There are 17 more days remaining in this 64th Montana Legislature. The final day will be May 1.
Gov. Steve Bullock this past week signed two bills of priority to NFIB/Montana. These were House Bill 396 and Senate Bill 39. Both are good news for small businesses.
Rules and Regulations
HB 396 removes the sunset provision from the “Small Business Impact Act.” In the 2013 legislative session, NFIB/Montana was a prime advocate for a bill to create this act that requires state agencies to consider whether proposed administrative rules or regulations would have an economic impact on small businesses.
Small businesses were defined as having fewer than 50 employees. If an agency determines that an economic impact is likely from proposed rules or regulations, the act requires that agency to conduct a small business impact analysis to identify and measure the effect on the small-business community. Montana now joins 42 other states, and the federal government, with similar acts required for rule making. But to get this bill in 2013 passed and signed by the governor, it was amended to put a two-year sunset on it. HB 396 removes that sunset and keeps the “Small Business Impact Act” permanently on the books.
Patent Trolls
Senate Bill 39 prohibits bad-faith assertions of patent and copyright infringements. It sets standards for demand letters for patent and copyright infringement assertions, and provides enforcement and damages against those claiming such bad-faith assertions. In other words, it puts a lid on what the attorney general calls “trolling for patent and copyright” scams.
It has been reported that a number of small businesses in Montana have been caught up in this scam. The scammers send a letter to a small business claiming an infringement on their patent or copyright and demanding a fee for continued usage in publications, internet webpages, and advertising. That fee is small enough that small business owners pay the fee rather than hire a high-priced patent attorney.
Tax Reform
An important hearing was held on Friday for small-business owners that are either corporations or pass-through taxpayers. Senate Bill 171 is the last remaining income tax bill still alive in the session that reforms the Montana income tax laws. Sponsored by Sen. Bruce Tutvedt (R) of Kalispell, SB 171 would simplify the taxation of individuals or corporations by making Montana returns start with federal taxable income, and reducing the substantially the additions to and subtractions from federal taxable income.
By starting with federal taxable income, much of the effect of the repeal of subtractions and credits would be offset by the higher personal exemption and the higher personal deductions allowed on a federal return. This would be true particularly in lower income brackets. SB 171 sets up only two tax rates, 4.8 percent and six percent, instead of the current seven tax rates. The corporate rates would be lower from 6.8 percent to 6.5 percent. To offset the loss of revenue to the state by lower rates, the bill eliminates a variety of tax credits, making the fiscal note on SB 171 a positive to the general fund within two years. The bill also reduces the tax form almost in half. SB 171 passed the Senate, and is awaiting House Tax Committee action this coming week.
Seasonal Employees
Another bill of interest to NFIB/Montana is Senate Bill 414 by Sen. Ed Buttrey (R) of Great Falls. This bill creates an option that would exempt seasonal employers from paying unemployment insurance on designated seasonal employees outside of their season of operation. A season of operation is confined to six months. The bill has been amended to exempt agricultural labor, employees that perform services during a seasonal employer’s off season, and an employer that pays prevailing wages and benefits under federal or state law.
What has been happening is an employee works for the season of say six months, then when the business closes it season, the employee draws unemployment insurance for the time the employee worked for the seasonal employer. The employer then is charged for those additional weeks of unemployment on the employer’s unemployment account. This raises the rate of that employer’s unemployment insurance.
Coming Up
On Monday, Senate Bill 99 will be heard in House Appropriations Committee. This is the “Insure Montana” program of subsidized health care for small businesses between one and 25 employees. Insure Montana originally began in 2006 and currently has 1,100 small businesses insured with over 6,600 lives covered in Montana. The Affordable Care Act (ACA) eliminates this program in July, 2015. SB 99 rewrites the program to comply with the ACA act. The hearing is before the House Appropriations Committee on Monday. The road might be a bit rocky for SB 99, however, as the fiscal note is sizeable, and the sponsor tells NFIB/Montana that the governor’s office is leery of the high cost.
Also on Monday Senate Bill 416 will be heard. This is the only surviving “Build Montana” program to repair and build infrastructure all over Montana, particularly in the oil and gas booming areas of eastern Montana. The governor’s infrastructure bill was killed by the Legislature.
On Wednesday, House Bill 341 and House Bill 637 will be heard in the Senate Tax Committee. HB 341 provides a tax credit of 25 percent to employers and students for up to three years for higher education expenses, such as student loans that the individuals pay to reduce education debt. HB 637 gives a tax credit of $1,000 per employee, or $2,000 if the employee is a veteran, to any employer that hires certified apprentices in their workplace. This tax credit is eligible for up to five years during the apprenticeship program.
Getting Involved
Getting involved in the 2015 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 up to five legislators on each call, and delivery is within a half an hour. Those wanting more information on locating legislators, getting an e-mail address, looking to view committee meetings and floor sessions on television or over computers, and just to review all hearings and reading of the actual bills can go to www.leg.mt.gov and access everything electronically.
Past Reports
