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69th Legislature 2025 SB 458
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ENROLLED BILL
AN ACT ALLOWING FINANCING OF PUBLIC SAFETY AND RESILIENCY IMPROVEMENT PROJECTS
THROUGH COMMERCIAL PROPERTY-ASSESSED CAPITAL ENHANCEMENTS PROGRAMS; AMENDING
SECTIONS 90-4-1302, 90-4-1304, 90-4-1305, 90-4-1306, AND 90-4-1307, MCA; AND PROVIDING AN
EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 90-4-1302, MCA, is amended to read:
"90-4-1302. Definitions. As used in this part, unless the context requires otherwise, the following
definitions apply:
(1) "Authority" means the Montana facility finance authority created in 2-15-1815.
(2) "Commercial property-assessed capital enhancements program" or "program" means a
program established in accordance with this part.
(3) "District" means a district that is established under this part by a local government and that lies
within the local government's jurisdictional boundaries. A local government may create more than one district
under a program.
(4) "Energy conservation measure" means a permanent cost-effective energy improvement fixed
to real property, including new construction, and intended to decrease energy or water consumption and
demand, including a product, device, or interacting group of products or devices on the customer's side of the
meter that uses energy technology to generate electricity, provide thermal energy, or regulate temperature. The
term includes but is not limited to:
(a) insulation in walls, roofs, floors, foundations, or heating and cooling distribution systems;
(b) storm windows and doors, including multiglazed windows and doors, heat-absorbing or heat-
reflective glazed windows, coated window and door systems, additional glazing, reductions in glass area, and
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other window and door system modifications that reduce energy consumption;
(c) automated energy control systems;
(d) heating, ventilating, or air-conditioning and distribution system modifications or replacements;
(e) caulking, weather-stripping, or air sealing;
(f) replacement or modification of lighting fixtures to reduce the energy use of the lighting system;
(g) energy recovery systems;
(h) daylighting systems;
(i) installation or upgrades of electrical wiring or outlets to charge a motor vehicle that is fully or
partially powered by electricity;
(j) fuel source changes that result in cost savings;
(k) measures to reduce the usage of water or to increase the efficiency of water usage; and
(l) any other installation or modification of equipment, devices, or materials approved as a utility
cost-saving measure by the governing body.
(5) "Energy conservation project" means the installation or modification of an energy conservation
measure or the acquisition, installation, or improvement of a renewable energy system.
(6) "Governing body" means the legislative authority of a local government.
(7) "Local government" means a county, city, town, or a consolidated city-county.
(8) (a) "Person" means an individual, firm, partnership, association, corporation, unincorporated
joint venture, or trust that is organized, permitted, or existing under the laws of this state or any other state,
including a federal corporation, or a combination of individuals, firms, partnerships, associations, corporations,
unincorporated joint ventures, or trusts.
(b) The term does not include a local government.
(9) "Public safety and resiliency improvement" means one or more fixed installations or
modifications to eligible commercial real property that are designed to improve a property's public safety or
resiliency by improving the eligible real property's:
(a) structural integrity for seismic events;
(b) indoor air quality;
(c) durability to resist wind, fire, and flooding;
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(d) ability to withstand an electric power outage;
(e) stormwater control measures, including structural and nonstructural measures to mitigate
stormwater runoff; and
(f) firearm storage infrastructure for use by the public pursuant to a firearm hold agreement as
provided in 27-1-748.
(10) "Public safety and resiliency improvement project" means the installation or modification of a
public safety and resiliency improvement.
(9)(11) "Real property" means a privately owned commercial or industrial facility, covered multifamily
housing accommodation as defined in 49-2-305(6), or agricultural property.
(10)(12)"Record owner" means the person or persons possessing the most recent fee title as shown by
the records of the county clerk and recorder.
(11)(13)"Renewable energy" has the meaning provided in 15-24-3102.
(12)(14)"Renewable energy system" means a fixture, product, device, or interacting group of fixtures,
products, or devices on the customer's side of the meter that uses one or more forms of renewable energy to
generate electricity or to reduce the use of nonrenewable energy. The term includes a biomass stove but does
not include an incinerator or a digester."
Section 2. Section 90-4-1304, MCA, is amended to read:
"90-4-1304. Program authorized -- contracts. (1) In accordance with 90-4-1305 and 90-4-1306, a
governing body may establish a commercial property-assessed capital enhancements program and may create
a district or districts under the program.
(2) (a) The governing body may enter into a contract with a record owner of real property within a
district to finance one or more energy conservation projects or public safety and resiliency improvement
projects on the real property included in a district in accordance with this part.
(b) The contract may provide for the repayment of the cost of an energy conservation project or
public safety and resiliency improvement project through an assessment in accordance with 90-4-1307 on real
property. The financing to be repaid through assessments must be provided by a third party.
(c) Financing may include the cost of materials and labor necessary for the installation or
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modification of energy conservation projects or public safety and resiliency improvement projects, permit fees,
inspection fees, application and administrative fees, bank fees, and all other fees incurred by the record owner
for the energy conservation project or public safety and resiliency improvement project on a specific or pro rata
basis, as determined by the governing body."
Section 3. Section 90-4-1305, MCA, is amended to read:
"90-4-1305. Elements of program plan -- contract requirements. (1) Prior to establishing a
program in accordance with 90-4-1306, the authority shall prepare a program plan. Subject to subsections (2)
through (4), the program plan must include:
(a) provisions for marketing the program and providing participant education;
(b) the types of energy conservation projects or public safety and resiliency improvement projects
that may be financed under the program;
(c) options for raising capital to finance energy conservation projects or public safety and resiliency
improvement projects under the program. Options may include but are not limited to owner-arranged financing
from a commercial lender. If owner-arranged financing is used, the governing body may impose an assessment
pursuant to 90-4-1307 and make payments to the authority, and the authority will distribute those payments to
the commercial lender.
(d) quality assurances and antifraud measures;
(e) minimum requirements for a contractor to complete an energy conservation project or public
safety and resiliency improvement project;
(f) clearly defined work standards for contractors;
(g) contractor management systems and procedures designed to monitor contractor performance
and to manage, track, and resolve consumer complaints; and
(h) a description of the proposed financial arrangement and contract terms between the local
government and record owners pursuant to subsection (3).
(2) (a) A program plan for energy conservation projects must include an energy analysis
completed by a third party to determine cost and energy savings.
(b) Energy savings calculations and analysis completed in accordance with subsection (2)(a) must
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be completed by a licensed or certified building professional approved by the authority.
(c) When an energy conservation project is completed, the contractor who completed the project
shall submit written verification to the authority that the energy conservation project was properly installed and
is operating as intended.
(3) A proposed financial arrangement must be included in a program plan in accordance with
subsection (1)(c) and must include:
(a) application, administration, or other program fees that will be charged to record owners
participating in the program that will be used to finance costs incurred by the authority, local government, or
both as a result of the program;
(b) a requirement that a contract between the governing body and a record owner is invalid and
unenforceable unless the holder of a mortgage, trust indenture beneficiary, or loan servicer provides the
governing body with each of the following:
(i) an executed subordination agreement, properly notarized and executed within 3 months prior
to the application for a contract;
(ii) a record of the subordination agreement from the office of the county clerk and recorder in the
county where the property is located; and
(iii) a secretary's certificate or substantially similar certification that the person who executed the
subordination agreement is authorized to sign such an agreement on behalf of the mortgage holder, trust
indenture beneficiary, or loan servicer; and
(c) a model contract between a governing body and a record owner containing the terms and
conditions of financing and an assessment that meets the requirements of 90-4-1307 under the program. The
model contract must include full disclosure of costs, including the effective interest rate of the assessment in
accordance with 90-4-1307, any administrator fees, the estimated payment schedule, and the placement of a
lien on the real property.
(4) (a) Prior to a local government and a record owner for a commercial property-assessed capital
enhancements project entering into a contract under a program established pursuant to 90-4-1306, the
authority shall obtain independent verification from the record owner that the record owner understands and
accepts the terms of the contract and shall make the verification available to the local government.
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(b) The contract must allow the record owner to cancel the contract within 3 business days of
signing the contract.
(c) The contract must include full disclosure that by entering into the contract, the record owner
may incur a property tax lien on the real property included under the contract.
(5) The contract must include requirements that contractors and any subcontractors use a skilled
and trained workforce. Contracts signed must require contractors and subcontractors to give preference to the
employment of bona fide Montana residents, as defined in 18-2-401, in the performance of the projects, if the
Montana residents have substantially equal qualifications to those of nonresidents."
Section 4. Section 90-4-1306, MCA, is amended to read:
"90-4-1306. Establishment of program. (1) To establish a commercial property-assessed capital
enhancements program, a governing body shall:
(a) adopt a resolution of intent that includes:
(i) a statement of intent to establish a commercial property-assessed capital enhancements
program describing the role of the governing body and the role of the authority in administering the program;
(ii) the types of energy conservation projects or public safety and resiliency improvement projects
that may be included in the program;
(iii) a reference to the program plan required by 90-4-1305 and a location where the plan is
available for public inspection; and
(iv) the time and place for a public hearing on the proposed program;
(b) hold a public hearing at which the public may comment on the proposed program and the
program plan required by 90-4-1305; and
(c) adopt a resolution establishing the program and setting the terms and conditions of the
program, including:
(i) how the governing body will meet the program plan requirements established by the authority
in 90-4-1305. To meet the requirement of this subsection (1)(c)(i), the resolution may incorporate a program
plan or an amended version of a program plan by reference.
(ii) a description of the aspects of the program that may be changed without a public hearing and
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the aspects that may be changed only after a public hearing;
(iii) identification of an official authorized to enter into a program contract on behalf of the program
with entities providing funding for the program; and
(iv) identification of an official authorized to enter into a program contract on behalf of the
governing body with record owners.
(2) A commercial property-assessed capital enhancements program may be changed by resolution
of the governing body. Adoption of the resolution must be preceded by a public hearing if required pursuant to
subsection (1)(c)(ii)."
Section 5. Section 90-4-1307, MCA, is amended to read:
"90-4-1307. Assessments. (1) (a) A local government may impose an assessment under a
commercial property-assessed capital enhancements program pursuant to a written contract with the record
owner of the real property to be assessed.
(b) The term of the assessment may not exceed the useful life of an energy conservation project or
public safety and resiliency improvement project paid for by the assessment.
(2) Before entering into a contract with a record owner under a program, the local government
shall verify that:
(a) delinquent taxes, special assessments, or water or sewer charges are not due on the real
property; and
(b) delinquent assessments on the real property under a commercial property-assessed capital
enhancements program are not due.
(3) (a) An assessment imposed under a commercial property-assessed capital enhancements
program, including any interest on the assessment and any penalty, constitutes a program lien against the real
property on which the assessment is imposed from the date of the assessment until the assessment, including
any interest or penalty, is paid in full. The lien is for outstanding assessments only, runs with the real property,
and has the same priority and status as other property tax and assessment liens.
(b) A governing body has the same rights in the case of delinquency in the payment of an
assessment as it does with respect to delinquent property taxes. When the assessment, including any interest
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and penalty, is paid, the lien must be removed from the real property.
(4) (a) Except as provided in subsection (4)(b), installments of assessments due under a program
must be included in each tax bill issued under 15-16-101 and must be collected at the same time and in the
same manner as taxes collected under Title 15, chapter 16.
(b) Installments may be billed and collected as provided in a special assessment ordinance of
general applicability adopted by a local government."
Section 6. Effective date. [This act] is effective October 1, 2025.
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I hereby certify that the within bill,
SB 458, originated in the Senate.
___________________________________________
Secretary of the Senate
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
SENATE BILL NO. 458
INTRODUCED BY K. BOGNER
AN ACT ALLOWING FINANCING OF PUBLIC SAFETY AND RESILIENCY IMPROVEMENT PROJECTS
THROUGH COMMERCIAL PROPERTY-ASSESSED CAPITAL ENHANCEMENTS PROGRAMS; AMENDING
SECTIONS 90-4-1302, 90-4-1304, 90-4-1305, 90-4-1306, AND 90-4-1307, MCA; AND PROVIDING AN
EFFECTIVE DATE.