Mont. Admin. r. 42.20.501

Current through Register Vol. 23, December 6, 2024

Rule 42.20.501 - DEFINITIONS

The following definitions apply to this subchapter:

(1) "2014 tax year value" means the market value of a property which appears on the 2014 property tax record of that property.

(2) "Annual appraisal trend factor class five" means a factor used to annually reappraise class five qualifying air and water pollution control property, new industrial property, gasohol facilities, qualifying research and development firms, and electrolytic reduction facilities real property by trending their cost values up or down based on accepted cost indices.

(3) "CDU rating" means a composite rating of the overall condition, desirability, and usefulness of a structure, used nationally as a simple, direct, and uniform method of estimating accrued depreciation.

(4) "Current year phase-in value" is the difference between the reappraisal value and the value before reappraisal (VBR) times the phase-in percentage, added to the VBR. The current year phase-in value is the amount subject to tax each year, and is determined by the following formula:

Current year phase-in value =

[(Reappraisal (REAP) value - VBR) x phase-in %] + VBR

(5) "Destruction" means the removal or deletion of improvements, buildings, living areas, garages, and out-buildings caused by burning, razing, or natural disaster.

(6) "Dwelling unit" is defined as a building or portion of a building that contains living facilities with provision for sleeping, eating, cooking, and sanitation for one or more persons.

(7) "Full reappraisal to taxable value conversion factor for class four commercial property" is the total taxable value of class four commercial property divided by the total reappraisal value of the same class four commercial property.

(8) "Full reappraisal to taxable value conversion factor for class four residential" is the total taxable value of class four residential property divided by the total reappraisal value of the same class four residential property.

(9) "Improvement grade change" means a change in the quality of construction of an improvement. Each improvement grade signifies a different level of construction quality. Examples of improvement grades include, but are not limited to, the following:

(a) 1F-1 = cheap construction;

(b) 1F-5 = average construction; and

(c) 1F-9 = superior construction.

(10) "Land productivity change (grade change)" means a change in the productive capacity or yield of agricultural or forest land. In a land productivity change, the land use does not change; rather, the land as currently used simply becomes more or less productive. For example, a productivity change in grazing land may occur when it is discovered that the productivity potential has decreased due to a new saline seep on the land. Because the land continues to be used as grazing land, the department shall continue to classify the land as agricultural grazing land, but the grade of the grazing land may be changed to reflect its lessened productivity.

(11) "Land reclassification" means changing the use of land from one type of agricultural use to a different type of agricultural use. For example, a land reclassification occurs when agricultural land that was previously used as grazing land is converted to irrigated land. In a land reclassification, the land is dedicated to agricultural purposes both before and after the change in land use. It is this characteristic that distinguishes a land reclassification from the more general land use change.

(12) "Land split" means the division of a single property into two or more properties for the ultimate purpose of conveying one or more of the properties to a new owner or owners.

(13) "Land use change" means the conversion of a current use of land to a different, alternate use. Land splits shall be considered land use changes. Examples of land use changes contained in this definition include, but are not limited to, the following:

(a) agricultural land converted to tract land;

(b) forest land converted to tract land;

(c) forest land converted to agricultural land; or

(d) land that is converted to another use due to a subdivision of real property.

(14) "Living area" means any room or group of rooms designed as the living quarters of one family or household, equipped with cooking and toilet facilities, and having an independent entrance from a public hall or from the outside.

(15) "Neighborhood (NBHD) group percentage" means the percent of change in value from the total 2014 tax year value of the year before reappraisal to the total 2015 reappraisal value, excluding properties with new construction, for those homogeneous areas within each county or between counties that have been defined as a neighborhood group. The neighborhood group percentage is determined by using the following formula:

Neighborhood Group Percentage =

(Total 2008 NBHD REAP Value - Total 2015 NBHD Tax Year Value)/ Total 2014 NBHD Tax Year Value

(a) Individual neighborhood group percentages will be determined for residential land, commercial land, residential improvements, and commercial improvements.

(16) "New construction" means the construction, addition, or substitution of improvements, buildings, living areas, garages, and outbuildings; or the extensive remodeling of existing improvements, buildings, living areas, garages, outbuildings, land reclassification, and land use changes.

(17) "New construction trend factor for industrial property" means a factor used to adjust reappraisal values and VBRs (values before reappraisal) in instances where the property has new construction or destruction. The factor will be derived from nationally accepted cost indices.

(18) "Phase-in percentage" for tax years 2015 through 2020 is 16.6 percent per year. The phase-in percentage accumulates annually.

(19) The "previous year tax revenue" means the product of multiplying the previous tax year total taxable value for each taxing jurisdiction by the previous year mill levy for that taxing jurisdiction.

(20) "Reappraisal (REAP) value" means the full 2015 value determined for the current reappraisal cycle pursuant to 15-7-111, MCA, adjusted annually for new construction or destruction. The 2015 reappraisal value reflects a market value of the property on January 1, 2014. A current year REAP value is the same as the 2015 reappraisal value of the property if there is no new construction, destruction, land splits, land use changes, land reclassifications, land productivity changes, improvement grade changes, or other changes made to the property during 2015 or subsequent tax years.

(21) "Subdivision of real property" means the first sale of a land parcel that results in the land being taxable as class four as described in 15-6-134, MCA, or nonagricultural land as described in 15-6-133(1)(c), MCA.

(22) "Taxable market value" means that portion of the total market value subject to taxation after the total market value has been adjusted, if applicable, for the phase-in of value.

(23) "Value before reappraisal (VBR)" means the 2014 tax year value adjusted for any new construction or destruction that occurred in the prior year. The VBR for the 2015 tax year and subsequent years is the same as the 2014 tax year value if there is no new construction, destruction, land splits, land use changes, land reclassifications, improvement grade changes, or other changes made to the property during 2014 or subsequent tax years.

Mont. Admin. r. 42.20.501

TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2003 MAR p. 315, Eff. 2/28/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/2016.

AUTH: 15-1-201, 15-7-111, MCA; IMP: 15-7-111, 15-10-420, MCA