5. Constitutional Initiative No. 99Cl"ty of Ka
Post Office Box 1997 - Kalispell, Montana 5990 3-1997 - Telephone (406) 758-7000 Fax - (406) 75 8-775 8
REPORT To: Honorable Mayor and City Council
FROM: James H. Patrick, City Manager
SUBJECT: 2008 Ballot issues: CI-99
MEETING DATE: January 14, 2008
BACKGROUND: Attached is the proposed initiative, CI-99. It would limit property tax
increases to 1.5% annually. It would also provide that the value of property would be based on
the sales price, which goes all the way back to Proposition 13 in California.
The initiative has been approved for solicitation, and the proponents will have until late June to
collect more than 40,000 signatures.
Respectfully submitted,
James H. Patrick, City Manager
240E Ballot Issue CI-99
THE COMPLETE TEXT OF
CONSTITUTIONAL INITIATIVE NO. 99
Section 1. Article VIII, section 3, of the
Constitution of the State of Montana is
amended to read:
"Section 3. Property tax administration --
limitation on annual property tax
increases. (1) Except as provided in
subsection (2), the state shall appraise,
assess, and equalize the valuation of all
property which is to be taxed in the manner
provided by law.
(2)(a) Except as provided in subsection (2)
(b), no taxing jurisdiction may increase
property taxes on any owner -occupied
residence in excess of 1.5% a year.
(i) An owner -occupied residence is a home,
structure, or improvement to real property
that is continuously occupied by the owner of
the residence as the owner's principal place of
residence for more than 180 days during
previous calendar year.
(ii) An owner -occupied residence includes
appurtenant land not exceeding 5 acres.
(iii) An owner -occupied residence, if part of a
multiple -dwelling structure, includes that
portion of the structure occupied as a
residence by the owner but does not include
areas owned by others or common areas of
the structure.
(b) (i) Except as provided in subsection (2)(b)
(ii), upon a purchase or change of ownership
of a residence, the tax increase limitation of
subsection (2)(a) does not apply in the first
tax year of changed ownership. The residence
must be taxed based on the greater of the
purchase price or the assessed value of the
residence as determine by the state.
00 If a change in ownership is to a spouse,
child, or grandchild of the owner,, the tax
limitation of subsection (2)(a) continues to
apply to the residence and tax increases must
be limited as if no change in ownership
occurred.
(c) This section does not prohibit the reduction
or elimination of property taxes on any real
property."
Section 2. Applicability. Section 1 initially
applies to an increase in property taxes that
are levied on an owner -occupied residence
after December 31, 2008 and would limit any
increase in property taxes that are levied in
tax year 2009.
BALLOT LANGUAGE
FOR
CONSTITUTIONAL
INITIATIVE NO. 99
CI-99
A CONSTITUTIONAL
AMENDMENT
PROPOSED BY
INITIATIVE
PETITION.
CI-99 amends the
Montana
Constitution to limit
increases in a
homeowner's
residential property
tax to no more than
1.5% a year. The
limit continues to
apply after a home
is transferred to the
owner's spouse,
child or grandchild.
When a home is
transferred to
anyone else, the
home is valued for
tax purposes at
either the purchase
price or the
assessed value,
whichever is greater.
CI-99 is effective
January 1, 2009.
CI-99 costs $2.2
million annually to
implement. It
reduces projected
state government
revenue by $1.7
million in 2010, and
by $7.5 million in
2013. It has a
greater impact on
local governments
and school districts,
which could reduce
projected spending,
increase taxes on
non-residential
property, or seek
additional state
funding.
[ ] FOR amending
the Montana
Constitution to limit
residential property
tax increases to
1.5% annually, and
base taxable value
of a transferred
home on purchase
price.
[ ] AGAINST
amending the
Montana
Constitution to limit
residential property
tax increases to
1.5% annually, and
base taxable value
of a transferred
home on purchase
price.