HELENA – Representatives of a number of Montana industries backed a bill Tuesday to allow property owners to go to mediation if they dispute the state Revenue Department’s assessed valuation of their property.
State Revenue Director Mike Kadas opposed the bill, saying Montana’s tax appeal process has been working “reasonably well for a long time.”
The bill sponsor, Sen. Fred Thomas, R-Stevensville, told the Senate Taxation Committee that mediation can take place now, but only if both the property owner and Revenue Department agree.
His Senate Bill 280 would authorize any property taxpayer who objects to the Revenue Department value to request mediation, which would then trigger it. The 2011 Legislature passed a similar bill, but former Gov. Brian Schweitzer vetoed it.
What happens now, he said, is businesses can appeal their valuation to the State Tax Appeal Board, then they can take it to District Court and finally to the Montana Supreme Court. While that happens, schools and local governments don’t have access to the protested property taxes for years until a decision is handed down.
The two sides would agree on an independent mediator who is not a state employee and possibly resolve these disputes much sooner, Thomas said. If the issues aren’t resolved in mediation, the taxpayer could go to District Court or STAB.
“Mediation is the wave of the future,” Thomas said. “I have used it in work.
Lining up to support the bill were representatives of the Montana Taxpayers Association, Century Link, Puget Sound Energy, Portland General Electric, Avista, Montana Petroleum Association, Montana County Treasurers Association, Montana Chamber of Comemrce, Montana Association of Realtors, Montana Association, MDU Resources and AT&T.
“We’re hoping to have a pace where everyone could sit down and resolve at least some of the issues without having to go to litigation,” said Nancy Schlepp, president of the Montana Taxpayers Association.”These cases are large and complex. Taxpayers have to fund and participate in at least two layers of appeals. It’s costly to citizens.”
Kadas was the lone opponent, predicting the system under SB280 would lengthen the process rather than shorten it.
He said STAB was created in 1973, after the 1972 Montana Constitution, and succeeded the state Board of Equalization, which began in 1923.
“The notion of a tax appeal board is very common,” Kadas said. “It is something that is used throughout the country. When we have areas that of particularly complex laws that are not the normal milk and potatoes kind of law, we have special courts to deal with them.”
As examples, he cited federal bankruptcy courts and Montana’s Water Court, Human Rights Commission and Montana Board of Labor Appeals.
By moving away from the State Tax Appeal Board, he said Montana would lose its expertise, efficiency and timeliness. Kadas said District Courts rarely have training in this kind of law.
SB280 also allows what Kadas called “forum shopping” where centrally assessed properties can find the court in which they have the most success.
He offered amendments to make it a mediation bill that the department could support.
“Fundamentally, if it isn’t broke, let’s not try to fix it,” the director said.
The committee didn’t take any immediate action on the bill.