Complex property tax bill under fire in lawsuit filed by current and former state legislators
By Jen Clancey STAFF WRITER
A 2025 property tax bill passed in the Montana Legislature is the topic of a lawsuit against the Montana Department of Revenue, its director and the state. Three plaintiffs argue that the way the bill was amended during its time in the House and the Senate was unconstitutional, calling the legislation a “bait-and-switch” to disguise permanent restructuring of Montana’s property taxes under simpler legislation.
The lawsuit filed by Republican legislators Sen. Greg Hertz of Polson, Sen. Tom McGillvray of Billings and former Republican Sen. Keith Regier of Kalispell, states that Senate Bill 542 originally aimed to temporarily freeze property valuations but was transformed through amendments. The final version of the bill provided $90 million in property tax rebates to homeowners, financial support for governments limited by how much they can levy and property tax restructuring.
Documents list two alleged Montana constitutional violations: a breach of the original purpose rule, which aims to maintain a bill’s main purpose as it is amended and goes through the legislative process, and a violation of the single subject appropriations rule, which orders appropriations of dollars to be placed in a separate bill if it’s outside of ordinary expenses.
In statements, Hertz and Regier argue that the bill is negatively impacting longtime Montana residents, especially those who own second homes, while McGillvray stressed that the bill’s transformation is an example of corruption.
“I’ve heard from many of my constituents who are suffering from the tax shift these bills created,” Hertz stated in an email. “Lifelong Montanans are struggling to figure out how they’re going to afford to pay their massively increased property taxes, and many will likely have to resort to selling their homes and cabins that have been in their families for generations.”
However primary homeowners, even for highly valued property, saw relief. A breakdown of SB 542, and another bill passed in 2025 revising property tax laws, House Bill 231, from Montana State University professor of economics Greg Gilpin, explains that houses valued under $3.2 million will see reduced state property taxes. In reporting by Montana Free Press, taxes in Missoula and Gallatin counties saw property tax bills decrease by at least $1,000 on a median-priced home due to 2025 tax law changes.
Plaintiffs criticize internal messages between Republican Rep. Llew Jones of Conrad and legislative staff, which show discussions of adding one-time cash rebates in amendments to potential property tax bills like SB 542, which had a hearing in the taxation committee about a week later. The lawsuit argues that the planned changes weren’t mentioned in the committee hearing.
“Senate Bill 542 was Washington DC-style corruption,” Sen. McGillvray wrote in a statement about the lawsuit. “Representative Jones’s internal messages prove he planned the whole scheme 10 days before the hearing. He treated our Constitution as a technical obstacle, not a binding constraint.”
The lawsuit also points to Rep. Jones’ April 29 comments on the House floor in response to rebate costs as an example of logrolling, or bundling up favorable bills with unfavorable ones to pave the way for passage.
“On the rebate deal, I support it because now it’s what it takes to pass the bill, but I actually agree that the rebate in the first probably is unnecessary … but sometimes that’s the cost of doing business up here,” Jones said in April.
Jones was not available for comment at the date of publication.
Debate and discussion continued and the bill was passed through the House 72-27, and later approved as amended alongside HB 231 to end the 2025 legislative session. Both bills became law in May 2025 and enacted the most significant change in property taxation since 2009, according to Gilpin.
The lawsuit was filed in the Gallatin County District Court. Hertz said that they are looking at another lawsuit as well.
