Boots on the Hill: New Bills, Confirmations, Taxes and More Taxes
By Rachel Cone and Nicole Rolf, Montana Farm Bureau Federation
We’ve wrapped up March and 65 days in the Montana legislature this week, marking just over 12 weeks of advocating for Montana’s farmers and ranchers. While we saw a variety of good bills continue their process through the legislature and the death of several bad bills, there were multiple new bills introduced, including a variety of tax bills which were our focus this week:
Starting off on a positive note, MFBF was pleased to support SR 64 sponsored by Senator Mike Lang to confirm the Governor’s appointment of Lillian Anderson and William Kleinsasser and reconfirm Nina Baucus to the Montana Board of Livestock. This important Board has oversight of the Department of Livestock, so having qualified and dedicated livestock producers on the board representing all species is incredibly important. The Senate Agriculture Committee took action immediately after the hearing and unanimously passed the resolution. All three newly confirmed Board members attended the hearing in person and hit the ground running with their first official board meeting the following day. Additionally, MFBF supported SR 65 sponsored by Keith Regier (R) SD 3, to confirm the Chief Water Judge, Russ McElyea. The Water Court is charged with adjudication for water in Montana, and under Judge McElyea the adjudication process has been incredibly successful.
Kicking off our week in the tax arena, we opposed HB 906 Revise laws related to agricultural property taxation sponsored by Casey Kundsen (R) HD 33 which seeks to add clarification to what qualifies as agricultural land, or class 3 property. The problem with HB 906 is that to receive the ag tax classification the owner must be eligible to receive USDA FSA payments, as originally introduced. While on paper this seems to be a good way to make that determination, it is more complicated than that depending on how a lease for the land is written. If the lease puts all of the risk onto a lessee, the landowner is no longer eligible for FSA payments and with HB 906, that land is no longer eligible for an ag tax classification. Following our testimony pointing out this fact, the committee added an amendment to clarify that the owner or the lessee had to be eligible for programs.
We also opposed HB 912 Provide for recreational land classification for property tax purposes sponsored by Edward B. Butcher (R) HD 29. The bill seeks to create a new class of property for agriculture land that has been taken out of production and turned into recreational property. While MFBF is generally supportive of this concept, the details of HB 912 places a burden of proof on landowners, forcing them to report to the department they are an agricultural producer every year. It also requires the Department of Revenue to verify the land is used for agricultural production but does not provide details on if local assessors or the state will do this verification and how this verification will be done consistently across the state. Lastly, provisions in HB 912 do not take into consideration cases such as drought, fire or hailstorms that would cause lower-than-average agricultural production on these lands and could push agricultural land into this recreational land tax classification. As we shared in testimony, MFBF is committed to finding a solution and will pursue the concept put forth in this bill, but we need to make sure that we protect legitimate farmers and ranchers from the unintended consequences put forward in the legislation as written.
In an effort to address a supposed “land rich and cash rich” class of landowners, HB 960 Revise property tax laws to provide for recreational land classification sponsored by Tom France (D) HD 94 looks to create a “recreational property” tax class for landowners with 640 acres or more and that make more than $200,000 annually. For landowners who meet this criteria, HB 960 would classify the land as recreational property, with a tax rate that is 7 times more than the agricultural property tax rate. Much like the previously mentioned bills, HB 960 would place the burden onto the farmer or rancher to prove to the Department of Revenue are an agricultural operation every year. We also raised the concern that in productive years, many farms and ranches could surpass the $200,000 gross income level, especially when off-farm income is considered and force bonified farmers and ranchers into this recreational property tax class.
Lastly on taxes for this week, we opposed SB 551 Provide for local option tax sponsored by Christopher Pope (D) SD 31 tries to address the burden placed on property taxpayers from record levels of tourism and population growth. SB 551 would give local taxpayers in these metropolitan areas the option to apply their own local taxes to non-essential goods and services. SB 551 seeks to addresses the issue of “unfair” property tax burden, but for only the five largest cities in Montana. Local option sales taxes, no matter how they are implemented, always result in a transfer of rural dollars to urban municipalities and MFBF has opposed many versions of this legislation in past Sessions. Under this bill, when Montana’s farmers and rancher visit these metropolitan areas to stay, shop, attend sporting events and more, they would pay the same tax as tourists. Montana's farmers, ranchers and rural communities would lose out on any benefits of SB 551 as this local sales tax would only benefit the metropolitan areas where the tax is assessed.
To wrap up this week’s Boots on the Hill, we are excited to announce the harmful water well bill, HB 642 Revise exempt wells laws sponsored by Casey Knudsen (R) HD 33, was tabled in the House Natural Resources Committee after failing a “Do Pass” motion on a vote of 5 to 10! We want to thank everyone who reached out to their Representative, contacted committee members, or testified in the hearing about the harmful effects HB 642. This legislation would have adversely impacted our senior water rights. The Comprehensive Water Review process is the best place to create solutions for water issues and MFBF is committed to participating in the process while defending our members’ property rights.
For more legislative updates and details on these issues, follow our Live with Your Lobbyist broadcast each Friday at noon on our Montana Farm Bureau Facebook Page.
Nicole Rolf is the Senior Director of Governmental Affairs and a rancher from Miles City, Montana. Nicole works closely with our Congressional delegation on national issues affecting Montana agriculture. Additionally, this is her eighth Montana Legislative Session, lobbying in Helena on behalf of MFBF members. She also works as the Southeastern Montana Regional Manager. Nicole can be contacted at firstname.lastname@example.org.
Rachel Cone is the Director of State Governmental Affairs for Montana Farm Bureau Federation. This is Rachel’s second session lobbying on behalf of Montana Farm Bureau. Rachel is involved throughout the interim session to track how bills will come to the session. Rachel focuses on water issues throughout the legislative session and lobbies on all topics impacting Montana Farm Bureau members. Rachel can be contacted at email@example.com.
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