Author: Press Room

Stockman Bank Awarded for Stability and Strength

28 August 2020
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BauerFinancial, Inc., the Nation’s premier bank rating firm, announced that Stockman Bank of Montana has once again been awarded its highest (5-Star) rating for financial strength and stability. Earning a 5-Star rating indicates this bank excels in areas of capital adequacy, profitability, asset quality and much more. Earning and maintaining this top rating for 47 consecutive quarters, especially in this environment, makes its accomplishment even more impressive. That makes Stockman Bank of Montana an “Exceptional Performance Bank”, a status reserved for banks that have earned Bauer’s highest rating consistently for at least 10 consecutive years.

 “It’s a noteworthy accomplishment in the best of times,” stated Karen Dorway, president of the research firm. “Today, it speaks volumes. How do they do it? A solid sense of community, working one on one, providing solutions to people who need it – that’s the mark of a true community bank. Stockman Bank of Montana’s team members have been right there on the front lines doing whatever they could to help their neighbors and friends throughout the pandemic. And, they’ve done it all without compromising the strength of the institution itself. That’s doing well while doing good.”

Scoular Co. Enters into Licensing Agreement with Montana Microbial

28 August 2020
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By Holly Demaree-Saddler, Montana Manufacturing Extension Center

The Scoular Co. has entered into an exclusive licensing agreement with Montana Microbial Products to produce and sell a barley protein concentrate (BPC) in North America and Asia.

BPC is a sustainable, plant-based alternative protein used in aquaculture feed and pet food. It is produced from non-GMO barley.

Scoular said it plans to build a $13 million manufacturing facility to accommodate production of BPC. The facility location has not been finalized but is expected to be in Idaho for better access to barley producers. The facility is anticipated to be operational by May 2021.

The new facility is projected to process 1.9 million bushels of barley annually, with production expected to expand over the next several years. A high-energy liquid feed supplement for cattle feeders will be co-produced, Scoular said.

“We’re excited to work with Montana Microbial Products to commercialize barley protein concentrate and look forward to collaborating with many industry stakeholders,” said John Messerich, senior vice president and division manager of Feed Ingredients at Scoular. “In a world of growing protein demand and an uncertain economic environment for farmers, BPC will contribute to Scoular’s mission of adding value to multiple industries with sustainable products.”

Montana Microbial Products produces barley protein concentrates. It operates a pilot plant in Melrose, Mont., and a research lab in Missoula, Mont.

SBE Comments on Freeloaders of US Innovation

28 August 2020
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Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement in response to President Trump’s Executive Order (EO) regarding an International Price Index (IPI) for drugs, which imposes foreign-based price controls on U.S. pharmaceuticals, along with the move to develop rules to allow for drug importation:

 “Many countries across the globe freeload off of U.S. innovation, and that is particularly the case when it comes to bio-pharmaceuticals. Our innovators spend countless years and billions of dollars investing in the development of pharmaceuticals and breakthrough treatments, and foreign economies gladly use these life-saving drugs but put them under price control regimes. The U.S. cannot cede to this doomed model.

 “Price controls never work, and when it comes to life-saving drugs and innovative medicines, today’s EO will undermine America’s strong leadership and competitive advantage. Rather than embrace price controls, the Administration needs to boldly address this imbalance through trade agreements with countries that are ripping us off. Fully opening markets to U.S. drugs, protecting the IP of these innovations, and negotiating to lift price controls will help our companies more fairly recoup their investments, which will lower drug prices for all. Small pharmaceutical companies dominate this critical U.S. sector, and these entrepreneurial firms will be the hardest hit by the move to adopt foreign price controls as American policy. In the end, patients, innovation, and our economy will all suffer.

Pass Through Businesses Pay Half of All Taxes, Montana Has Most

27 August 2020
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The Tax Foundation

Pass-through businesses, such as sole proprietorships, S corporations, and partnerships, make up a majority of businesses in the United States. The owners of these firms pay individual income tax on income derived from these businesses. The marginal tax rates vary for pass-through firms depending on the state where they operate, as states tax individual income differently.
In 2018, pass-through firms made up over half of nearly every state’s private sector employment. The share of private sector employment provided by pass-through firms ranges from 49.7 percent in Hawaii to 72.5 percent in Montana.
Top marginal tax rates faced by pass-through firms also vary by state, ranging from 40 percent in states with no state and local income tax, like Wyoming and Florida, to 53.7 percent in California. These combined rates include federal, state, and local income taxes in addition to payroll tax.
Montana imposes a marginal tax rate of 46.9 percent.
A driver of variation in top marginal income tax rates faced by pass-through firms is whether a state taxes individual income and what the top marginal rate is. For example, states without individual income taxes, such as Alaska, Florida, South Dakota, Texas, Washington, and Wyoming, apply lower combined income tax rates on pass-through firms.
By contrast, states like California (with a 13.3 percent top marginal individual income tax rate) and New York (with a top marginal rate of 8.82 percent) subject pass-through firms to top combined marginal rates exceeding 50 percent. (Nevada does not have an individual income tax but has an uncapped payroll tax called the modified business tax that is levied on wages at a rate of 1.475 percent, which increases its top tax rate for pass-through businesses.)
Three states—Alabama, Iowa, and Louisiana—allow taxpayers to deduct a portion of their federal taxes paid from their taxable income. This reduces the amount of income subject to state income tax and lowers the top marginal rate faced by pass-throughs. Other states, such as Missouri, permit some deductibility but limitations to the deduction mean the top marginal rate is not affected.
Most of a pass-through firm’s tax burden is from federal income and payroll taxes. Pass-through firms must remit payroll taxes to fund programs such as Social Security and Medicare in addition to paying federal individual income tax with a top rate of 37 percent.
Qualifying pass-through firms may use Section 199A, commonly known as the pass-through deduction, to deduct 20 percent of their qualified business income from federal income tax. However, the pass-through deduction is subject to limitations for firms earning above certain income limits that operate in a “specified service trade or business” (SSTB) and other guardrails that limit the size of the deduction. This means that many pass throughs are not eligible for Section 199A and face top marginal income tax rates without it.
Pass-through firms make up a large part of the American economy and workforce, providing over half of private sector employment in nearly every state. The combined top marginal tax rate faced by these firms is a product of federal, state, and local individual income taxes. Policymakers should keep in mind the combined tax burden levied on these businesses when considering changes to tax policy.

Roundabout Completed at Hwy. 312 and Five Mile Road

27 August 2020
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The Montana Department of Transportation (MDT) announced that the paving of a single-lane roundabout on Old Highway 312 and Five Mile Road is complete. Work will now entail installing new signs, rumble strips on Five Mile Road and interim striping. In the next weeks, concrete finish-work and landscaping will occur, followed by chip sealing at the end of August. Drivers are advised to travel safely and be prepared for flaggers, workers, heavy truck traffic, and equipment entering.

Other Pipelines Expand in Face of Shutdown of Dakota Access Pipeline

27 August 2020
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As the Dakota Access pipeline deals with lawsuits aimed at closing it, other pipeline companies are anticipating an increase in demand for transportation and are expanding their pipelines. Also, the higher –risk and higher- cost alternative of transporting oil by tanker cars on railroads is seeing an increase, according the Oil Patch Hotline.
Kinder Morgan’s Highland crude oil pipeline, which carries 88,000 BOPD, which originates near Sidney, the pipeline e could be expanded with the addition of a new compressor to add another 35,000 BOPD in the next 12 to 18 months, according to CEO Steven Kean.
“So we have seen increased activity and interest in HH,” Kean told Wall Street analysts recently. “Our volumes were up this month versus last month. That is a function of, I think, really two things, concerns about takeaway, but also for reasons of priority of access to HH, people do want to maintain their history on the system. So we continue to see barrels that might have otherwise gone someplace else, and they’re continuing to come our way.”
If there was a shutdown of Dakota Access, it could expand the WTI differentials in the Bakken, he added.
Interstate Energy Partners, which is the parent company of Dakota Access, is appealing to the Federal District Court in Washington, DC, a recent decision by a judge to empty the pipeline while a 13-month environmental review takes place. The Dakota Access Pipeline moves 600 BOPD (Barrels of Oil per Day).
“It’s a bad broader message for pipeline infrastructure, but also for our business, particularly on the gathering side,” Kean said.
In the meantime, Crestwood Equity Partners said it is capable of moving 160,000 BOPD of crude oil by rail out of its Epping, ND terminal.
It is one of a dozen terminals capable of moving crude out of the state. About 300,000 BOPD—one third of North Dakota’s daily production, is shipped out daily on unit train tanker cars. Moving oil by rail has a greater environmental impact, poses greater environmental and safety risks, and costs more.
“In the event of a shut-down of the DAPL pipeline, Bakken basis differentials will be negatively affected in the short term until production volumes are reallocated to other pipelines and rail facilities,” said Crestwood President, Chairman and CEO Robert G. Phillips.

Flexibility Act Gives Options

26 June 2020
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With the passage of the Paycheck Protection Program (PPP) Flexibility Act by Congress, the US Small Business Administration has announced it will promptly issue rules and guidance to implement them, including a modified borrower application form, and a modified loan forgiveness application.

 The modifications will implement the following important changes:

Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness.  Borrowers who have already received PPP loans retain the option to use an eight-week covered period.

* Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75% of the loan forgiveness amount  must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered

period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.

* Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration related to worker or customer safety requirements related to COVID–19.

* Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.

* Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.

* Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender 

* In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.

SBA Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin  said, “We want to thank President Trump for his leadership and commend Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader McCarthy for working on a bipartisan basis to pass this legislation for small businesses participating in the Paycheck Protection Program.

  “This bill will provide businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country.”

Duo Promoted to Joint Position

25 June 2020
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Heather Gnerer and Melisha Williams have been promoted to assistant vice president, customer service officers at their respective branches. Their responsibilities include operational support and market assistance in regards to customer service, staff training, assisting customers and overseeing the delivery of new account services and client support.

Gnerer brings over 10 years of banking experience to the position, which includes customer service, account openings and new business development. She has been with Stockman Bank since 2014 and was previously a customer service representative at the Billings Heights location.

She earned her Associates Degree in administrative assistant of applied science from Montana State University Billings in 2010. She has completed the Billings Chamber of Commerce Leadership program and participates in Stockman Bank related events. Gnerer is located at 800 Main Street. 

Williams has been with Stockman Bank since 2011, bringing nine years of banking experience to the position which includes bank operations, Billings market escrow clerk, new account openings, customer service and business development. She previously served as a customer service representative/teller supervisor for Stockman Bank in Worden.

Williams is involved in the community, participating in the Worden Community Cleanup and the annual Stockman Customer Appreciation tailgate party. She is located at 2450 Main Street in Worden.

Endless Litigation

24 June 2020
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By Aaron Johnson, Western Energy Alliance

Last month, we reported that Judge Morris in Montana and Judge Bush in Idaho vacated leases in Wyoming, over the objections of the State of Wyoming and Western Energy Alliance who intervened in defense of the Interior Department. Another month, another ruling by activist Judge Morris vacating yet more lease sales in Montana and Wyoming. This time the judge claimed that the leases had to be canceled because the Bureau of Land Management didn’t defer acreage from the sales, even though the sales were conducted under the Obama Administration’s sage grouse plans, which the judge prefers. It’s another clear case of this activist judge imposing his policy preferences from the bench. We like our chances on appeal.

Emboldened by their successes, possessing unlimited funds and not content with any leasing at all, environmental groups filed yet another lawsuit, this time challenging 23 sales from 2016 to 2019 involving over 2,000 leases in Colorado, Montana, New Mexico, Utah, and Wyoming. Western Energy Alliance quickly intervened, as it’s important for the industry to have a seat at the table in defense of federal leasing. Basically every lease sale from 2016 to 2019 is covered by a lawsuit. Western Energy Alliance has taken a leading role in defending the integrity of the federal leasing system.

Chamber Advocated for More Outdoor Seating

24 June 2020
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The Billings Chamber of Commerce announced last week, “With only one dissenting vote, City Council approved a resolution that will allow restaurants and bars to serve more people outdoors. The Billings Chamber, in partnership with the Yellowstone County Economic Response & Recovery Team and city staff, helped lead the way in identifying the need for this resolution and bringing it to City Council.

“As the state of Montana moves ahead into Phase II of the governor’s reopening plan, restaurants can technically increase occupancy from 50% to 75%, but many establishments are forced to remain at half capacity due to social distancing requirements. The resolution that was passed on Monday will allow establishments to seat more customers by allowing them to temporarily expand their outdoor seating areas or create new ones where alcoholic beverages can be served. This temporary ordinance passage means more economic activity, jobs, and is a step in the right direction for our return to normal.”