Montana State Legislature

By Daniel Brooks, Billings Chamber of Commerce

Today is legislative day 37 of a 90-day session, placing us within act two of this three-act show. The story’s characters have been introduced and now move into the confrontation stage. We can expect to see far fewer bills moved with unanimous votes as partisan priorities divide the legislature.

Although the session seemed to be moving quickly already, the pace is expected to pick up as deadlines for bill introduction draw near. Typically committees will hear 3-4 bills. Feb. 24 was the last day for lawmakers to introduce General Bills. With only 970 bills introduced so far, out of 3,354 bill draft requests, many will never get a hearing before the end of the session—hundreds of idle Chekhov guns that never served their purpose.

One bill we hope to see pass before the credits roll on this legislative session is House Bill 340, sponsored by Speaker of the House Wylie Galt. The bill revises the Montana Economic Development Industry Advancement (MEDIA) Act, passed with bipartisan support in 2019, which provides tax credits for film production in Montana. Revisions proposed by HB 340 include allowing more expenditures to qualify for the credit and removing the state’s $10 million cap on credits issued.

According to a June 2020 study, the MEDIA Act resulted in $47.6 million in total economic impact in Montana by incentivizing film production in the state. With all that we’ve got to offer—the old west, mountains, railroads, open highways, rivers that run through it, and of course THE BIG SKY—adding tax credits is like making an offer film productions can’t refuse. Just last year the television series Yellowstone moved filming exclusively to Montana, leaving the crew to contemplate, “I don’t think we’re in Utah anymore,”…probably.

Before you start thinking this won’t benefit Billings, I’ll point out that nobody puts Billings in a corner. The film We Burn Like This, currently in post-production was shot in Billings and Butte. And the study mentioned above shows Yellowstone County hasn’t been left out of the mix, with multiple film and television productions in 2019.

Besides the exposure and tourism draw, additional film production in Montana means jobs. And not just for those in showbiz. Small businesses are tapped to provide materials, equipment, and services. The study also identifies benefits to real estate, healthcare, and other professional sectors.

Governor Gianforte signed his first executive order, establishing the Red Tape Relief Task Force. Led by Lt. Governor Kristen Juras, the group is tasked with reviewing state agencies and identifying regulations that are excessive, outdated, and unnecessary and that disproportionately impact small business.

Looking at some bills:

House Bill 340

Revise the MEDIA Act film tax credits

Speaker Wylie Galt (R), Martinsdale

Chamber Supports

Expanding the MEDIA Act tax credits and allowing more expenditures to qualify for the credit will build on the success our state has already realized through the 2019 legislation. Bringing more film production to the state means more jobs in a creative, high-skill industry, more work for small businesses that provide resources and services for film productions, and more exposure to our state, attracting more people interested in experiencing firsthand the splendor of Montana. The bill is likely to see strong support from the business community who are already supporters of the MT Film Coalition. In House Committee.

House Bill 424

Revise individual income tax laws

Rep. Emma Kerr-Carpenter (D)Billings

Chamber Opposes

This bill revises the individual income tax by adding a top marginal tax rate of 8.9% for income in excess of $500,000. It also increases the earned income tax credit (EITC). Earlier this session we expressed our support for the Governor’s tax bills SB 159 and SB 182, to reduce individual income taxes and put in place conditions to lower those taxes in the future when the economy is doing well. We believe it’s important, especially as we face a long road to economic recovery, that taxes on small business be lowered, reducing the cost of doing business in our state. As of this writing there is no fiscal note for the bill. In House Taxation Committee.

House Bill 43

Expand practice of telemedicine

Rep. Rhonda Knudsen (R)Culbertson

Chamber Supports

Despite all of the negative that has come from the Covid pandemic, a silver lining may be the advancement and expansion of telehealth. While we appreciate the draw of the Billings healthcare community, bringing Montanans from across the state who will shop with our businesses during their stay, we recognize the value to our state when people have better access to care. This bill ensures state health plans, group benefit plans, and student health plans include coverage for telehealth and defines telehealth as not dependent on location (i.e. predetermined sites). On February 17th, the bill will be heard in Senate Public Health, Welfare, and Safety.

House Bill 372

Eliminate business equipment tax

Rep. Brandon Ler (R)Savage

Chamber Monitoring

This bill would eliminate the business equipment tax in Montana. While we thank the sponsor for his efforts on this worthy cause, we believe a more measured approach, offered in the Governor’s and Rep. Kassmier’s HB 303, is more appropriate considering our economic circumstance. A fiscal note for HB 372 is not yet available, but we can assume the reduction to the general fund, local governments, and others will be substantial. We’re optimistic that Montana will have realized a full recovery by the next legislative session, at which point we can discuss further reductions of the business equipment tax. For now we’ll monitor HB 372.

Sheriff Mike Linder is sending a letter to the state Department of Corrections (DOC) to inform them that the actual cost to Yellowstone County to house a prisoner is $77.22 a day – not the $69.31 that the Montana State Legislature set as a cap of what the state will pay. The real cost is actually higher than that, said Linder, but the state will not allow capital costs to be calculated into the per diem rate.

The state is asking the county for a contract to confirm the rate and Yellowstone County officials are not too sure what such a contract would really do. Some counties have refused to enter into a contract, said Linder. Others, such as Gallatin County, refuse to accept state prisoners.

Deputy County Attorney Kevin Gillen said that such a contract is called “a contract of adhesion.” “You take it or you leave it,” he said.

In a discussion, on Monday, county officials concluded that they will accept a contract with the state but the bills that they send to the state will include the real per diem cost of housing prisoners, even though they know they will only get paid the lower sum. This way there will be a record of what it is really costing, they concluded. The finance department estimated that the county stands to lose about $45,000 annually through the lower rate, based upon 2017 figures.

The state’s rate of $69.31 is actually a new rate – 31 cents higher than what the state has been paying.

Four years ago the state was paying $76.94 a day, but during a session in which the budget was very tight, legislators arbitrarily lowered the rate, and now they seem to like it there.

The good news, said Linder, is it will go up another 30 cents a day, in another year.

The federal government pays Yellowstone County a per diem rate of $97. When Yellowstone County holds prisoners for other counties those counties pay $100 a day, which includes the capital costs associated with building and maintaining the Yellowstone County Detention Facility. The City of Billings also pays $100 a day if the prisoner being held is being held on a violation of city ordinances rather than state laws – there are usually few of those. The city pays nothing on inmates charged with violations of state law since the city is part of Yellowstone County and taxpayers do pay public safety mill levies.

Gillen commented that what the DOC is really doing is “parking people in jail” because the state doesn’t have the capacity. He suggested that, while accepting the lower per diem rate, the county can insist that they get inmates out of the county jail in a more timely fashion.

No county is required to accept prisoners from the state. The prisoners are usually people who were county prisoners until they were prosecuted and sentenced in court, at which point they become “state prisoners.”

The number of prisoners held at the county by the state have declined, but said Gillen the trend is that they are released from state custody sooner without probation, which leaves them free to return and “re-offend”, at which point they again become the county’s problem.

On any given day the county holds between 40 and 50 state prisoners.

Update on State Legislature

State Shirks on Jail Rates

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