Governor’s Tax Proposals Pass, Await His Signature

Legislature reaches mid-point of its 2023 session

State Director Ronda Wiggers reports from Helena on the small-business agenda for the legislative and political week ending March 3

We have officially reached Day 45. All bills that do not create or spend revenue must have passed from their house of origination at this point or they are basically dead. There have been 1,412 bills introduced in the first half of the session. There will still be a few revenue bills that will trickle in, but the rate will slow substantially.

Gov. Greg Gianforte’s package of tax bills has worked its way through both the House and the Senate and are all headed for signature. I thank our resident tax expert, Bob Story, executive director at the Montana Taxpayers Association, for the following:

Bills funded out of the existing surplus that do not affect tax policy are:

HB 222, which at this time, provides a payment to owners of residences who occupy their property for at least seven months. The rebate would be for property taxes paid up to $500 this year and next year. The total cost of this bill will be $283 million dollars over two years.
HB 192 provides rebates to Montana income taxpayers of taxes paid up to $1,250 per individual or $2,500 per couple. The one-time cost of this bill is estimated to be $480 million dollars.

HB 251 places $143 million of the surplus into a special account to pay off state debt. The bill also diverts the interest from the State’s cash account into a special fund for the next two years. That could be a sizable amount of money, possibly $250 million dollars. The bill would pay off all bonds that are outstanding and callable. Those bonds, which must run their course, would be paid over time with money set aside in the account. The account could also be used to eliminate long-standing debt obligations like the old fund workers’ compensation liability. Paying off existing debt will free up about $25 million in upcoming budgets. Any money remaining in the account at the end of 2027 would be transferred, one half to the capital improvement fund and one half to the general fund.
HB 267 places $100 million into an account with the Department of Transportation to be used to match unexpected Federal highway money. The Department can draw up to $15 million per year to match Federal money reallocated from other states that cannot use their full allocations.

Bills that change tax policy and therefore have ongoing impacts are:

SB 121 which lowers the top individual income tax rate from 6.5% to 5.9% and when fully implemented will reduce income tax collections by about $160 million dollars per year. The bill also increases the earned income tax credit for low-income filers from 3% of the Federal credit to 10% of the Federal credit.
HB 212 increases the amount of business equipment exempt from property taxes from $300,000 dollars to $1 million dollars. This bill will reduce the income to the State by about $1.25 million per year. It also reimburses local governments and schools for lost property tax revenue which costs about $7.5 million per year.

On to Your Focused Bills

Bills that have been TABLED or otherwise defeated:

HB 201 Revise minimum wage laws
HB 277 Revise workers’ compensation laws relating to the State Auditor
HB 386 Establish requirement for paid sick days
HB 389 Create a mini-COBRA law for small employer health insurance plans
HB 453 Clarify the authority of the human rights bureau and appeals process
HB 506 Revise workers’ compensation laws through freedom of competition
HB 638 Phase out use of Styrofoam in food-related businesses
HB 651 Establish the Montana family and medical leave insurance act
HB 719 Revise workers’ compensation laws relating to designation of treating physician
HB 768 Providing the warehouse worker protection act
SB 146 Revise laws relating to wage transparency

The only bill that NFIB supported that has died in the process is SB 126 which would have returned the money that was taken from the State Fund in 2017 in order to balance the state budget.

Bills NFIB is Tracking Still Active

HB 55 An act establishing a tax on electric vehicle charging stations
It has passed the House Transportation and House Appropriations committees. Because it creates a tax, it is considered a Revenue bill and did not have to transmit by Day 45 – NFIB is monitoring this bill.
HB 142 Revise laws related to unemployment insurance theft and penalties
This is on its way to the Governor’s desk.
HB 245 Revise tax credit for trades education and training
The measure has passed the House. This is extending and growing a fairly popular program for Montana businesses.

HB 468 Revise Unemployment insurance laws relating to job-attached employees
It has passed the House. This bill shortens the amount of time that job-attached UI recipients are exempt from searching for work. It is currently 10 months, and this bill shortens the time to 10 weeks.
HB 490 Generally revise laws relating to independent contractor tax evasion and fraud
This bill originally attempted to codify California’s ABC rule. After much opposition, the sponsor took all of those sections from the bill but kept the penalty portion of the bill.
HB 631 Bill for gun owners access to justice act
The original version of this bill seemed to take away a private business’s ability to ban guns from their premises. It has been amended, but we continue to monitor. It has passed the House.
HB 636 Revise workers’ compensation laws relating to exemption from the act
This measure proposes to change the percentage of ownership required in order to be exempt from workers’ compensation from 20% to 10% – NFIB is monitoring. It has passed the House.
HB 652 Revise unemployment insurance law relating to benefit duration
This shortens the time UI benefits are paid in Montana from 28 to 20 weeks. Montana currently allows UI benefits longer than all but one state.
HB 658 Generally revise card transaction fees
This proposes to allow a merchant to charge a transaction fee not more than 3% for using credit cards, if it is not prohibited by your credit card agreement. This has passed the House.
SB 22 Generally revise independent contractor laws
This bill is attempting to protect a small business that properly hires an independent contractor on an on-going basis (think snow removal) and the license of IC lapses without the knowledge of the business owner. NFIB has participated in the amendments and passage of the bill. It has passed the Senate.
SB 24 Require corporations to file electronic income tax returns
NFIB worked to get exemptions for small businesses and allowances for this bill to be adopted over time for those that are unaware of the new requirement. It has passed the Senate in an amended form.
SB 95 Generally revise theft laws
This measure would repeal the changes that passed in 2017 which decriminalized petty theft. This increased shoplifting and bad check writing, as there is no real punishment. NFIB strongly supports this bill, and it has passed the Senate.
SB 169 Generally revise punitive damage laws
This tort reform proposal has passed the Senate.
SB 216 Revise laws related to litigation and products
This tort reform would ensure that a merchant who sells a product without making any changes to the product cannot be held liable for product lawsuits. NFIB strongly supported the passage of this bill. It has passed the Senate.
SB 269 Establish consumer protections and disclosures in litigation financing
This tort reform proposal has passed the Senate.
SB 270 Prohibit employee termination for legal social media posts
The sponsor accepted amendments from the business community that made this bill better for small business owners. It has passed the Senate as amended.
SB 361 Prohibit discrimination by any person or entity because of firearms
We are watching this bill so that it does not interfere with a business owner’s ability to control their own property. It has passed the Senate.

This link will take you to the list of bills we are watching. It is an active link that will automatically update as information changes. Once a bill is drafted, you can click on the link to read the text. As the bill moves thru the process, you can track it’s progress and even watch the recordings of the hearings thru this page.

Previous Weekly Reports and Related Information