preferences and opponents concerned about burdening nonprofit landowners involved in agriculture.