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Panel narrows, then tables bill that would increase taxes on large nonprofit-owned farmland
Summary
House Bill 928, which would have applied a higher tax multiplier to contiguous agricultural parcels of 2,500 acres or more owned by certain nonprofits, was amended to the 2,500-acre threshold (amendment passed 12–5), failed final passage 8–9 and was moved to the table after opponents raised constitutional equal-protection and equalization concerns and practical impacts for land trusts and conservation partnerships.
Sponsor Brandon Lier introduced House Bill 928, a proposal to revise the tax rate for agricultural property owned by certain nonprofit corporations, arguing that nonprofits buying ag land can out-compete beginning farmers and that changing tax treatment would "make the playing field even." The sponsor said the bill would target large nonprofit holdings and mentioned a 10-times property tax multiplier in his opening remarks.
Proponents including Todd Devlin (Prairie County Commissioner) and Charles Denowh of United Property Owners of Montana argued nonprofits buying large parcels remove land from production and harm rural economies. Denowh cited the American Prairie Reserve as an example of a large-scale buyer whose mission and land purchases have prompted local concern.
Opponents — including Adam Jespersen of the Montana Nonprofit Association, representatives of several land trusts (The Nature Conservancy, Montana Land Reliance, Prickly Pear Land Trust, Gallatin Valley Land Trust, Ruby Habitat Foundation and others) and conservation groups — told the committee the measure is likely to raise constitutional issues because Montana tax classifications are based on land use rather than owner status. Adam Jespersen said applying a different tax rate by corporate form risks violating equal protection and unfairly targets many charitable organizations that own land for conservation, recreation, military-readiness partnerships or to lease back to local producers.
Witnesses described practical consequences: land trusts said higher property taxes would reduce their ability to buy and temporarily hold parcels to lease to beginning farmers, support military readiness partnerships near Fort Harrison, or provide parks for underserved communities. The Rancher Stewardship Alliance said some nonprofit-led solutions ("grass bank" or lease-back models) provide affordable grazing and mentorship for beginning producers and would be impeded.
In executive action the committee considered an amendment to narrow the policy to "agricultural land consisting of continuous parcels of 2,500 acres or more acquired after the effective date." Miss Shirley read the amendment; the amendment passed on a roll call 12–5. On final roll call the amended bill failed, 8–9. Vice Chair Minor then moved to table HB 928 and the motion carried, moving the bill to the committee table.
Committee members raised several open questions during Q&A: how many nonprofits would be affected (witnesses said only a small number), how classifications and exemptions operate for nonprofits under current law, administrative burdens on the Property Assessment Division, and whether a fiscal note would materialize (a fiscal note had been requested on 03/29 but was not yet printed at the hearing).
