The Montana Legislature has introduced Senate Bill 117, a significant piece of legislation aimed at modifying property tax assessments and levies for governmental entities. Introduced on March 21, 2025, the bill seeks to clarify the treatment of newly taxable properties and enhance local revenue generation through property taxes.

The primary purpose of Senate Bill 117 is to allow governmental entities to apply a calculated levy to all properties within their jurisdiction, including 50% of newly taxable properties. This provision is designed to provide local governments with additional financial resources, particularly in light of recent economic challenges. Newly taxable properties, as defined by the bill, encompass various scenarios such as annexation, construction, and the transfer of properties from tax-exempt to taxable status.

Key provisions of the bill include detailed definitions of what constitutes newly taxable property and the mechanisms for calculating taxable values. Notably, the bill excludes increases in value arising from tax increment financing districts, ensuring that these areas are not double-taxed. The legislation also outlines how the termination of tax increment financing districts will affect the reporting of taxable values.

Debate surrounding Senate Bill 117 has focused on its potential impact on local governments and taxpayers. Proponents argue that the bill will empower local entities to better fund essential services and infrastructure projects. However, critics express concerns about the increased tax burden on property owners, particularly in areas experiencing rapid growth and development.

The economic implications of Senate Bill 117 could be substantial, as it aims to bolster local revenues during a time when many municipalities are facing budget constraints. By expanding the tax base to include newly taxable properties, the bill may provide a much-needed financial boost to local governments.

As the legislative process unfolds, stakeholders will be closely monitoring the bill's progress and its potential effects on property taxes across Montana. If passed, Senate Bill 117 could reshape the landscape of local taxation, influencing both governmental funding and property ownership dynamics in the state.