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April 25, 2025

Week 16 Legislative Update from Representative Shane Klakken

With less than 10 days to go in the Montana 69th legislative session, property tax relief is receiving our undivided attention. We have both HB 231 and SB 542 in the process as property tax options that have every intention to meaningfully deliver on this top issue. In the last days we have sent most of our remaining priority bills to the governor, including income and property tax relief, and quality education and environmental reform.

By the time you read this information the Montana 69th Legislative Session may be complete.

HB 140 – Passed Senate Third 4/22 (45-5) – Representative Schomer
Provides property tax relief for first responders injured in the line of duty and to the spouse of a first responder killed in the line of duty.

HB 337 – Passed Senate Third 4/22 (34-16) – Speaker Ler - Signing Ceremony 4/28
Makes a number of income tax improvements including increasing the earned income tax credit, increasing the amount of earned income before increase in tax rate, and changes the net long term capital gains tax.

HB 483 – Passed Senate Third 4/22 (46-4) – Representative Sprunger
Reduces the general property tax rates, while leaving the 95 mills for schools unchanged. The bill also requires the mills to be bought down.

SB 542 – Passed House Third 4/24 (72-27) - Senator Galt
Lowers property tax rates across the board and provides Montanans a $400 rebate. Agriculture rates will be lower in year two and commercial rates will not exceed where they were in 2023.

HB 231 – Passed Senate Third 4/25 (25-24) - Representative Jones
This bill establishes new reduced tax rates for principal residences and long-term rental properties, creating a tiered tax structure based on property value. Homeowners and long-term rental property owners can apply for lower tax rates, with the rate depending on the property's market value relative to the median residential value. The bill introduces a $400 property tax rebate for tax year 2024 for qualifying principal residences and creates a new Property Tax Assistance Account to fund these rebates. For residential properties, the tax rates range from 0.76% to 1.9%, depending on the property's value, with lower rates for properties at or below the median residential value. Commercial properties will also see tax rate adjustments, with rates set at 1.5% for properties valued up to six times the median commercial value and 1.9% for properties valued above that threshold.

SB 117 – Passed House Third 4/15 (45-61) – Senator Zolnikov
This bill allows cities, counties, and consolidated city-counties to establish a "large taxpayer reserve account" where they must deposit 10% of revenue from newly taxable property (excluding class four property). The funds in this account can only be used if a large taxpayer permanently ceases operations or experiences a significant decrease in taxable value (defined as a 25% or more reduction). When such circumstances occur, the funds can be used to pay outstanding bonds, decrease mill levies, attract new industry, provide employment incentives, or invest in infrastructure. The bill also modifies how governmental entities calculate property tax levies by increasing the inflation limitation to not exceed 4% (previously one-half of the average inflation rate) and adjusting how newly taxable property is incorporated into levy calculations.
General Bills:

HB 252 – Passed Senate Third 4/25 (43-7) - Representative Jones
This creates the STARS Act, which offers additional funding to schools that increase beginner teacher pay, compress pay scales, have higher graduation rates, and offer more dual college or trade credit programs. This bill is a huge win for funding rural schools, while also incentivizing schools to provide the quality education all Montanans deserve.

HB 719 – Passed Senate Third 4/25 (32-18) – Representative Mitchell
Requires applicants for voter registrations to include their birthdate and requires ballot certifiers to cross check the birthdate on ballots with the voter registration in certain circumstances.

SB 45 – Passed Senate Third 4/25 (31-18) – Senator McGillvray
Creates the Montana Judicial Performance Evaluation Commission. This is an independent commission that will evaluate Supreme Court and District Court justices in order to provide voters with the most accurate information on a justices’ political and social bias.

SB 437 – Passed House Third 4/25 (55-44) – Senator Glimm
Defines the terms male, female, man, woman, father, mother, and biological sex in Montana code.

Go to LegMT.gov to learn more about these and other bills.

Shane Klakken (R) is the Representative for House District 37.

Shane.Klakken@legmt.gov 406-217-6107

Be sure to contact Senator Barry Usher when you have a need:

Barry.Usher@legmt.gov 406-671-6000

SPECIAL ANNOUNCEMENT: Join Rep Klakken, Rep Gregg, and Sen Usher in the Yogo Inn at 6:00pm on May 12th for a post-legislative session TOWNHALL to hear our impression about the 69th Montana Legislative Session.

Representative Klakken
House District 37

HB 337 advanced with all Republican senators in support and all Senate Democrats opposed.HELENA, Mont.— The Senate advanced legislation today to provide significant income tax relief to Montanans, which has been a top priority of constituents and Senate Republican leaders alike this session.

House Bill 337, sponsored by Speaker Brandon Ler, R-Savage, includes a variety of measures to ease the burden on Montana taxpayers. The bill raises the income threshold for the higher income tax rate, meaning more Montanans will pay the lower 4.7% rate, and reduces the higher rate from 5.9% to 5.65%.

“Montanans work hard for their money, and HB 337 ensures they keep more of it – now and in the future,” Ler said. “HB 337 delivers real, meaningful income tax relief for working families across our state.”

In addition to the tax rate adjustments, HB 337 also raises the earned income tax credit from 10% to 20%.

The bill is the result of months of discussion on tax relief and reform at the legislature, serving as one aspect of a broader effort to reduce the income and property tax burdens on Montana residents.

“We have been working hard this session to find ways put money back into the pockets of Montana taxpayers. HB 337 does exactly that by lowering income tax for hundreds of thousands of Montanans,” Senate Tax Committee Chair Greg Hertz, R-Polson, and Vice Chair Becky Beard, R-Elliston, said.

The Senate removed amendments to HB 337 in order to pass the same version as previously approved by the House of Representatives, ensuring the bill quickly reaches Governor Greg Gianforte to be signed into law.

Representative Klakken

House District 37

Long-term property tax reform that will reduce future tax increases is headed to Governor Greg Gianforte’s desk after Senate Bill 117 cleared its final vote in the legislature yesterday. 

Sponsored by Sen. Daniel Zolnikov, R-Billings, SB 117 ensures that property taxes collected on new development are used to offset taxes paid by existing homeowners and businesses. 

“Montana is growing, especially in our larger cities where property taxes are the highest, and those new developments bring in a lot of new property tax revenue” Zolnikov said. “SB 117 addresses runaway property tax increases by making sure money from all that new development is used to reduce property taxes for existing homeowners.” 

SB 117 passed both chambers of the legislature with overwhelming Republican support. It was based on Zolnikov’s SB 511 that narrowly failed in the 2023 legislative session. 

“We’ve got plenty more work to do on property taxes before we wrap up the session, but SB 117 is an important structural reform that will help contain property tax increases heading into the future and we got it across the finish line,” Zolnikov said. “This a long-term solution to a long-term problem of endless government growth.” 

Representative Klakken

House District 37