Senate committee hears bill to notify counties of large drops in centrally assessed property values

Senator Danley Loge, sponsor and senator for Senate District 45, introduced Senate Bill 289 on behalf of Mineral County and other jurisdictions, saying the bill would require the Department of Revenue to notify counties when a centrally assessed property’s valuation drops by $1,500,000 or more.

"And part of this comes from Mineral County, the request for this bill, but other counties too would, actually could benefit from some of this information," Loge said, describing a case where a lumber mill closure in Saint Regis produced an assessed value that surprised county commissioners.

The bill, as explained by Loge, would not change valuations; it would only provide notice and an opportunity for counties to have an "open conversation" with the Department of Revenue before budget decisions are finalized. "It's not that they actually change the valuation. It's just that they're part of that convert at least have an open conversation with department of revenue," Loge said.

Jason Rittal, representing the Montana Association of Counties, told the committee the change is "pretty simple" and would help counties during budget planning. "If a property in a county drops by 1,500,000.0 or more, we get an email or an electronic notice of that property," Rittal said, adding that counties would benefit from advance clarity even if the department could not immediately apportion centrally assessed values by county.

Bryce Kotz, bureau chief with the Property Assessment Division of the Department of Revenue, provided technical background on why large swings occur. "Part of it is the centrally assessed companies, I think, made up about a third of those just with how their valuation, as that equipment ages, it depreciates," Kotz said, explaining that routine depreciation on large industrial personal property can produce million-dollar valuation changes even absent shutdowns.

Committee members asked for clarifications the bill does not itself create a fiscal note, why the threshold was set at $1.5 million and why class 4 property is excluded. Loge and department representatives said the $1.5 million trigger and the class-4 exclusion were chosen to limit the number of notices and avoid a large fiscal burden on the Department of Revenue from sending thousands of notices; Loge said the number of notices under the chosen threshold is roughly "300 notices." Kotz also explained that depreciation and cyclical valuation changes—rather than only full shutdowns—are common drivers of large decreases.

The hearing closed after proponents and informational witnesses; the committee did not take final action on SB 289 during this session.