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69th Legislature 2025 SB 550
- 1 - Authorized Print Version – SB 550
ENROLLED BILL
AN ACT REVISING CLASS FIVE PROPERTY TO INCLUDE CERTAIN TELECOMMUNICATIONS
PROPERTY; AMENDING SECTION 15-6-135, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE
AND A RETROACTIVE APPLICABILITY DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-6-135, MCA, is amended to read:
"15-6-135. Class five property -- description -- taxable percentage -- exemption. (1) Class five
property includes:
(a) all property used and owned by cooperative rural electrical and cooperative rural telephone
associations organized under the laws of Montana, except property owned by cooperative organizations
described in 15-6-137(1)(a);
(b) air and water pollution control and carbon capture equipment as defined in this section;
(c) any personal or real property used primarily in the production of ethanol-blended gasoline
during construction and for the first 3 years of its operation;
(d) all land and improvements and all personal property owned by a research and development
firm, provided that the property is actively devoted to research and development;
(e) machinery and equipment used in electrolytic reduction facilities; and
(f) all property used and owned by persons, firms, corporations, or other organizations that:
(i) are engaged in the business of furnishing telecommunications services exclusively to rural
areas or to rural areas and cities and towns of 1,200 permanent residents or less; or
(ii) furnish telecommunications services in or own property in not more than three counties.
(2) (a) "Air and water pollution control and carbon capture equipment" means that portion of
identifiable property, facilities, machinery, devices, or equipment certified as provided in subsections (2)(b) and
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69th Legislature 2025 SB 550
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ENROLLED BILL
(2)(c) and designed, constructed, under construction, or operated for removing, disposing, abating, treating,
eliminating, destroying, neutralizing, stabilizing, rendering inert, storing, or preventing the creation of air or
water pollutants that, except for the use of the item, would be released to the environment. This includes
machinery, devices, or equipment used to capture carbon dioxide or other greenhouse gases. Reduction in
pollutants obtained through operational techniques without specific facilities, machinery, devices, or equipment
is not eligible for certification under this section.
(b) Requests for certification must be made on forms available from the department of revenue.
Certification may not be granted unless the applicant is in substantial compliance with all applicable rules, laws,
orders, or permit conditions. Certification remains in effect only as long as substantial compliance continues.
(c) The department of environmental quality shall promulgate rules specifying procedures,
including timeframes for certification application, and definitions necessary to identify air and water pollution
control and carbon capture equipment for certification and compliance. The department of revenue shall
promulgate rules pertaining to the valuation of qualifying air and water pollution control and carbon capture
equipment. The department of environmental quality shall identify and track compliance in the use of certified
air and water pollution control and carbon capture equipment and report continuous acts or patterns of
noncompliance at a facility to the department of revenue. Casual or isolated incidents of noncompliance at a
facility do not affect certification.
(d) To qualify for the exemption under subsection (3)(b)(i), the air and water pollution control and
carbon capture equipment must be placed into service after January 1, 2014, for the purposes of environmental
benefit or to comply with state or federal pollution control regulations. If the air or water pollution control and
carbon capture equipment enhances the performance of existing air and water pollution control and carbon
capture equipment, only the market value of the enhancement is subject to the exemption under subsection
(3)(b)(i).
(e) Except as provided in subsection (2)(d), equipment that does not qualify for the exemption
under subsection (3)(b)(i) includes but is not limited to equipment placed into service to maintain, replace, or
repair equipment installed on or before January 1, 2014.
(f) A person may appeal the certification, classification, and valuation of the property to the
Montana tax appeal board. Appeals on the property certification must name the department of environmental
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quality as the respondent, and appeals on the classification or valuation of the equipment must name the
department of revenue as the respondent.
(3) (a) Except as provided in subsection (3)(b), class five property is taxed at 3% of its market
value.
(b) (i) Air and water pollution control and carbon capture equipment placed in service after January
1, 2014, and that satisfies the criteria in subsection (2)(d) is exempt from taxation.
(ii) (A) Except as provided in subsection (3)(b)(ii)(B), fiber optic or coaxial cable, as defined in 15-
6-156, installed and placed in service on or after July 1, 2021, is exempt from taxation for a period of 5 years
starting from the date the fiber optic or coaxial cable was placed in service, after which the property exemption
is phased out at a rate of 20% a year, with the property being assessed at 100% of its taxable value after a 10-
year period. In order to maintain the exemption, the owner of fiber optic or coaxial cable shall reinvest the tax
savings from the exemption by installing and placing in service new fiber optic or coaxial cable in Montana
within 2 years from the date the owner first claimed the exemption provided for in this subsection (3)(b)(ii)
without charging those costs to the consumer. The cost of installing or placing into service fiber optic or coaxial
cable with the reinvested tax savings without charging those costs to the consumer must be equal to or greater
than the value of the tax savings received from the tax incentive.
(B) Fiber optic or coaxial cable installed using federal funds received pursuant to section 9901 of
the American Rescue Plan Act is not eligible for exemption from taxation under this section.
(C) An entity that claims a tax exemption under this subsection (3)(b)(ii) shall maintain adequate
books and records demonstrating the investment the owner made when installing and placing in service fiber
optic or coaxial cable in Montana. The property owners shall make those records available to the department
for inspection upon request.
(4) (a) The property taxes exempted from taxation by subsection (3)(b)(ii) are subject to
termination or recapture if the department determines that the owner failed to install and place in service new
coaxial or fiber cable in Montana as provided in subsection (3)(b)(ii) or otherwise violates the provisions of this
section.
(b) Upon notice from the department that the owner's exemption has terminated, any local
governing body may recapture taxes previously exempted in that jurisdiction, plus interest and penalties for
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nonpayment of property taxes as provided in 15-16-102, during any tax year in which an exemption under the
provisions of subsection (3)(b)(ii) was improper. Any recapture must occur within 10 years after the end of the
calendar year in which the exemption was first claimed.
(c) The recapture of abated taxes may be canceled, in whole or in part, if the local governing body
determines that the taxpayer's failure to meet the requirements is a result of circumstances beyond the control
of the taxpayer."
Section 2. Effective date. [This act] is effective on passage and approval.
Section 3. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109,
to property tax years beginning after December 31, 2024.
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I hereby certify that the within bill,
SB 550, 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. 550
INTRODUCED BY D. FERN
AN ACT REVISING CLASS FIVE PROPERTY TO INCLUDE CERTAIN TELECOMMUNICATIONS PROPERTY;
AMENDING SECTION 15-6-135, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A
RETROACTIVE APPLICABILITY DATE.