April 6, 2007
The Honorable Scott Sales
Speaker of the House
State Capitol
Helena, MT 59620
The Honorable Mike Cooney
President of the Senate
State Capitol
Helena, MT 59620
Dear Speaker Sales and President Cooney:
In accordance with the power vested in me as Governor by the Constitution and the laws of the State of Montana, I hereby veto House Bill (HB) 469, “AN ACT CLARIFYING THAT PROPERTY OWNED BY COMMERCIAL MOBILE RADIO SERVICE PROVIDERS IS TAXED AS CLASS FOUR COMMERCIAL PROPERTY AND CLASS EIGHT PERSONAL PROPERTY; CLARIFYING THAT PROPERTY OWNED BY COMMERCIAL MOBILE RADIO SERVICE PROVIDERS MAY NOT BE CENTRALLY ASSESSED FOR PROPERTY TAX PURPOSES; AMENDING SECTIONS 15-1-402, 15-6-138, 15-6-156, AND 15-23-101, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE.”
HB 469 purports to “clarify” existing Montana law regarding, first, the property tax classification of wireless phone company property and, second, the method of assessment of this wireless property. HB 469 does not, as its title suggests, “clarify” existing Montana law. Rather, under the guise of “clarifying” existing law, HB 469 would actually reverse existing law and codify the improper practices of past Administrations, which failed to correctly implement Montana’s tax codes as enacted by the Legislature.
Specifically, HB 469 claims to “clarify” existing Montana law by exempting wireless phone company property from the current statute defining property that is centrally assessed. See section 4 of the bill, amending Mont. Code Ann. § 15-23-101. Contrary to its title, HB 469 does not “clarify” the valuation method to be used for assessing wireless phone company property. Rather, HB 469 carves out an exception to the current law, specifically and expressly for wireless phone company property (as defined in the bill, “property owned by commercial mobile radio service providers”).
Likewise, with regard to the property tax classification of wireless property, rather than “clarifying” current law, HB 469 would amend the current legislative classification of “centrally assessed telecommunications service companies” as class thirteen property to carve out an exception specifically and expressly for wireless phone company property. See section 3 of the bill, amending Mont. Code Ann. § 15-6-156.
The title to HB 469 represents the bill as “clarifying” current law regarding taxation of property owned by commercial mobile radio service providers. However, current law already speaks clearly for itself. Indeed, the Department of Revenue’s legal conclusion was confirmed by your own Legislative Auditor, who advised both the Legislature and the department that Montana statutes require the central assessment of wireless phone company property.
Rather than “clarifying” current law, HB 469 ratifies the unlawful practice of prior Administrations, which failed to properly implement the tax laws enacted by the Legislature. As concluded by the Legislative Auditor, it was a mistake for past Administrations to grant millions of dollars of tax breaks to wireless telephone companies, contrary to Montana statutes and at the expense of homeowners, farmers, ranchers, and other businesses. HB 469 ratifies the past unlawful practice and rewards past mistakes. However, let me be clear. HB 469 does not “clarify” current law. HB 469 changes it.
As a final addendum, I unfortunately must also let you know that this past practice has created financial risks for local governments and schools. It is likely no coincidence that on the day after HB 469 was transmitted to my office, Montana’s largest telecommunications company filed a constitutional complaint to the tax methods endorsed by this bill. That challenge is based on a claim of discrimination due to the more favorable treatment of wireless phone company property as compared to traditional landline telephone property under the practice adopted by past Administrations. HB 469 thus attempts to engrave into Montana statutes what has been alleged as a constitutional discrimination claim in a formal legal proceeding.
Montana needs to value and tax comparable property equally. HB 469 is bad policy, bad precedent, and both legally and financially risky to Montana taxpayers. The bill title, itself, is at best misleading. For these multiple reasons, I veto HB 469.
Sincerely,
BRIAN SCHWEITZER
GOVERNOR
cc: Legislative Services Division