�����������TO:�All Concerned Persons

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1.�On August 21, 2008, at 2:30 p.m., a public hearing will be held in the Four- East Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the amendment of the above-stated rules.

Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana.

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2.�The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice.�If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., August 8, 2008, to advise us of the nature of the accommodation that you need. �Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail [email protected].

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3.�The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:

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42.18.110�2009 RESIDENTIAL REAPPRAISAL PLAN�(1) through (6)(e) remain the same.

(7)�Residential lots and tracts are valued through the use of CALP models.�Homogenous areas within each county are geographically defined as neighborhoods.�The CALP models reflect January July 1, 2008, land market values.

(8) through (13) remain the same.

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AUTH:�15-1-201, 15-7-111, MCA

IMP:�15-7-111, MCA

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����������� Reasonable Necessity:�The proposed amendments to ARM 42.18.110, 42.18.113, 42.18.122, and 42.18.124 will change the base year date for the 2009 Reappraisal from January 1, 2008, to July 1, 2008.�Historically, the department has used sales information that has occurred from the beginning of the reappraisal cycle until the base year date.�Without this change, that would mean sales from January 1, 2003, through December 31, 2007.�With the ongoing changes in the national housing market due to the subprime mortgage situation, the department is undertaking several extraordinary measures to help ensure that the 2009 reappraisal values reflect market value.�One of those measures under consideration has been extending the base year date from January 1, 2008, to July 1, 2008.�The amendments to the rules will reflect the department adopting that proposal and approach.�The additional sales that will be collected during that time period and that will become a part of the department's market modeling/sales comparison valuation approach will result in the department more accurately determining the market value of residential, commercial, and agricultural properties for the 2009 reappraisal. �The proposal to change the base year date, as identified in the proposed rules, has been discussed with the Revenue and Transportation Interim Committee.

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42.18.113�2009 COMMERCIAL REAPPRAISAL PLAN�(1) through (6)(e) remain the same.

����������� (7)�Commercial lots and tracts are valued through the use of CALP models.�Homogeneous areas within each county are geographically defined as neighborhoods.�The CALP models reflect January July 1, 2008, land market values.

����������� (8) through (13) remain same.

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AUTH:�15-1-201, 15-7-111, MCA

IMP:�15-7-111, MCA

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����������� REASONABLE NECESSITY:�The department is proposing to amend ARM 42.18.113 because commercial property is required to be reappraised on the same schedule as residential.

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����������� 42.18.122�REVALUATION MANUALS�(1) remains the same.

����������� (2)�For the reappraisal cycle beginning January 1, 2009, the 2008 Montana Appraisal Manual, adjusted for local conditions, will be used for valuing residential and agricultural/forest lands real property.�The cost base schedules reflect January July 1, 2008, cost information.

����������� (3) remains the same.

(4)�For the reappraisal cycle beginning January 1, 2009, the 2008 Montana Appraisal Manual, adjusted for local conditions, will be used for valuing commercial and industrial real property.�If the property is not listed in the 2008 Montana Appraisal Manual, other construction cost manuals such as Marshall Valuation Service; Richardson Engineering Services, Inc., entitled "Process Plant Construction Estimating Standards"; or R.S. Means Company, Inc., entitled "Building Construction Cost Data" will be used with a publication date as close to the 2008 Montana Appraisal Manual as possible.�The cost base schedules reflect January July 1, 2008, cost information.

����������� (5) and (6) remain the same.

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AUTH:�15-1-201, 15-7-111, MCA

IMP:�15-7-111, MCA

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����������� REASONABLE NECESSITY:�The department is proposing to amend ARM 42.18.122 because agricultural improvements are required to be reappraised on the same schedule as residential property.

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����������� 42.18.124�CLARIFICATION OF VALUATION PERIODS�(1) and (1)(a) remain the same.

(b)�For the taxable years from January �July 1, 2009, through December 31, 2014, all property classified in 15-6-134, MCA, (class four) must be appraised at its market value as of January 1, 2008.

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AUTH:�15-1-201, 15-7-111, MCA

IMP:�15-6-134, 15-7-103, 15-7-111, MCA

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����������� REASONABLE NECESSITY:�The department is proposing to amend ARM 42.18.124 for the same reasons as stated with regard to the proposed amendments to ARM 42.18.110, 42.18.113, and 42.18.122.

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4.�Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing.�Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail [email protected] and must be received no later than August 29, 2008.

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5.�Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

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6.�An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes."�The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered.�In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

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7.�The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.�Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters.�Notices will be sent by e-mail unless a mailing preference is noted in the request.�Such written request may be mailed or delivered to the person in 4 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

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8.�The bill sponsor notice requirements of 2-4-302, MCA, do not apply.

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/s/ Cleo Anderson���������������������������� /s/ Dan R. Bucks

CLEO ANDERSON������������������������� DAN R. BUCKS

Rule Reviewer���������������������������������� Director of Revenue

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Certified to Secretary of State July 21, 2008