In a session that saw the fewest number of bills since 2001, House Bill 620, at 440 pages, was judged the longest in state history
NFIB/Montana State Director Riley Johnson reports from Helena on the small-business agenda at the end of session, April 28.
Montana’s lawmakers adjourned the 2017 legislative session April 28, just as they did in 2015 and 2013.
They failed to approve a bonding infrastructure bill. This time the margin was three votes (64-36) after negotiations collapsed, even threats and offers to bring it back and pass local-interest legislation failed to sway enough legislators in the House. All bonding bills require a two-thirds (67) votes to pass.
It was a contentious day. House members brought back Senate Bill 367 twice for votes and the results were the same. So, the House adjourned “sine die,” and minutes later, the Senate did the same. The 65th session of the Montana Legislature was over.
All told, there were 1,088 bills introduced, the lowest number since 2001 when 1,077 were introduced. NFIB/Montana followed 64 individual bills during the four-month session, supporting some, opposing some, and monitoring some. In all, it was a good session for small business. The following are a few of the highlights for NFIB/Montana.
Minimum Wage
House Bill 169 by Rep. Mary Ann Dunwell (D) of Helena would have raised the minimum wage from its current rate of $8.25 per hour to $10.10 per hour and continued the current annual increase tied to inflation. Intense lobbying of the House Business Committee early in the session tabled this bill. An effort to blast the bill out of committee onto the House floor failed 40-59.
Local Option Sales Tax
Two serious bills aimed to create a local-option sales tax for local government infrastructure failed to make it out of the House Tax Committee and the Senate Tax Committee. House Bill 579 and Senate Bill 331 both received heavy pressure from NFIB/Montana and other business organizations to kill these measures. Both committees tabled the bills in late March. Efforts to revise the bills failed.
Property Tax
A similar effort by Rep. Greg Hertz (R) of Polson would have allowed local governments to levy up to 40 mills in local property taxes to fund local infrastructure projects. This was House Bill 579 that was tabled by the House Tax Committee in the final days of March.
Income Tax
House Bill 330 and House Bill 452 would have revised the individual income tax to create a new bracket for persons earning over $500,000 per year of. The tax rate today is 6.9 percent. HB 330 and HB 452 would have raised it to 7.9 percent. Again, both bills received major lobbying efforts and were tabled in committee in mid-February along party lines, with the Republican majority rejecting the measures.
Sales Tax
There were two sales tax bills that emerged in the session, House Bill 620 and House Bill 640. The first to die, in the last week in March in the House Tax Committee, was HB 640 by Rep. Greg Hertz (R) of Polson. The second bill, HB 620, was a shocker. Sponsored by Rep. Kerry White (R) of Bozeman, it emerged in the last week of the session. It had 440 pages, determined by the Legislative Council to be the largest bill in terms of volume to ever be introduced in the Montana Legislature. It was passed by the House Tax Committee 11-9 the second week of April, but then thoroughly defeated on the House floor 18-82.
Worker Training
One of the victories for NFIB/Montana that made it through the entire Legislature was House Bill 88 by Rep. Moffie Funk (D) of Helena. This bill expanded the current incumbent worker training program that is currently being run by the Department of Labor and Industry.
This program takes funds contributed by employers through unemployment insurance revenues and puts it out in grants of up to $2,000 to retrain current employees in strategic workforce jobs. The present law allows firms of 25 or fewer employees to be eligible to apply for these grants. HB 88 expanded the program to allow small businesses with up to 50 employees to apply.
The Department of Labor says that more than $660,000 is made available each biennium to small employers in Montana and that the money is usually totally obligated within six months of being offered. NFIB/Montana was instrumental in getting HB 88 passed in both houses and signed by Gov. Steve Bullock.
Business Equipment Tax
A disappointment came in the tabling of Senate Bill 327 by Sen. Roger Webb (R) of Billings that would have increased the exemption on the business equipment tax from $100,000 to $350,000. NFIB/Montana knew going in that this would be a tough sell because total state revenues were down considerably from past two-year cycles. As an example, the revenues from natural resource taxes (coal, oil and gas) were down 61 percent in 2016 from the biennium before. But, NFIB/Montana worked hard to get this bill moving because it is one of the bigger challenges for the organization looking toward the 2019 session.
State-Run Retirement Plans
And, finally, a bill that NFIB/Montana was almost the only opponent within the business community was Senate Bill 346. This measure would have set up a state-run retirement program for small businesses within the Department of Commerce. Small employers could opt to sign up their employees and deduct the contributions of the employees from their paychecks. This is similar to the current program called 529 that allows persons to save money tax-free for college educations. This program is run by the state of Montana.
SB 346 was not on NFIB/Montana’s radar immediately. It passed the Senate Finance Committee in late March, 16-2, and it passed second reading in the full Senate 28-22 the first of April. Then NFIB/Montana became aware of the pitfalls in SB 346. Under new federal rules, an employer can be held financially responsible when investing an employee’s money. In other words, the employer could be held liable if an employee determines that the employer was not diligent in handling the investments of an employee.
Once NFIB/Montana became aware of this loophole that could endanger small employers, it went to work in the Senate and defeated the bill 24-26 on third reading the very next day.
Interim Session
So, these were some of the highlights of the 65th session of the Montana Legislature. It was an unusually slow session in bill action and in the number of bills. When you don’t know how much money you are going to receive, you don’t know what to spend until the final days. Then, you make a guess and cross your fingers.
Barring any special sessions being called, NFIB/Montana will keep busy through the next 18 months monitoring interim session legislative committees, following tax proposals, and working for its members rattling door knobs in the Capitol building to solve local problems. Until January 2019: SINE DIE.
Previous Legislative Reports
April 21 Report—Montana Legislature Has its ‘Jimmy Dean’ Week
April 14 Report—Infrastructure Deals Sill Not Closed. Adjournment Looms
April 7 Report—Tempers Shortening as Montana Legislature Nears Adjournment
March 31 Report—Attempt to Abolish Montana State Fund Defeated
March 24 Report—“I Get The Picture. Shut The Emails Down.”
March 17 Report—Local Property Tax Levy Coming up for Hearing
March 10 Report—NFIB to Fight 4 Percent Local Options Tax Proposal
March 3 Report—Montana Legislators Getting Down to Dollars and Cents
February 24 Report—Income Tax Proposals Stall; Gas Tax Increase Revving
February 17 Report—Slowest Session in 16 Years Has Not Slowed NFIB
February 10 Report—NFIB Helps Defeat Costly Workers’ Compensation Proposal
February 3 Report—Skirmish Over Funding Montana Legislature
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
