BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the adoption of New Rule I and amendment of ARM 42.21.140 and 42.21.158 relating to property taxes

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION AND AMENDMENT

 

TO:  All Concerned Persons

 

1.  On November 17, 2010, at 2:30 p.m., a public hearing will be held in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the adoption and 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.

 

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., November 8, 2010, 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) 444-4375; or e-mail [email protected].

 

3.  The proposed new rule does not replace or modify any section currently found in the Administrative Rules of Montana.  The proposed new rule provides as follows:

 

NEW RULE I  LIVESTOCK REPORTING REQUIREMENTS  (1)  A taxpayer who raises livestock in the state of Montana subject to the per capita fees under 15-24-921, MCA, and the requirement of a written statement under 15-24-903, MCA, must reply to the department's request for information.

(2)  The department must receive the completed statement no later than February 15.

(3)  If a taxpayer fails to return the statement during the timeframe set forth in (2), the department shall, after ten days' notice, assess a $25 penalty under 15-8-309, and 15-24-904, MCA.

 

AUTH:  15-1-201, MCA

IMP:  15-8-309, 15-24-903, 15-24-904, 15-24-921, MCA

 

REASONABLE NECESSITY:  The department is proposing to adopt New Rule I to assist the taxpayers who are required to file the livestock reporting information with the department.  The language being proposed in this new rule is currently contained in ARM 42.21.158 and is confusing to many taxpayers because the statutory reporting requirements for livestock are different from the personal property reporting requirements.  The language proposed in this new rule is being deleted from ARM 42.21.158 as shown below.

The department will develop a separate reporting form for livestock reporting in tax year 2012.  Currently, livestock reporting is included in the personal property reporting form.

 

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

 

42.21.140  OIL DRILLING RIGS  (1)  Bids for new rigs will be solicited The department will obtain pricing information from manufacturers of oil drilling rigs to determine current replacement costs based on the depth rating listed below.  The pricing information obtained will be used to determine current replacement cost based on the depth ratings shown below.  For each Each depth rating listed below for oil drilling rigs, there will consist of be two replacement cost categories.  One category will represent current replacement cost of a mechanical rig and the second category will represent current replacement cost of an electric rig.  Each rig as it is assessed will be placed in a value category based on its depth.

 

DEPTH CATEGORIES
Class		Depth Capacity
1	. . . . . . . . . . . . . . . . . . . . . . . . . . .	0     to  3,000 ft.
2	. . . . . . . . . . . . . . . . . . . . . . . . . . .	3,001 ft. to  5,000 ft.
3	. . . . . . . . . . . . . . . . . . . . . . . . . . .	5,001 ft. to  8,000 ft.
4	. . . . . . . . . . . . . . . . . . . . . . . . . . .	7,501 ft. to 10,000 ft.
5	. . . . . . . . . . . . . . . . . . . . . . . . . . .	10,001 ft. to 12,500 ft.
6	. . . . . . . . . . . . . . . . . . . . . . . . . . .	12,501 ft. to 15,000 ft.
7	. . . . . . . . . . . . . . . . . . . . . . . . . . .	15,001 ft. to 20,000 ft.
8	. . . . . . . . . . . . . . . . . . . . . . . . . . .	20,001 ft. and over

 

MANUFACTURER'S	SERVICE	WORKOVER
DEPTH RATING	RIG R.C.N	RIG R.C.N
0     -   3,000 ft.	$	$  285,209
3,001 ft. -   5,000 ft.		432,135
5,001 ft. -   7,500 ft.	868,250	654,750
7,501 ft. - 10,000 ft.	1,167,210	998,750
10,001 ft. - 12,500 ft.	1,265,500	1,130,600
12,501 ft. - 15,000 ft.	1,720,400	1,538,500
15,001 ft. - 20,000 ft.	1,990,100
20,001 ft. and over	2,036,047

 

The depth capacity for drilling rigs will be based on the "Manufacturers Depth Rating."  These replacement costs will then be depreciated to arrive at market value according to the schedule mentioned in (2).

(2) through (4) remain the same.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.21.140 to delete incorrect terminology which infers that the department solicits bids, as in a procurement action, to acquire replacement costs.  When in fact, all the department does is seek information regarding replacement costs from manufacturers.

The amendments are intended to add clarity which will assist the taxpayers in understanding the department's intended use of the pricing information obtained from manufacturers.

 

42.21.158  PROPERTY REPORTING REQUIREMENTS  (1)  Taxpayers A taxpayer having property in the state of Montana on January 1 of each tax year, must complete the statement as provided in 15-8-301, MCA.

            (2)  If the statewide aggregate market value of a person or business entity's class eight property on a statewide basis is $20,000 or less as determined by the department, the person or business entity is exempt from class eight taxation.  To ensure fair and accurate reporting of all taxable class eight property, the department may require all persons or business entities to report their class eight property periodically.  It is the department's current plan to require a biennial reporting of all class eight property for beginning in tax year 2011 and, if judged necessary, for additional future tax years at intervals to be determined.

(3) remains the same.

(4)  Except as provided in (2), taxpayers having taxable property in the state of Montana on January 1 of each year must complete the The taxpayer's completed personal property statement as provided for in 15-8-301, MCA, must be postmarked no later than March 15.  With the exception of livestock owners, the taxpayer has 30 days from the date of receipt of any request for information to respond to the department's request.  The department may grant an extension if the taxpayer requests such an extension during the 30 day period.  No extension may be granted that allows the taxpayer to report after March 15.  Statements postmarked after March 15 will not be considered for that year unless the department determines the following conditions were met:

(a)  the taxpayer was unable to apply for the current year due to hospitalization, physical illness, infirmity, or mental illness; and

(b)  these impediments must be demonstrated to have existed at significant levels from January 1 of the current year to the time of submitting the statement, but in no case no later than April 15.

(5)  A taxpayer who raises livestock subject to the per capita fees has 14 days from February 1 to respond to the department request for information.  The department may grant an extension if the taxpayer requests such an extension before February 15.

(6)  If the taxpayer fails to respond to the department's request for information during the timeframes set forth in (2), (3), and (4) the department shall assess the property a penalty under the provisions of 15-1-303, and 15-8-309, and 15-24-904, MCA, or any other applicable statute.

(7) through (9) remain the same but are renumbered (6) through (8).

(10)(9)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

AUTH: 15-1-201, MCA

IMP: 15-1-303, 15-8-104, 15-8-301, 15-8-303, 15-8-309, 15-24-902, 15-24-903, 15-24-904, 15-24-905, MCA

 

REASONABLE NECESSITY: The department proposes to amend ARM 42.21.158 to enhance its ability to keep its personal property records current.  

The amendments in (4) and (5) simplify the reporting requirements by extending the set deadline for the return of the personal property statement and eliminating the extension request process previously required by the taxpayer.  The proposed amendments also allow for unforeseen medical conditions that may inhibit a taxpayer from complying with the set deadline.

 

5.  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) 444-4375; or e-mail [email protected] and must be received no later than November 26, 2010.

 

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

 

7.  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.

 

8.  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 5 above or faxed to the office at (406) 444-4375, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

9.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

 

 

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

CLEO ANDERSON                          DAN R. BUCKS

Rule Reviewer                                   Director of Revenue

 

Certified to Secretary of State October 18, 2010