Sen. Bruce Tutvedt, R-Kalispell, is reiterating his belief that a special legislative session is on the horizon because of lawsuits challenging the state’s property appraisal system.

Tutvedt was the sponsor of legislation that would have shortened the state’s appraisal cycle from every six years to every two years, with provisions for the state Department of Revenue to use aerial photography in appraising properties. However, Senate Bill 398 was killed in the Republican-controlled House Taxation Committee.

Before that happened, Tutvedt predicted that without Senate Bill 398 or similar legislation, a special session would be necessary if the Montana Supreme Court upholds one or more District Court decisions related to the state’s property appraisal system.

He still thinks that’s the case.

“I am not sure when either of these cases will go to the Montana Supreme Court, but expect it to be soon and I believe they will be upheld,” Tutvedt said in recent correspondence with constituents. “If upheld, the governor will come forward with a special session to call for annual or biannual appraisals as in SB 398.”

The most important case for now is Covenant Investments Inc. versus the Montana Department of Revenue, because it has been fully briefed before the Supreme Court.

In that case, Gallatin County District Judge Holly Brown ruled that Covenant Inc., a property owner and developer, was required to “bear a disproportionate share of Montana’s tax burden by taxing Covenant on an overstated property value, while taxing other Montana taxpayers based on fair or understated values.”

She went on to say that the state tax system, as applied to Covenant, “is unconstitutional by failing to provide for a mid-cycle reappraisal of Covenant’s residential property.”

Tutvedt’s take on the ruling is that because it is possible to go to a shorter reappraisal cycle, largely because of technology, the state must do so.

“The Department of Revenue testified in my committee multiple times that they could go to a shorter cycle. It would take money and resources but it was doable,” said Tutvedt, who chairs the Senate Taxation Committee. “As technology changes for what you can do, the courts are going to require you to do it.”

In Covenant, the Department of Revenue’s 2008 appraisals for some of the developer’s residential lots were $80,000. But Covenant soon after sold some of those same lots for about $40,000. 

“It was pretty irrefutable” evidence in the case, Tutvedt said.

Mike Green, the lead attorney representing Covenant, is involved with at least two other cases with similar claims, but he says Covenant is the first in line with the Supreme Court.

“The Supreme Court is fully briefed on that one. We’re hoping in the next few months the court would render a decision,” he said.

Green said he’s not sure how the Legislature or Gov. Steve Bullock will react if the Covenant ruling is upheld. Tutvedt’s bill may not be the only remedy.

“I think the state will have a lot of options on how to address this,” Green said.

Tutvedt explained why he thinks Senate Bill 398 died in committee. 

“It got late in the process and I don’t think people understood it,” he said.

Also, he said it raised the hackles of some lawmakers who considered it intrusive for state government to use aerial photography to capture any improvements on a property from year to year.

Reporter Jim Mann may be reached at 758-4407 or by email at jmann@dailyinterlake.com.