Senator Trevis proposes sweeping property‑tax rate reset in Senate Bill 32

Senator Jeremy Trevis introduced Senate Bill 32 to the Senate Local Government Committee as a broad reset of Montana’s property‑tax class rates intended to provide property‑tax relief and narrow disparities across tax classes. "The broad idea is residential rates would fall from 1.35% down to 1%," Trevis said in opening remarks.

The bill would reduce the statutory tax rate on qualifying owner‑occupied residential (class 4) property to 1.0% from 1.35% and would set a common 1.5% rate for most commercial and other income‑generating property (down from a nominal 1.89% in some classes). Trevis said two categories would face higher nominal rates: non‑owner‑occupied residential rentals would move to 1.5% from 1.35%, and qualified data centers would see an increase from 0.9% to 1.5%. The sponsor also highlighted deep cuts proposed for centrally assessed electric utility allocations (class 9) and a reduction for certain energy assets (class 16).

Proponents framed the bill as an attempt to make treatment more uniform. Bob Story of the Montana Taxpayers Association said the existing structure produces large differences in tax paid per $100,000 of assessed value across classes and described a back‑of‑the‑envelope calculation showing a revenue‑neutral uniform rate (without the residential 1% carve‑out) near 1.58%. "Getting there's expensive," Story warned, urging attention to local‑level effects.

Rural utility interests backed aspects of the proposal. Gary Wiens, CEO of the Montana Electric Cooperatives Association, told the committee the state’s electric distribution co‑ops serve all 56 counties and that property‑tax relief would help co‑ops whose delivery networks cover long distances with low customer density. "We serve in all 56 counties," Wiens said, adding that the bill would assist co‑ops in protecting members from higher power delivery costs.

The Department of Revenue provided informational support. Jared Isom, an economist with the department, said he prepared the department’s fiscal estimates and would answer technical questions. Trevis and witnesses cited the department’s fiscal note, which the sponsor described as showing large statewide impacts: the sponsor noted the fiscal note estimates a $1.2 billion reduction in statewide taxable value and flagged a $578 million decrease tied to class 9 revaluation in the department's summary.

Committee members pressed witnesses on distributional effects, local revenue mechanics and the bill’s interaction with Montana Code 15‑10‑420 (the mill‑levy growth statute). Senator Sandra Ellsworth asked whether schools would raise mills to recover lost revenue, diminishing homeowner benefit; Story and department staff explained outcomes vary by the mix of property in each taxing jurisdiction and by whether mills are allowed to float. Department staff used a numeric example to show how a large taxable‑value cut combined with a mill cap could dramatically reduce local revenue if mills did not adjust.

The sponsor acknowledged the fiscal note produced questions and said he would continue work to refine the bill. No formal action or vote was taken; the hearing closed and the committee deferred further work pending fiscal notes and possible amendments.

The committee is scheduled to take executive action on bills heard this week once fiscal notes and any amendments are available.