HB 27 Montana House · 2025 Regular Session

Remove automatic agricultural classification for certain parcels

HB 27 revises the criteria for classifying land as agricultural for property tax valuation. The bill introduces an application and review process for certain agricultural properties, moving away from automatic classification. It also increases the required annual gross income for parcels between 20 and 160 acres to qualify as agricultural land. Furthermore, it establishes a new "idle land" classification with a revised tax rate, replacing the prior "nonqualified agricultural property" classification, directly affecting property owners with these land types.

Issues: ✓ Budget & Taxes

Bill status died 3 of 5 stages cleared

Introduction

Dec 2024

Committee Review

Feb 2025

House Passage

Mar 2025

Senate Passage

Governor

Introduced Dec 6, 2024 Last action May 20, 2025

Maddy AI version diff · 3 comparisons

What changed between versions

HB0027_2(3).pdf → HB0027_2(4).pdf · 7 edits

MODERATE

The bill reorganizes the criteria for Class Three property by adding specific exemptions for nonproductive mining claims, sustenance use land, and large contiguous idle parcels. It clarifies that these specific land types are taxed based on their productive capacity rather than market value, while ensuring improvements on them are still assessed at market value. The changes aim to provide clearer tax treatment for diverse land uses previously not explicitly detailed in the statute.

Scope change

The scope of Class Three property eligibility was expanded to explicitly include nonproductive mining claims, sustenance use land, and large idle agricultural parcels, while maintaining their specific valuation rules.

ELIGIBILITY

Added nonproductive patented mining claims held for mineral development as eligible Class Three property, provided they are not used for residential, recreational, or commercial purposes.

Added sustenance use land as a specific category of Class Three property eligible for special tax treatment.

Added a new category for large contiguous idle agricultural parcels (20,640 acres or more but less than 160 acres) that are not eligible for standard agricultural valuation.

Added rental multifamily dwelling units to the definition of Class Four property.

DEFINITION

Reordered the statutory list of Class Three property items from (A) through (D) to (a) through (e) to accommodate the new categories.

REQUIREMENT

Updated the taxable percentage calculation for idle land to multiply the land value by seven times the standard agricultural tax rate.

Clarified that one acre of real property beneath improvements on Class Three or Class Four land must be valued at market value rather than productive capacity.

HB0027_1(6).pdf → HB0027_2.pdf · 7 edits

MODERATE

This bill replaces the existing 'sustenance use' land classification with a new 'sustenance use land' category and introduces a new 'nonproductive forest land' classification. The changes significantly alter eligibility criteria for agricultural tax breaks, requiring land to be actively cultivated for food production with owner-occupied housing, while removing provisions for nonproductive mining claims and adjusting acreage thresholds. Additionally, the bill adds a new requirement for a Realty Transfer Certificate to include the sales price for certain agricultural and timber properties.

Scope change

The bill expands the scope of tax classifications to include a new 'nonproductive forest land' category and modifies the criteria for agricultural and sustenance use land, effectively narrowing eligibility for agricultural tax breaks to smaller, actively cultivated food-producing parcels with owner-occupied residences.

ELIGIBILITY

Replaced the 'sustenance use' land classification with a new 'sustenance use land' category that requires at least 60% of the land area to be actively cultivated for food production and mandates an owner-occupied residential dwelling on the parcel.

Removed eligibility for nonproductive patented mining claims to be classified as agricultural land.

Added a new 'nonproductive forest land' classification to replace the previous 'idle land' category for certain forest properties.

Adjusted acreage thresholds for agricultural land eligibility, changing the minimum contiguous parcel size from 20 acres to 640 acres for certain classifications.

Removed the income cap of $1,500 for sustenance use land and introduced a new $500 annual gross income limit derived from surplus production.

REQUIREMENT

Added a requirement for a Realty Transfer Certificate to include the sales price for certain agricultural and timber property transfers.

Added a new requirement for property owners to submit an annual 'Sustenance Use Attestation' form by March 1, including documentation of crop inventory and active cultivation hours.

Floor votes · House Mar 20, 2025

How they voted

89–9

Passed · 2 other

Total votes 100

Mar 20, 2025

D Democratic42

34 Yea 6 Nay 2

80% Yea

R Republican58

55 Yea 3 Nay

94% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 20, 2025

House · Passed

House Vote: pass (89-9-2)

house

Feb 12, 2025

Lower · Passed

(H) Committee Report - (H) Taxation

lower

Feb 12, 2025

Lower · Passed

(H) Committee Executive Action - (H) Taxation

lower

Dec 20, 2024

Committee

(H) Referred to Committee - (H) Taxation

lower

Dec 6, 2024

Introduced

(H) Introduced

lower

1 primary · 0 co-sponsors