Skirmish Over Funding Montana Legislative Session

Date: February 05, 2017

Work on bills proceeds nevertheless; New tax bracket proposed; Taking liability out of agritourism

NFIB/Montana State Director Riley Johnson’s report from Helena for the legislative week ending February 3.

In a surprising turn of events, the Montana Legislature rejected an amendatory veto by Gov. Steve Bullock on February 3 on the bill that would pay for the 65th legislative session.

An amendatory veto allows the Legislature to vote for or against the governor’s changes and send the bill back to his office for reconsideration.

The House voted, 61-39, to “not adopt” the governor’s recommendations on House Bill 1, commonly known in the halls of the Capitol as the “feed bill.” The Senate rejected amendments to HB 1 by 32-16.

The governor wanted to cut $1.3 million from the feed bill. Lawmakers earlier in the week had increased the cost of running the Legislature this year by 15 percent. The governor noted that this increase comes on the heels of major cuts in regular state government agencies and program budgets because of a major drop in tax revenue during the past two years, due to the downturn in production of oil, gas, and coal.

Republicans took offense at the idea that they were exempting themselves from the planned budget cuts, saying the Legislature has already pledged to return $1.2 million of unspent money to lessen the budget shortfall. Besides, the Republicans said, many of the increases in the feed bill are due to laws passed during the last (2015) biennium.

The governor can now sign the bill into law, veto it, or let it become law without his signature. The cash-flow problems have already begun, with the Legislature having to find money from other sources for lawmakers’ per diem payments this week.

This issue will probably be resolved this week.

Worker Training

One bill that NFIB/Montana has been watching and lobbying for is House Bill 88 by Rep. Moffie Funk (D) of Helena. This measure would expand from 20 employees to 50 employees businesses eligible to apply for the Incumbent Worker Training Program in Montana.

This program awards grants up to $2,000 per incumbent worker (employed more than six months) for training in specialties like accounting and excel spread sheets to further their job opportunities. The money is appropriated from revenue charged to employers under unemployment insurance taxes, and is matched by a 20 percent participation by the employer. Some $650,000 is allocated each biennium. It is widely used by small businesses, as the Department of Labor reports that the money is gone within six months.

HB 88 passed the House two weeks ago 60-38. This week it passed the Senate 48-0. It is now on its way to the governor’s office for action.

Student Loan Debt

A second bill of high interest to NFIB/Montana is House Bill 249 by Rep. Kimberly Dudik (D) from Missoula. This bill would give business owners a tax deduction for money they paid to employees for student loan debt.

HB 88 has had a rocky road in House Tax Committee. There was an earlier hearing cancelled without any explanation. Then it was heard on February 1. It received good support, including from NFIB/Montana, which offered an amendment to drop the maximum tax deduction from the bill’s $3,600 annually to something more available to smaller businesses. The bill was brought up for executive action in the committee February 3, but was pulled with the comment that “…it was being worked on.”

New Tax Bracket Proposed

Another bill of interest to NFIB/Montana had a hearing February 1. This was House Bill 330 by Rep. Kim Abbott (D) of Helena that would add a new tax bracket to individual income taxes. Any income over $400,000 would be taxed at 8.9 percent, raising the current maximum tax of 6.9 percent by two percent.

No executive action was taken on HB 330 as the House Tax Committee was awaiting a fiscal note. It will probably be dealt with at the end of next week. NFIB/Montana opposed this bill.

Technical Training

A lively hearing was held in House Education Committee on House Bill 270 by Rep. Fred Anderson (R) of Great Falls. The measure would expand K-12 Technical Education money for technical training of high school students (grades 9-12) to middle school students (grades 6-8).

This is money allocated by the Office of Public Instruction every year from state funds. The technical training covers accounting, welding, wood and metal shops, and manufacturing to sales. This bill was supported by some 10 students and an instructor from middle schools in Great Falls, which already has an active technical training program. NFIB/Montana supported HB 270.

And, finally, there were two bills heard on Friday that piqued the interest of NFIB/Montana.

Damage Awards

House Bill 165 by Rep. Greg Hertz (R) of Polson would add a new limitation on punitive damage awards in business lawsuits. Currently, punitive damages are capped at $10 million, or 3 percent of a defendant’s net worth. HB 165 would add a third alternative to the law of three times any compensatory damages (actual financial lost by the plaintiff). A judge or jury would determine which punitive damage, if any, would be assessed to the defendant. This bill passed the house 58-42 last week. A hearing was held in Senate Judiciary Committee on Friday, February 3. NFIB/Montana supported and will lobby the position proposed in HB 165.

Agritourism

The second bill heard on February 3 was House Bill 342 in House Judiciary Committee. This measure adds “agritourism” to the list of Montana recreational activities in which the participants assume the liability for the inherent risks of those activities.

Currently, most recreational activities like skiing, football, hunting, and backcountry trips are exempt from liability, barring negligent acts on the part of the provider of such activities. Agritourism would be added to the law, and would include any form of commercial enterprise that links agricultural production or agricultural processing with tourism in order to attract visitors to a farm, ranch or other agricultural business for the purpose of entertaining or educating the visitors. NFIB/Montana supports HB 342.

Get Involved

Getting involved in the 2017 Legislature is easy. The best way to have your voice heard quickly is to phone 406-444-4800. Operators are on hand in the Capitol Building to take messages for up to five legislators on each call, and delivery is within a half an hour.

More information on:

  • locating legislators
  • getting an e-mail address
  • viewing committee meetings and floor sessions on television or over the internet
  • review all hearings
  • reading of the actual bills …

… can go to www.leg.mt.gov and access everything electronically.

Previous Legislative Reports

January 27 Report—Montana Legislature Ponders Tax Credits for Startups

January 20 Report—NFIB Helps Defeat Montana Minimum-Wage Bill

January 13 Report—NFIB Readies Opposition to Montana Minimum-Wage Bill

January 6 Report—Montana Legislature Opens Biennial Session

[Tile photo of Rep. Moffie Funk courtesy of The Montana Legislature]

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