Author: Press Room

Reduction in Workers Compensation Costs

19 February 2021
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The cost of workers’ comp in Montana will drop 14.6 percent as of July 1.

Commissioner of Securities and Insurance, Montana State Auditor Troy Downing, has approved a decrease in workers compensation loss costs. 

The overall average decrease, which goes into effect on July 1, 2021, is 14.6 percent compared to last year’s drop of 8.1 percent. This decrease is the largest since 2019 at 17.2 percent. The Montana State Fund and private insurers use the approved lost costs to assist in establishing the prices businesses in Montana pay for workers compensation insurance. 

“This is great news for Montana businesses already struggling due to the Covid 19 lockdowns and economic uncertainty. Lower insurance costs mean Montana businesses are more competitive nationally, can raise wages, and can pass savings onto customers.” Downing goes on to say, “My Administration is focused on reducing insurance prices across the board to help businesses, employees, and consumers prosper.”

The National Council on Compensation Insurance filed the 14.6% decrease, and Commissioner Downing has approved it.

Montana AG Pushes Back

19 February 2021
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Attorney General Knudsen Leads Coalition Calling on Biden to Reinstate Keystone XL Permit

Montana’s Attorney General Austin Knudsen led a coalition of 14 attorneys general last week calling on President Joe Biden to reconsider his unilateral revocation of the 2019 Presidential Permit for the Keystone XL pipeline and advised him that states are reviewing available legal options to protect their citizens and interests.

Knudsen and the attorneys general coalition reiterate the harms Biden’s decision will inflict on Americans: thousands of displaced workers, increased reliance on energy produced in Russia and the Middle East, and lost economic activity and opportunity.

Knudsen led the attorneys general in writing to Biden. “In Montana for instance, killing Keystone XL will likely cost the state approximately $58 million in annual tax revenue. Montana will lose the benefits of future easements and leases, and several local counties will lose their single-biggest property taxpayer. The loss of Keystone XL’s economic activity and tax revenues are especially devastating as five of the six impacted counties are designated high-poverty areas.”

The letter was also signed by attorneys general from Alabama, Arkansas, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, North Dakota, South Carolina, South Dakota, Texas, and West Virginia.

Contractors Name Officers

19 February 2021
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The Montana Contractors Association  announced that Marty Schuma has been elected as president for 2021.

Schuma is president of Dick Anderson Construction. He joined the firm in 1992 as a project manager and was named president in 2009. Schuma is DAC’s most senior LEED Accredited Professional, which testifies to the firm’s commitment to environmentally responsible design and construction. In addition to the duties of president, Marty is the project manager for some of the most beautiful and technologically challenging buildings the company has constructed. DAC has offices in Helena, Billings, Bozeman, Great Falls and Missoula in Montana, Redmond, Oregon and Sheridan, Wyoming.

Schuma has been a board member for the MCA since 2015, and he represents the municipal/utility division. He replaces Bob Warren of Schellinger Construction (Columbia Falls), as president.

The membership also elected Andy Mathison of Casino Creek Concrete (Lewistown) as Vice President, and Bill Langlas of Langlas & Associates (Bozeman/Billings) as Treasurer. Guy Slaybaugh of Century Companies (Lewistown) was elected to serve on the board.

The MCA is a chapter of the Associated General Contractors of America, with 265 members. David Smith is Executive Director.

Budget Bills Lumber on, Trespass Penalties Tighten with Proposed Amendments

19 February 2021
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By Nicole Rolf and Rachel Cone, Montana Farm Bureau Federation

Between virtual technology and a new bill drafting system, the 2021 Montana Legislative Session is operating at a slower pace than we’re familiar with. The Legislative body has chosen to opt out of its traditional Saturday floor sessions, saving those days for business days at the end of the season. Montana’s legislature is allowed to meet for no more than 90 working days. ‘Saving days’ by not conducting a floor session on Saturday will lengthen this process, but it won’t cost taxpayers additional operating money, as they’re still only meeting for the allowed 90 business days. 

This matters because it has pushed the transmittal deadline – the day all non-revenue bills must be moved to the second house – back several days. This means we have slightly more time to introduce bills and get them worked through the process before they must be transmitted to the other chamber. Right now, it looks like the transmittal deadline will be the somewhere in the end of the first week of March. 

House Bill 108: Revise trespass laws regarding permission for hunting, introduced by Rep. Denley Loge (R), HD 14. Montana Farm Bureau member policy supports.

This bill was first heard in the House Fish, Wildlife and Parks Committee and it was passed by the full House. This week the Senate Fish and Game Committee heard this bill and passed it in Executive Action shortly after. These amendments to current trespass statute regarding hunting makes the legal language more explicit and may make penalties more severe for failure to obtain landowner permission when hunting, trapping or retrieving game on private land.

This is an important bill to show support to private landowners who take trespass seriously. Under this amended legislation, a hunter who fails to obtain landowner permission and trespasses on private land may be fined a minimum of $135 (the current fine), or up to $500. This allows the legal body handling the charge to assign a penalty depending on the severity of the charge. It also requires any person convicted of trespass to forfeit any current hunting, fishing or trapping license issued by the state for not less than 12 months or more than three years. It also includes language to further penalize subsequent trespass convictions. This legislation sends a clear message that trespass is a serious offence in Montana. It’s important to note that this bill was brought forward by the Private Lands Public Wildlife (PLPW) advisory committee, with the intent of strengthening landowner/sportsmen relations. We appreciate this effort.

House Bill 187: Provide for local option sales tax, introduced by Rep. Dave Fern (D), HD 5. Montana Farm Bureau member policy opposes.

The concept of a “local option sales tax” has been brought to the legislative body in many forms, many times over the years. A local option sales tax would allow municipalities or city/county governments to implement a sales tax in their jurisdiction with the approval of a local electorate vote. This iteration of the idea would allow for up to 2 percent sales tax on retail goods, and it specifically notes that revenues could be used for property tax relief or for local infrastructure upgrades in the jurisdiction in which it is assessed.

While our farming and ranching members strongly support efforts to relieve property taxes, they are equally adamantly opposed to local option sales taxes. Here’s why: the funds raised by this tax are not evenly distributed throughout the state and essentially result in the redistribution or rural dollars to urban areas. Those of us who live in rural Montana know there are many supplies we have to go to larger towns to purchase. When a local option sales tax is in effect, we end up paying the tax in the city and leaving our money there. It exacerbates the transfer of rural dollars to more urban areas, essentially asking rural people to help relieve the property tax in urban areas or fund the infrastructure needs of that municipality. Rural people don’t benefit from this system.  

House Bill 14: Long-Range Building Bonding Program, sponsored by Rep. Mike Hopkins (R), HD 92; and House Bill 2: General Appropriations Act, sponsored by Rep. Llew Jones (R), HD 18.    

We’ve shared updates on these two appropriations bills before, but it’s important to note that these funding bills require long focus and diligence. We’re frequently monitoring their progress and show up regularly to voice our support for funding for specific parts of these bills.

In addition to providing bonding allocation for the proposed and much-needed new Veterinary Diagnostics Lab, HB 14 provides for long-term bonding to support a new Wool Lab and improvements at some of Montana’s Agriculture Experiment Stations, too. The Wool Lab is currently one of only two wool research and service laboratories in the country. It provides critical research and analytical services to a large region of sheep producers. Montana Agriculture Experiment Stations provide vital research for our state’s No. 1 industry, and innovations that support our livelihoods. Additionally, MFBF has gone on the record supporting the Department of Livestock and Department of Agriculture budgets, which are part of HB 2.

Minimum Wage Devastates

18 February 2021
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By Dan McCaleb, From Center Square

A $15 minimum wage would result in 1.4 million jobs lost and disproportionately hurt younger workers and those with less education, a new Congressional Budget Office report says.

President Joe Biden, U.S. Sen. Bernie Sanders and other Democrats have proposed raising the federal minimum wage to $15 an hour by 2025, more than double the current federal minimum of $7.25 an hour.

Biden says such a move would lift million of Americans out of poverty. While the CBO confirms the poverty-reducing impact, it also says it would hurt the economy.

“In 2025, when the minimum wage reached $15 per hour, employment would be reduced by 1.4 million workers (or 0.9 percent), according to CBO’s average estimate,” the report says. … “Young, less educated people would account for a disproportionate share of those reductions in employment.”

The higher minimum wage also would result in increased prices for consumers, including on health care, and businesses would be on the hook for higher unemployment premiums because more out-of-work people would seek the benefit.

“Under the bill, Medicaid spending would increase because the effects of increases in the price of health care services and increases in enrollment by people who would be jobless as a result of the minimum-wage increase would outweigh the effects of decreases in enrollment by people with higher income,” according to the CBO. “Prices, such as those for long-term services and supports and medical services, would increase as a result of negotiations that accounted for higher costs of labor facing health care providers.”

Other ramifications of a $15 minimum wage would be less investment by businesses.

“Workers need immediate help, but doubling the federal minimum wage when …small businesses are closing left and right is not the right answer,” Buzz Brockway, GCO’s director of public policy, said. “Recent data have shown us that unilateral minimum wage hikes hurt low-income, low-skilled workers the most.

Big Sky Mountain Ranks at Top

18 February 2021
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Big Sky, Montana ranks at the top of best places to buy a winter vacation home based upon on the annual rate of return on investment. The ranking and data comes from Vacasa, a vacation rental platform,  that annually releases the report “Best Places to Buy a Winter Vacation Home.”

Big Sky, Montana was given a “cap rate” of 9.2% with the median cost of a home at $541,842.

“The spotlight cast on professionally managed vacation homes over the past year not only resulted in an increase in bookings throughout the majority of our portfolio, but also in short term rental buyer interest,” said Shaun Greer, VP of Sales and Marketing for Vacasa. “

According to the recent data from the National Association of Realtors, second home sales soared in 2020 and were up by as much as 44 percent*.

Vacasa’s list of top winter markets includes destinations across the country that are within three to six hours of major metro markets, which aligns with Vacasa’s 2020 data that revealed travelers are hitting the road, but staying closer to home.  

The second ranking winter escape in terms of return on investment was the Poconos, PA, which had a cap rate of 6.5 percent, followed by Conway, New Hampshire with a cap rate of 6.2 percent. Median prices for the two locations are $200,190 and $238,930. Vail, Breckenridge, Steamboat Springs and Granby, Colorado also made the list.

The Utility Preapproval Mess: Socialism Republican Style

17 February 2021
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By Roger Koopman

When Travis Kavulla and I were still serving on the PSC, we often made the point that protected utility monopolies like NorthWestern Energy were dedicated to “privatizing their profits by socializing their risks.”  Profit — based on efficiency, performance and hard work — is a very good thing, that incentivizes every competitive and free enterprise.  But “profit” based on risk avoidance, protectionism and gaming the government system is the opposite of free market economics, and like socialism in general, rewards failure and punishes the consumer. 

HB 99, currently before House Energy, Technology and Federal Relations Committee, would go a long way to fix the perverse, socialistic system of utility monopoly regulation that currently holds sway in Montana, by repealing a terrible, monopoly-coddling process that provides preapproval by the PSC of the generation assets NWE seeks to purchase.  This aspect of utility regulation law literally turns incentive-based market economics on its head, and passes all the financial risk of a utility’s bad decisions and over-payments onto the ratepayer. Worse, current law actually rewards utility monopolies like NorthWestern for knowingly paying too much for an asset, by providing approximately 10 percent net profits for every extra dollar of cost the PSC allows in preapproval. There is no going back.

Most utilities across the nation do exactly what any private enterprise is expected to do: make prudent, business-smart decisions on their acquisitions, based on an extensive process of analysis and due diligence. They then live with those decisions on a risk/reward basis.  But not NorthWestern Energy!    Before they buy anything, they are guaranteed that there will be no risk attached to their decision.  The PSC’s preapproval ensures that all bad outcomes will fall on the ratepayer, while the utility will continue to have its customers cover all costs plus 10 percent.  So where is the incentive for NorthWestern to choose wisely and buy low?  The answer: there is none.

Preapproval is an ancient relic from “deregulation” days, when Montana Power couldn’t own power plants and was getting all its electricity from outside sources.  It has no relevance to the post-deregulation energy marketplace, and yet NorthWestern’s lobbyists have been able to successfully keep it in statute for 14 years since deregulation ended.  The company has become weaker, not stronger, as a result of being artificially insulated from normal business risk.  They continue to successfully socialize the risk through the power bills they send to all ratepayers, while reaping windfall profits on their bad decisions.  Tragically, there are numerous examples of this.

The reason this anti-market, anti-consumer, socialistic statute remains on the books is not because the liberal Democrats embrace it, but because the purportedly conservative, free market Republicans do!  Republicans just don’t get it when it comes to market-based, incentive-based regulation of state-sponsored monopolies like NorthWestern Energy.  For years now, GOP legislators have labored under serious misconceptions about utility regulation and the fundamental difference between risk-overcoming competitive enterprises and risk-avoiding, protected monopolies. 

I keep wondering when the light will go on, and these otherwise conservative Republicans will start reminding themselves of what they say they believe in, regarding freedom versus socialism.  I keep hoping that in the “next session,” Republicans will finally leap over the chasm they created between their free market beliefs and the way they swaddle NorthWestern Energy in a blanket of risk-shifting protectionism.

HB 99 is that opportunity for Republican legislators to take a stand for good, market based economics that not only serves and protects the interests of captive NWE consumers, but also prompts the utility itself to operate as a proud, confident and self-reliant enterprise, willing to assume its own business risks and become stronger and more efficient in the process.  On the energy utility front, it’s time to replace the lose-lose of socialism with the win-win of freedom. 

SBA Updates COVID Programs

17 February 2021
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By Brent E. Donnelly, District Director –  Montana U.S. Small Business Administration

Information on the COVID programs through SBA continues to be updated..  Monitor the SBA website at www.sba.gov.

l Economic Injury Disaster Loan (EIDL) – The application portal remains open for EIDL.  Businesses may apply for loans through December 31, 2021.

l  Updated FAQ’s are on the SBA website- Frequently Asked Questions: COVID-19 Economic Injury Disaster Loan (EIDL) (sba.gov)

l  EIDL main web page (includes information on the EIDL Targeted Advance):  COVID-19 Economic Injury Disaster Loans

l Shuttered Venues Operators Grant (SVOG) – FAQs were updated for more clarity and posted on the SBA website on Friday.  Shuttered Venue Operators Grants: Frequently Asked Questions Feb. 5, 2021 (sba.gov)  Organizations considering applying for SVOG should review the updates.  I am including a few (be sure to see the link for all) items of note below which we’ve received some questions: (note:  these are “copy/paste” from the FAQ’s)

l Is an entity that applied for and received a Paycheck Protection Program loan in July 2020 eligible to apply for an SVOG? Yes, if an entity applied and was approved for a PPP loan prior to Dec. 27, 2020, it is eligible to apply for an SVOG.

l  Is an entity that applied for a First Draw or Second Draw PPP loan on or after Dec. 27, 2020, eligible to apply for an SVOG? No. Both examples would not be eligible to apply for an SVOG unless and until the PPP loan application (whether First Draw or Second Draw) is declined.

l  Can an entity apply for a PPP loan now and decide later on the loan if it did not receive an SVOG? At what stage is a PPP loan considered “received”? No. Per the Economic Aid Act, as well as how the PPP loan system operates, entities cannot apply for a PPP loan and SVOG at the same time. Entities must make an informed business decision as to which program will most benefit them and apply accordingly. If an applicant is rejected by one program, it will then be eligible to apply for the other.

l  What can an entity do to get ready to apply? As the SBA works on building the application platform, it would be in your best interest to register for a DUNS number so you can then register in the System for Award Management (SAM.gov). Also, gather documents that demonstrate your number of employees and monthly revenues so you can calculate the average number of qualifying employees you had over the prior 12 months. Lastly, determine the extent of gross earned revenue loss you experienced between 2019 and 2020. This and additional information such as floor plans, contract copies and other evidence will be needed to apply for an SVOG.

l Must applicants register in the System for Award Management (SAM.gov) or can they use other identifiers like ITINs or EINs to apply for an SVOG? SVOG applicants need to register with the federal government’s SAM at www.SAM.gov to apply and cannot use an Individual Taxpayer Identification Number, Employer Identification Number, or other means of identification or registration. Interested parties are encouraged to obtain a Dun and Bradstreet (DUNS) number (a prerequisite for SAM registration) as soon as possible. With a DUNS number, interested parties then should immediately begin registering in SAM.gov, as the SAM registration may take up to two weeks once submitted.

l When will SVOG applications open? The SBA is working expeditiously to open SVOG applications and encourages you to stay up to date by frequently visiting www.sba.gov/coronavirusrelief for information.

l  SVOG website:  Shuttered Venue Operators Grant (sba.gov)

Montana Highlights 2-15-21

17 February 2021
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Lea and Dennis Doherty plan to open Whitefish SuperWash during the week of February 8. The SuperWash includes a spot for every type of needed wash from pets to RVs. The SuperWash is located at 6354 US 93 South in Whitefish. The wash itself and the materials used to clean vehicles are all environmentally friendly.

Red Rooster, a home goods retail store in Missoula, has announced they are closing after 27 years in business. The store will be selling everything 20% off until Feb. 28 and some items are on clearance for 60% off.

The Morse family of Columbia Falls held the grand opening of Flitter Bee Buzz Thru on Saturday, Feb. 13. They plan to sell hot and cold beverages, along with pastries like breakfast croissants and cinnamon rolls. Flitter Bee Buzz Thru is located at 2120 Ninth St. W. in Columbia Falls.

According to the National Association of Homebuilders, lumber prices skyrocketed 130% between April and September of 2020, which has raised the cost of constructing a new single-family home by $16,000. According to Montana statistics:

*  In 2004, there were 10,000 people in Montana employed by lumber mills or working in forestry. As of 2010 there were 7,030 and 7,641 in 2020.

* The private forestry industry earned $508 million in 2004, $305 million in 2010, and in 2020, it was up to $347 million.

Lumber production has dropped over 50% from 985 million board feet in 2004 to 428 million board feet in 2020.

The Trailhead store in Southgate Mall, an outdoor gear shop focused on women’s clothing, has announced it is closing. The business is focusing on the two other Trailhead stores, one downtown and a boat shop near Southgate Mall.

One of the steps taken to keep Montana Tech viable is the adding of 10 students per semester to the nursing program. The incremental additions will eventually increase the program size by 50% to 150 students by fall 2022. Nursing students at Tech will benefit from a state-of-the-art Nursing Simulation Center. The bid goes out during February for construction of the $1.7 million project.  Students will be practicing their field skills at the center by spring semester of 2022.

Tesla has invested approximately $1.5 billion in Bitcoin and announced plans to begin accepting the digital currency as payment for its vehicles shortly. The price of Bitcoin soared 15% with the Tesla announcement.

Lone Mountain Land Company, which manages Spanish Peaks Mountain Club, Moonlight Basin and other businesses in Big Sky, have announced that they are collaborating with the Big Sky Community Housing Trust to develop affordable rentals on and near the site of the former American Bank building. The current plan is to build two 21-unit apartment buildings with a mix of one, two and three bedroom units. All of the units in the project will be deed restricted from becoming short-term rentals. The company has also purchased Buck’s T-4 Lodge to develop dorm-style housing. LMLC is also planning a few more developments, which include two 24-unit, dorm-style apartments and more rental housing.

Cottonwood Environmental Law Center, Montana Rivers and the Gallatin Wildlife Association filed a motion for a preliminary injunction against Big Sky Water and Sewer District. The motion asks the court to prohibit the district from accepting new sewer hookups and irrigating the Meadow Village Golf Course with treated wastewater containing concentrations of nitrogen above 10 milligrams per liter. The groups also requested that the court require the district to disclose nitrogen concentrations in water used to irrigate the golf course.

The Butte-Silver Bow health board amended COVID-19 restrictions to allow businesses to remain open until 12:30 am. County bars, restaurants, breweries, distilleries, and casinos will be allowed to stay open longer. They have had to close by 10 pm since December.

The Montana Department of Transportation (MDT) announced new load postings for the Coffee Creek Bridge in Fergus County. The postings are part of a multi-year effort to update load ratings and postings on Montana bridges as mandated by the Federal Highway Administration.  The FHWA mandate is in response to changes in the trucking industry over the last decade. Truck manufacturers are building specialized hauling vehicles, which are capable of legally carrying heavier loads than typical vehicles have in the past. Often times one or more axles can be raised or lowered as needed to comply with statutory weight limitations.  To comply with the mandate, MDT is updating load ratings for 4,500 public bridges across the state, an effort that is expected to take about four years to complete.  

Banking Regs Problematic

17 February 2021
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The Office of the Comptroller of the Currency, an independent bureau within the United States Department of the Treasury, has finalized a new mandate on bank lending. Though aimed at expanding access to banking services, CEI Senior Fellow John Berlau warns the rule will impose significant red tape and political worries on banks of all sizes:

“The final ‘fair access to financial services’ rule released by the Office of Comptroller of the Currency is the wrong answer for politically disfavored businesses and will burden banks of all sizes with more red-tape and government-interference with financial transactions. The rule will lead to more, not less, politicization of the financial sector as businesses from abortion providers to gun manufacturers can harangue Main Street banks for ‘political bias’ in routine lending decisions. CEI believes the government should neither pressure banks to avoid certain industries, as the Obama administration did in the now-defunct Operation Choke Point, nor force banks to provide financing to these industries, as this rule would do.

“It is especially disappointing that the final rule does not appear to exempt banks of any size from its reach. While the OCC states a ‘presumption’ of $100 billion asset threshold, it specifically adds that banks smaller than this size could be subject to the rule if they meet a vague definition of ‘raising the price’ of a financial service. This will leave a costly state of uncertainty for the nation’s smallest banks.

“As I noted in comments to the OCC, the rule ‘would particularly harm the new entrants to financial services that the OCC is now rightly championing. These firms may have specific fintech areas of expertise, or they may wish to specialize in serving businesses specific to their respective communities.’ Thus, these banks may get punished by this rule for excluding types of businesses outside their areas of specialization.