MT HB865

Increases the inflation limitation on governmental property tax levies from one-half of the average rate of inflation for the prior 3 years to the full average rate, capped at 4%

Requires 75% of newly taxable value from class four property (residential) and a portion of newly taxable value from other non-residential property classes to be subject to mill levy limitation calculations

Allows cities, counties, and consolidated city-counties to establish a "large taxpayer reserve account" funded by 10% of revenue from newly taxable non-residential property

Reserve account funds can only be accessed when a large taxpayer (top 20% by taxable value) permanently ceases operations or experiences a 25%+ decrease in taxable value, to be used for bond payments, mill levy reduction (up to 10 years), attracting new industry, or infrastructure investment

Applies to property tax years beginning after December 31, 2025