By Dan Brooks, Billings Chamber of Commerce

Now that we’re a few weeks into the Legislative Session, the question often arises, “How’s it going in Helena?” I pause and think of quoting a favorite tragic hero, trekking toward the Gap of Rohan: “It’s moving fast …and against the wind.”

Over 550 bills have been introduced so far—almost 200 more than this time during the 2021 Legislative Session which was an exceptionally busy session with 1,313 bill introductions.

With more than 4,500 bill draft requests in, this session is on pace to introduce more legislation than 2021 and has the potential to eclipse 2007 as the session with the most bills introduced in the last 20 years. Legislators are limited, however, by how much the state’s bill drafters (legislative staffers who actually write the new laws) can take on. Judging by the current trend line of bill introductions, and considering General Bills (not Revenue, Appropriation, or Referenda Bills) cannot be introduced after February 23rd, I’d be surprised if this session surpasses 2007 for the most introduced bills.

Even if this session isn’t record-breaking in that respect, it is still extremely busy. If you’re looking for tools to help you keep up, our Data Dashboard is tracking a few session statistics. You can also find out:

 Which local legislator has the most bills introduced and how many bills our local delegation is working on? Granted, this isn’t an entirely fair comparison as a few legislators are carrying bills such as SR 43, “Confirm governor’s appointees for the board of housing.” These bills aren’t proposing changes to the law, but are necessary to conducting government business.

 The number of bill hearings in various policy committees. Curious what the legislature is spending most of its time debating? Other than the budget, the House and Senate Business & Labor Committees are racking up the most hearings so far. 

Senate Bill 145 — Local distribution of lodging tax revenue, Sen. Keith Regier (R) SD 3 – Chamber opposes. This bill redirects funding from the Department of Commerce and the General Fund to go toward property tax relief. As is often the case, policy makers propose ideas to re-divide the same metaphorical pie, robbing Peter to pay Paul, as the saying goes. In this case, diverting money from Dept. of Commerce that funds tourism grants and programs may lead to a reduction in tax collections, which the sponsor wants to go toward property tax relief. If the bill solely redirected funds from General Fund, the Chamber would have no concerns. The bill was heard in (S) Tax on Wednesday, January 18.

House Bill 245 — Revise credit for trades education and training, Rep. Sue Vinton (R) D 56— Billings Chamber supports. This bill builds on the success of the Montana Trades Education and Training Tax Credit, established last legislative session, which offers a credit for 50% of an employee’s education, up to $2,000 annually. HB 245 expands the number of occupations and industries that qualify for the tax credit. The Department of Labor estimates the current credit covers 38,000 employees. The expansion offered by HB 245 would include an additional 31,130 employees. This is a great program for getting our workforce additional education.

A few of Governor Gianforte’s tax proposals are up for debate, Among the proposals are a couple the Billings Chamber is eager to support.

The first is House Bill (HB) 212, a bill to increase the business equipment tax exemption from $300,000 to $1 million. Meaning, businesses with market value of class 8 property less than $1 million are exempt from taxation. And those businesses with class 8 property valued at over $1 million will see reduced taxes.

 For Yellowstone County, that means significant savings to our business community. There are 502 entities with business equipment tax liability in tax year 2022. House Bill 212 would fully exempt 273 entities, reduce liabilities for the remaining 229, and provide a total savings of $1.293 MILLION to businesses in Yellowstone County.

 The Billings Chamber has long been a supporter of reducing or eliminating the business equipment tax. We were enthusiastic supporters of raising the exemption to $300,000 during the 2021 Session, and we believe HB 212 is an even better step in the right direction.

Another tax bill making it’s debut this week is Senate Bill (SB) 121. This bill would lower the top marginal income tax rate from 6.5% to 5.9%. It also comes with significant benefits to Yellowstone County taxpayers. The Department of Revenue estimates SB 121 will result in a tax savings of $20.5 million for Yellowstone County taxpayers in tax year 2024. With many of our small businesses filing as pass-throughs, this means more money to reinvest in their businesses.

 Reducing Montana’s top income tax rate to 5.9% would allow the state to take a step down from the top of the tax rate podium. Currently, Montana holds the title for highest top marginal tax rate among our neighboring states. See the graphic below and note that it lists the state’s top rate as 6.75 in January 2022 rather than 6.5, which would go into effect in 2024 per legislation passed in 2021. 

By Chris Woodward, The Center Square

A new report aims to show how California-style zoning practices make it difficult to build affordable starter homes in Montana. 

The updated Montana Zoning Atlas 2.0 from the Frontier Institute also outlines a “Pro-Housing Platform” with policy solutions that local and state leaders can adopt. 

The updated atlas utilizes “a new standardized methodology” that was developed by Cornell University Professor Sara Bronin for the National Zoning Atlas project, “which aims to depict the nation’s 30,000 zoning codes in a clear, publicly accessible map,” according to Frontier Institute President and CEO Kendall Cotton.

“The goal of the Montana Zoning Atlas is to provide community leaders with actionable data which clearly demonstrates how harmful zoning practices worsen the housing shortage by making it difficult to build affordable types of homes in Montana cities,” Cotton told The Center Square.

Published in March 2022, the original zoning atlas accounted for just two zoning factors that impact housing affordability. It was also limited to six cities, whereas the new atlas examines over 100 different variables of zoning regulations. 

“It finds 50% of zoned land in 13 of Montana’s most in-demand counties either outright prohibits or penalizes affordable multifamily starter homes like duplexes,” Cotton said.  

Montana’s population grew 10% from 2010 to 2020, but the supply of housing grew only by 7%, according to Cotton. 

“Governor Greg Gianforte’s Housing Task Force noted that strict local zoning regulation outright prohibits the most affordable types of starter homes like duplexes, townhomes, and triplexes in vast portions of Montana cities,” Cotton said. “People aren’t just getting priced out of Montana cities, they are getting zoned out.”

Cory Shaw, executive director for the Montana Building Industry Association, agrees that housing supply is a problem. Shaw told The Center Square that a lack of housing is a major issue for workers relocating to the state for jobs.

“If there are homes, those that are available are extremely expensive and cost prohibitive due to supply and demand driving up prices,” Shaw said. “Land is tied up in zoning and growth plan restrictions that prevent new construction. All of these play into the detrimental impact to local businesses that a lack of housing can cause.”

The housing crisis is one of the reasons why organizations such as Shelter WF exist.

Nathan Dugan, co-founder and president of Shelter WF, said downtown businesses in Whitefish have had to limit hours due to staffing problems. Meanwhile, Dugan said it is increasingly difficult for younger people to lay down roots and build community in Whitefish. 

“The overall vibrancy of nightlife has decreased as well over the years as many younger folks have been forced out of town due to housing costs,” Dugan said.

The Frontier Institute’s Pro-Housing platform asks Montana leaders to step up with “bold, pro-housing reforms on a statewide scale to give Montana landowners more freedom” to build affordable homes, such as duplexes, triplexes, and fourplexes.

“These are some of the most affordable starter home options,” Cotton said. “These types of homes are often referred to as the missing middle because they are outright prohibited in vast portions of America’s cities.”

The platform also says local governments and state lawmakers should “prohibit excessive minimum lot areas in cities,” a move that “can boost the supply of housing.”

State Sen. Jeremy Trebas, R-District 13, is among lawmakers trying to push reforms. He plans to carry a proposal suggested in the governor’s housing task force report that would allow for more multi-family units to be constructed where only single-family housing is currently allowed.

“I agree with Frontier Institute’s position, especially that it prevents starter homes and encourages urban sprawl,” Trebas told The Center Square. “People are pushed to the outer parts of a city or bedroom community because costs in the city close to where they generally work is too high.”

It is time once again to register for the 31st Annual Job Service Employer’s Committee (JSEC), Jobs Jamboree at MetraPark in the Montana Pavilion on March 15, from 11 am to 6 pm.

This is an opportunity to showcase your business at Montana’s largest job fair. The event is offering 3+ Premier Sponsorships (2/15/23 deadline) among the basic registration and event sponsorship.

The Jobs Jamboree is a valued event by both employers and job seekers; 100+ employers and over 1,100 job seekers attended the 2022 event. It’s an opportunity to interact and connect with qualified job seekers and network with fellow employers in one location.

This year the Billings Job Service Employers Committee (JSEC) has partnered with the Employer Support of The Guard and Reserve (ESGR) to offer Jobs Jamboree to Montana Guard and Reserve members, military spouses and veterans. Event proceeds go toward scholarships. Over the years, JSEC has used these funds to award 37 scholarships to apprentices and college students worth $29,500. JSEC is offering a convenient option of online registration and payment. All registrations are online, if you need assistance, contact Samantha Hensel 406-655-6061 or Brittany Lane 406-655-6057. To reserve a booth, register online at Lunch will be provided for up to two representatives. Additional meals can be purchased for $10 each.

Business relocations projected to create 900 new Montana jobs

Fifteen relocating or expanding businesses will create 900 new Montana jobs, reported Gov. Greg Gianforte in his State of the State address.

In his State of the State address, Governor Greg Gianforte announced the relocation or expansion of 15 businesses to Montana that project to create 900 new Montana jobs.

“As we lead the Montana comeback, we’re creating an environment where businesses can thrive, create more good-paying jobs, and increase opportunities for all Montanans,” Gov. Gianforte said. “There’s no doubt about it: Montana is open for business.”

 “We’ve made Montana more attractive to innovative job creators, and they’re investing in our state and our people,” he said.

Since the governor took office, 15 businesses from a variety of sectors announced a relocation or expansion to Montana.

They include Hyundai Motor Group, NextEra Energy Resources, and Tonix Pharmaceuticals, which project to create nearly 500 jobs combined.

The 360 Electrician, which coaches over 250 electrical contractors nationwide, relocated from California to Florence, Montana.

“We chose Montana, and plan to grow here,” said Jeff Guldalian, CEO of The 360 Electrician. “Montana is the triple threat. You have a friendly business climate, can be successful, and can enjoy that success here, too. The Montana difference makes doing business so much better.”

Avanti Helium, which focuses on the exploration, development, and production of helium, has expanded its operations from Canada to Shelby, Montana.

“We’ve found Montana’s business climate to be excellent,” said Chris Bakker, CEO of Avanti Helium. “The communities have been welcoming and the interactions with various governmental bodies has been reasonable, fair, and efficient. The Treasure State will be central to our future investment plans.”

Businesses relocating to or expanding to Montana since January 2021 include:

The 360 Electrician, Inc., a commercial and residential electrical contracting firm which also operates an online community helping electricians around the country adopt best practices, relocated from California to Florence and projects to create 10 Montana jobs.

Amazon engages in the retail sale of consumer products and subscriptions through online and physical stores in North America and internationally. Amazon announced its first Montana dispatch and delivery facility in December 2022. With the new facility in Missoula, Amazon projects to create 140 Montana jobs.

Avanti Helium  in the Flathead is focused on the development and production of helium across western Canada and the United States. Avanti projects to create more than 20 Montana jobs.

Berkshire Hathaway Energy provides energy to more than 12 million customers and end-users through the United States, Great Britain and Alberta, Canada. The company will leverage Montana’s wind power from NaturEner. It expanded its operation to Judith Gap and projects to create 20 Montana jobs.

Fair Isaac Corporation (FICO) relocated its corporate headquarters to Bozeman. The leading analytics software company, which helps businesses in more than 90 countries, expects to create more than 10 Montana jobs.

GlassyBaby, a manufacturer of high-quality handblown candles and glassware, expanded its operation from Washington State to Livingston, Montana. GlassyBaby could employ as many as 140 Montana workers.

Hyundai Motor, a global automotive manufacturer, announced its new research and development center in Bozeman in May 2022. Hyundai is investing an estimated $20 million in the new headquarters and anticipates creating more than 50 Montana jobs.

INDUSTRY provides customizable workspaces for long-term tenants. The company expanded its operation from Colorado to Bozeman and projects to create 10 Montana jobs.

Melcher Manufacturing, which manufactures high quality composite ramps for the moving and trucking industries, relocated from Washington State to Helena, and expects to create seven Montana jobs.

NextEra Energy Resources, LLC, delivering clean energy across much of North America, expanded its operation from Texas to Rosebud, Custer, and Carter counties. The company expects to create 300 Montana jobs.

Snowflake, Inc., a global cloud data analytics vendor, relocated from California to Bozeman, and is expected to create 20 Montana jobs.

Sostena Corp. provides agri-tech solutions, offering customers, including family farmers, tech solutions needed to help growers maximize their efficiency while reducing costs. Sostena located to Missoula, and expects to create 40 Montana jobs.

Sustainable Oils, Inc., the world’s leading developer of camelina, moved its North American headquarters from California to Great Falls in 2022, and it projects to create  15 Montana jobs.

Tonix Pharmaceuticals will support Phase 3 and commercial scale manufacturing of live-virus vaccines. Tonix expanded its operation to Hamilton, and projects to create 120 Montana jobs.

Vista Outdoor designs, manufactures and markets consumer products in the outdoor sports and recreation markets in the United States and internationally. Vista expanded its operation from Minnesota to Bozeman, will locate one of its headquarters in Bozeman, and anticipates creating 25 Montana jobs.

By Cameron Arcand, The Center Square

The United States Customs and Border Protection is asking Americans to stop trying to smuggle in raw eggs from Mexico. 

As avian flu is causing the price of eggs and poultry to rise, along with the current inflation rate, people are purchasing the products in Mexico instead of shelling out the extra cash at the grocery store.

“There has been a large increase in the volume of prohibited food items, such as raw eggs and raw poultry meat, brought by travelers from Mexico. We would like to remind the traveling public that federal agricultural regulations remain in effect,” Jennifer De La O, CBP Director of Field Operations in San Diego, said in a news release on Jan 20. 

In a separate tweet, De La O said that people could face up to a $10,000 fine if they take a crack at illegally smuggling the items. 

The U.S. Department of Agriculture estimates that over 57 million birds have died from the illness, according to the news release. 

As of December, egg prices have increased 60% in the U.S. compared to December 2021, the Consumer Price Index determined. 

Confiscations have reportedly increased by 300% since last month, according to KENS 5. 

By Bethany Blankley, The Center Square

Twenty-five attorneys general and several other plaintiffs have sued the Biden administration asking the court to halt a federal ESG policy that could negatively impact the retirement savings of 152 million Americans. Montana is one of those states.

The lawsuit was filed in U.S. District Court Northern District Amarillo Division naming Secretary of Labor Martin Walsh and the U.S. Department of Labor as defendants.

It alleges the U.S. Department of Labor created a rule prioritizing “woke” Environmental, Social, and Governance (ESG) investing that jeopardizes the retirement savings of 152 million workers, or two-thirds of the U.S. population.

Last November, the Department of Labor finalized a rule allowing companies to prioritize ESG policies when choosing retirement plans. It was the last phase of a nearly two-year effort to reverse a Trump-era rule banning the practice.

The department said it was implementing the rule to “remove barriers to plan fiduciaries’ ability to consider climate change and other environmental, social and governance factors when they select investments and exercise shareholder rights.”

In response, Texas Comptroller Glenn Hegar said President Joe Biden was “using unelected bureaucrats … to push his radical ESG agenda, undermine the Texas economy and jeopardize our national security and energy independence.

“Even as free market forces begin to erode the ESG fairy tale and expose the intellectual dishonesty and utter lack of transparency in this investment scam, President Biden is using the DOL rulemaking process to double down on policies that put his social agenda above the retirement needs of hard-working Americans.”

Less than two months later, Texas Attorney General Ken Paxton sued, along with 24 other attorneys general.

“Beyond being detrimental to the retirement accounts of hardworking Americans, the rule is fundamentally unlawful, as well as arbitrary and capricious,”  Paxton said, noting that it violates the Employee Retirement Income Security Act of 1974 (ERISA), created to protect retirement assets, and the Administrative Procedure Act.

“This rule is an affront to every American concerned about their retirement account,” Paxton said. “The fact that the Biden Administration is now opting to risk the financial security of working-class Americans to advance a woke political agenda is insulting and illegal. For generations, federal law has required that fiduciaries place their clients’ financial interests at the forefront, and I intend to fight the Biden Administration in court to ensure that they cannot put hard-working Americans’ retirement savings at risk.”

The rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” follows an executive order Biden issued last May. His order directed the federal government to implement policies “to help safeguard the financial security of America’s families, businesses and workers from climate-related financial risk that may threaten the life savings and pensions of U.S. workers and families.”

The rule change “will bolster the resilience of workers’ retirement savings and pensions by removing the artificial impediments – and chilling effect on environmental, social and governance investments – caused by the prior administration’s rules,” Acting Assistant Secretary for the Employee Benefits Security Administration Ali Khawar said in a statement last fall. “A principal idea underlying the proposal is that climate change and other ESG factors can be financially material and when they are, considering them will inevitably lead to better long-term risk-adjusted returns, protecting the retirement savings of America’s workers.”

November’s notice followed a March 2021 and October 2021 announcement and included comments received from the public.

Last August, Hegar directed state agencies to divest from 350 individual investment funds and 10 financial companies that were prioritizing ESG, and particularly boycotting oil and natural gas companies, as part of their portfolio. Not long after, Gov. Greg Abbott told The Center Square that the directive was working. He said some of the companies on Texas’ list were making an effort to get off of it.

Florida Gov. Ron DeSantis has also taken action, including prohibiting the state’s retirement fund from investing in funds that prioritize ESG.

Samuel Stebbins,  24/7 Wall St. for Center Square

Public employee pension systems are some of the largest financial liabilities on state government balance sheets. The 50 states have over $4.5 trillion in cumulative pension liabilities combined, roughly double the amount all 50 states spent in fiscal 2020. For years, state pension systems were woefully underfunded in much of the country, but according to a recent report from the Pew Charitable Trusts, this trend may be reversing.

Driven by higher investment from both employees and employers, state pension systems have largely stabilized as of 2020. Since 2007, states across the country have more than doubled annual pension contributions, often cutting funding for other programs to do so.

Still, some states are better positioned to pay public sector employees in retirement than others. In Montana, pension liabilities totaled an estimated $17.5 billion in 2020. Meanwhile, the state’s pension assets totaled $11.8 billion. Considering both assets and liabilities, Montana’s pension funding ratio is 67.3%, the 20th lowest in the country.

According to 2021 estimates from the Bureau of Labor Statistics, the Montana state government employs some 27,800 people, or 5.6% of the total private and public sector workforce in the state.

It is important to note that 2020 is the most recent year for which comprehensive state level data is available and that the recent market downturn has all but erased much of the financial gains states have made in recent years. Still, while markets are always susceptible to turmoil, improved policies have gone a long way to improving pension funding in much of the country.

All state pension data in this story was compiled by the Pew Charitable Trusts using comprehensive annual financial reports from each state.

By Brett Rowland, The Center Square

The Federal Trade Commission proposed a ban on noncompete clauses which the FTC said were often exploitative and suppressed wages and competition.

“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” Chair Lina Khan said in a statement. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.”

The federal agency said ending the practice of noncompete clauses could increase wages by almost $300 billion a year and expand career opportunities for about 30 million Americans. The FTC is seeking public comment on the proposed rule. The rule was based on a preliminary finding that such clauses constitute an unfair method of competition.

“Research shows that employers’ use of noncompetes to restrict workers’ mobility significantly suppresses workers’ wages – even for those not subject to noncompetes, or subject to noncompetes that are unenforceable under state law,” said Elizabeth Wilkins, director of the Office of Policy Planning. “The proposed rule would ensure that employers can’t exploit their outsized bargaining power to limit workers’ opportunities and stifle competition.”

The FTC’s proposed rule would make it illegal for an employer to:

* enter into or attempt to enter into a noncompete with a worker;

* maintain a noncompete with a worker; or

* represent to a worker, under certain circumstances, that the worker is subject to a noncompete.

The proposed rule would apply to independent contractors and those who work for an employer, paid or unpaid. It also would require employers to rescind existing noncompetes and inform workers that they are no longer in effect.

Montana saw another year of record business registrations in 2022.

According to the Montana Secretary of State’s Office, roughly 53,000 new businesses were registered after registration fees were cut in half and other fees were eliminated entirely.

The Montana Secretary of State’s Office released the following information:

Montana Secretary of State Christi Jacobsen announced another record number of new businesses were registered in Montana in 2022. Secretary Jacobsen made the announcement during the Montana Chamber of Commerce Business Days at the Capitol at the beginning of the month.

“The pandemic has changed Montana: more people, different people, more expensive housing. In economics jargon, demand for Montana increased,” proclaims the Bureau of Business and Economic Research, (BBER), in explaining the issues that will be discussed at the 2023 Montana Economic Seminar in Billings on January 31.  Director of the BBER, located at the University of Montana, Dr. Patrick Barkey, says that the forces driving this change are likely to persist.  “As such, Montanans must grapple with our response — particularly, how much to increase supply to meet demand.”

The way Montanans act to increase supply affects how increased demand manifests itself in Montana. Neither more people nor higher prices are strictly good or bad. Each option comes with different tradeoffs.

The half-day seminar will be held in eight other Montana cities. In Billings it will be held at the Northern Hotel, 8 am to 1 pm. Registration is required at the BBER website.

Bryce Ward, founder of ABMJ Consulting, a firm that provides economic analysis, strategic advice, conflict resolution, etc., will be a speaker at the event. He has a PhD in economics from Harvard University and BAs in economics and history from the University of Oregon. He has expertise in urban and regional economics, labor economics, health economics, public finance, social economics, real estate economics, environmental and natural resource economics, and statistics/econometrics.