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Shifting demographics: state & local tax study is up for debate

Shifting demographics: state & local tax study is up for debate

The days are longer, birds are chirping and the smell of spring is in the air.  Many legislators (and lobbyists) are working hard to bring the 66th Montana Legislature to a close.  There is a light at the end of the tunnel—conversation throughout the Capitol insists the Legislature is aiming to conclude by Good Friday, April 19th.  

Ending the legislature early is a lofty and admirable goal; it saves the state and taxpayers money and allows everyone to return to their ‘normal’ routines earlier than expected.  It’s not uncommon to hear this goal paraded around during each Legislative Session but with the first Sine Die motion made on the House Floor earlier this week, it might actually be attainable this time around.

The bills Montana Farm Bureau is still working through the process are dwindling in number and we’re certainly fans of getting to go home early; however, in the meantime we’ll be operating under a ‘we’ll believe it when we see it’ mentality.  There was a lot of progress made this week and several more bills are closer to reaching Governor Bullock’s desk.  

We’ve talked a lot about HB 286 this session.  You’ll recall this bill aims to address concerns with the Department of Natural Resources issuing certain State Trust Land lessees a letter stating the Department is now a co-owner of their water right; if that water right was used on state trust land.  Unless the water right was put to beneficial use and perfected on state land i.e. a lessee put a well in on a School Trust Land lease, we disagree that DNRC has any right to ownership.  

HB 286 was amended and passed out of the Senate Natural Resources Committee on the afternoon of April 3.  The amendment clarifies that the state may only obtain an ownership interest in a water right or ground water development works if a court determines the state is an owner of that right or if the state is in possession of a deed transferring ownership of the water right to the state. This is the same requirement that other water users have to meet.

This was a very timely move as yet another transmittal deadline for amendments to general bills is set for April 8.  This bill is important to agriculture and senior water right holders across the state and we want to praise the work of the Senate Natural Resources Committee and specifically their chair, Sen. Jeff Welborn.  Sen. Welborn worked closely with stakeholders and the bill sponsor, Rep. Alan Redfield to secure necessary amendments and move the legislation forward.  

HJ 35, Interim study of state and local tax policy

Sponsored by Rep. Alan Redfield, HD 59, Livingston

With both the general and revenue bill transmittal deadlines behind us this session, legislators are beginning to discuss what issues interim committees should focus their efforts on.  Interim committees are bipartisan groups of legislators that meet during the months between sessions to study specific issues and consider whether to recommend new legislation.  HJ 35 requests a comprehensive study of the state and local tax system during the interim by the Revenue and Transportation Interim Committee (RTIC).  The joint resolution allows RTIC to appoint a subcommittee composed of non-legislative stakeholders and experts to undertake the study.

Montana’s economic landscape is changing rapidly, and issues this session have revealed that the state’s current tax structure may not accurately reflect the many changes to Montana’s economy, such as population growth, changing demographics, and increased commerce done online. 

We continue to see our rural economies shrink, while the tax burden on rural property holders to fund education and local infrastructure has only increased.  MFBF is hopeful HJ 35 will point out inequities in Montana’s current tax system and suggest solutions that provide property tax relief and also capture tax dollars associated with the state’s changing economy.     

HB 550, Providing that privately owned roads or roads that have been abandoned or vacated may not be considered public roads in the consideration of gas tax allocations

Sponsored by Rep. Alan Redfield (R), HD 59, Livingston

County governments receive gas tax allocations from the Department of Transportation (DOT) each year for maintenance, repair or construction of new roads in their county.  The more roads a county submits, the more gas tax allocation they may receive.  The county submits maps of these roads to DOT and the Department approves or denies roads and may even do a physical inspection to verify the maps.

HB 550 seeks to clarify the definition of a public road and what a county government may claim for a gas tax allocation.  If passed this bill would give landowners more control to coordinate the removal of a road from the county gas tax map.  Issues arise when members of the public use a county gas tax road map and assume that if a road is on that map, it is open and dedicated to public use.  

During the hearing on April 2, a representative from DOT clarified that gas tax maps are not intended to denote public access and should not be used to clarify whether or not public access exists.  HB 550 would define a public road as a road dedicated to public use as determined by an authorized governmental entity and accepted by a governing body. 

It also stipulates that a public road is not a privately owned road or trail unless it satisfies specific criteria outlined in statute. Additionally, a road that has been abandoned or vacated by the state or any political subdivision of the state may not be considered public. Montana Farm Bureau supported this bill. We believe that if a road is not dedicated to public access and isn’t maintained or repaired by the county, the road should be removed from the gas tax map at the request of the landowner. 

 



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