HomeMy WebLinkAbout12-12-16 CC Mtg - A1. 2017 Legislative Session Agenda
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
SUBJECT: 2017 Legislative Session Agenda MEETING DATE: December 12, 2016
AGENDA ITEM TYPE: Action
RECOMMENDATION: Adopt an agenda for the 2017 Legislative Session
SUGGESTED MOTION: I move to adopt the attached 2017 City of Bozeman Legislative Agenda
BACKGROUND: For the 2017 Legislative session, the City of Bozeman entered into a
contract with Aimee Grmoljez to represent the City as a Lobbyist. I will be working directly
with Aimee throughout the session which begins January 2nd and runs until April 20. Attached is a proposed Legislative Agenda we will utilize to focus our efforts.
Our focus needs to be straight forward and simple. We want to reduce property taxes and
increase our investments in infrastructure. Because Bozeman is both a regional trade center and
hosts over 4,000,000 tourists annually, these two goals can be accomplished by shifting our tax burden from property owners to those who use the services provided by the City. Most notably these visitors use our transportation and public safety services never paying one cent directly for
them.
The proposed legislative agenda includes the Montana League of Cities and Towns (MLCT) Legislative Resolutions and the Montana Infrastructure Coalition’s (MIC) Legislative Agendas (see attached). As a Board Member of MLCT and a voting member of the Infrastructure
Coalition, I have been actively involved in creating both of their legislative priorities.
In addition, each session hundreds of bills are introduced effecting local government. Dozens of
those bills require city staff to be both proactive and reactive to their effects. I will be deciding
what our responses are and who will testify. Along with our adopted priorities, I will use each of
the City Commission’s adopted plans and policies (i.e. Growth Policy, IWRP, PROST,
Transportation plan etc.) as a guide to make decisions on supporting or opposing legislation
throughout the session. Rarely, will we be utilizing our Lobbyist other than to advice in this
capacity. I want to keep her focus on our two primary goals of lowering property taxes and
increasing our investments in infrastructure.
7
Therefore, I am asking the City Commission to adopt the attached City of Bozeman Legislative
Agenda. If successful, this agenda will be transformative for Bozeman, decreasing taxes and
assessments to help our property owners afford to live and operate businesses in the City while
increasing investments in critical infrastructure necessary to support our vibrant growing economy.
UNRESOLVED ISSUES: None.
ALTERNATIVES: As suggested by the City Commission
FISCAL EFFECTS: Unknown at this time.
Attachments:
Proposed City of Bozeman Legislative Agenda
2017 MLCT Legislative Agenda 2017 MIC Legislative Agenda
Report compiled on:
12/4/2016
8
2017 City of Bozeman Legislative Agenda
December 6, 2016
The City of Bozeman is focused on legislative changes that are transformative for Bozeman. We are
committed to lowering the tax burden on our property owners in order for Bozeman to remain
affordable while also increasing our investments in critical infrastructure to support our vibrant local
economy. Both goals can be accomplished through “user pay” taxes that require visitors and tourist to
pay directly for the services they use. Therefore the City Commission adopts the following legislative
priorities for the 2017 session.
1. Support legislation to lower the tax burden on Bozeman residents and businesses
2. Support legislation that increases investments in infrastructure critical to supporting our vibrant
economy
3. Support generally, the attached Montana League of Cities and Towns’ adopted 17 Legislative
Resolutions.
4. Support generally, the attached Infrastructure Coalition’s Legislative Agenda.
9
Legislative Resolution 2017-1 GENERAL
PRINCIPLES
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
The cities and towns of Montana provide a healthy community with clean water, a sanitary environment,
public safety, transportation, and recreational opportunities. These vibrant municipalities provide a safe and
inviting environment that fosters the primary basis for the Montana economy. To provide quality municipal
services to their residents and visitors, municipalities must wisely and efficiently use their limited financial
resources. The League of Cities and Towns is committed to preserving and promoting these municipal
qualities.
ACTION
For the 2017 Legislative Session, the League will stand by the following principles of fair, affordable and
effective local government:
1. Preservation of an equitable property taxation system and the entitlement share payment to municipalities, while
pursuing authority for municipalities to seek and develop new sources of revenue to fund essential local services.
2. Promote diversification of the local government finance structure, particularly to develop supplements and
alternatives to property tax revenue.
3. Encourage the maintenance and expansion of state grant, loan and investment programs to fund infrastructure
capital improvements to supplement the use of local funds.
4. Advocate that new legal mandates imposed upon municipalities have an identified source of independent funding
and are not an unfunded mandate imposed upon municipalities.
5. Effective planning and development policies that encourages managed growth of municipalities for the promotion
of the more efficient delivery of clean water, treatment and disposal of wastewater and solid waste, protect
municipal water rights, interconnectivity of transportation systems, enhanced fire, police and public safety
protection, improved recreation opportunities and other municipal services.
6. Opposition to any measure that limits or diminishes municipal authority as provided by the letter and spirit of the
Local Government Article of the 1972 Montana Constitution.
10
7. Recognition of the contribution of cities and towns to the history and culture of our state and a better
understanding of the fact that all public policy should begin and end with those special places a majority of
Montanans call home.
11
Resolution #2016-2 ENTITLEMENT SHARE
PROGRAM
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Section 15-1-121, MCA, contains the formula for calculating the annual growth factor that is applied to
Entitlement Share Payments. The Legislative changes in 2011 based the growth factor on the collection of
gambling, motor vehicle, beer, liquor and financial institutions tax revenues over the most recent three-year
period. It also includes a factor for personal and corporate income tax collections.
During the 2013 Session, the Legislature amended 15-1-121, MCA, to provide that entitlement payments are
intended to provide a secure and predictable stream of revenue with a growth adjustment tied to state
collections but cannot go below a floor of zero.
Because the entitlement share payment funds have had healthy growth and provide increased payments to the
local governments, there is a temptation to use part of these funds for state needs. Any diversion of entitlement
share payment funds would diminish the future growth capacity of the fund and deprive local governments of
the funds historically promised.
ACTION
The League will oppose legislation to diminish the Entitlement Share Payments program to ensure its
continuation and application of growth factor adjustments.
12
Resolution #2016-3 REMOVING CAP ON
INCREASES IN MILL LEVY
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Cities and towns are only authorized to impose a mill levy that is sufficient to generate the amount of property
taxes actually assessed in the prior year plus one-half of the average rate of inflation for the prior 3
years. Cities and towns cannot financially survive with this limitation on the mill levy to one-half of a rolling
3 year average of the rate of inflation. Expenses incurred by cities and towns are not limited to any similar
cap.
ACTION
The League will strategically sponsor legislation to remove the restrictions on the cities’ and towns’ mill levy
authority currently imposed under Title 15, chapter 10, part 4, MCA.
13
Resolution #2016-4 LAND USE AND
ENVIRONMENTAL REGULATION
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Cities and towns have worked many years to protect Montana’s land and water resources through wise
community development policies that emphasize centralized water and wastewater systems, efficient delivery
of services to concentrated populations and compliance with fair and affordable environmental
standards. Now, most new development in Montana is sprawling beyond municipal boundaries, threatening
our legacy of open space and clean water. Municipalities are dedicated to working with state and federal
agencies to establish growth and land use policies that recognize property rights while preserving the natural
assets of Montana.
ACTION
MLCT will support bills to:
1. Encourage the use of community water, wastewater and stormwater systems to protect environmental quality and
assure that cities and towns are not obligated for a disproportionate share of the cost of complying with Numeric
Nutrient Standards, MS4 and other state or federal regulatory standards.
2. Promote environmentally responsible energy development and conservation through grants, loans, and technical
assistance and education programs.
3. Allow cities and towns authority under the energy and building codes to promote conservation.
4. Expand authority of cities and towns to use tax increment districts and tax abatements for opportunities as part of
an effective economic development strategy.
MLCT will oppose bills to:
1. Restrict the annexation, zoning, planning and subdivision review authority of cities and towns or in any other way
interfere with established community development practices.
2. Restrict the use of Special Districts but will consider measures to simplify protest procedures for property
owners.
14
3. Limit the effectiveness of the options under the tax increment district statutes but will consider measures that
refines definition of “public purpose” for expenditure limitation purposes.
15
Resolution #2016-5 LOCAL GOVERNMENT
INFRASTRUCTURE GRANT PROGRAM
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Montana has experienced significant growth impacts related to infrastructure and public safety as a result of
rapid population growth in some part of the state. Most Montanans welcome the economic opportunities
connected to development, but some Montana municipalities that have had no or slow growth in the past do
not have the resources and support necessary to proactively plan for and address the infrastructure and public
safety needs of the growing population. Also, the infrastructure belonging to Montana municipalities, water
and wastewater systems, streets and public facilities, is aging and in many cases has outlived its useful and
functional life. For Montana cities and towns to attract healthy, responsible economic growth, the ability to
provide quality essential services means the infrastructure should be in good condition and using modern
technology.
The MLCT has joined the Montana Infrastructure Coalition (“MIC”) and will work with the MIC to establish
infrastructure priorities on a multi-session approach. We need to work to change the structure of the way
infrastructure financing occurs in Montana on into the future.
In 2015, a bipartisan bill to provide funding for state-wide infrastructure, including municipalities, narrowly
failed passage by one vote. The infrastructure bill would have funded local projects through grants and loans as
well as university buildings and other state projects. Much of the public infrastructure, whether owned by the
state or local governments, suffers from deferred maintenance and every year worsens the deterioration of the
infrastructure. An infrastructure grant or loan program will provide Montana communities with additional
resources and support to help plan and address needed infrastructure expansion and replacement and the public
safety needs of municipalities.
ACTION
MLCT will support and promote a local governmental infrastructure grant and loan program, including public
safety infrastructure.
16
Resolution #2016-6 GASOLINE AND SPECIAL
FUEL TAX AND LOCAL OPTION MOTOR FUEL
EXCISE TAX
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
The gasoline and special fuel tax is a state tax of 27 cents per gallon of gasoline distributed within the state and
27 ¾ cents per gallon of special fuel. (Section 15-70-403, MCA.) Of the total amount collected from these and
other gas taxes, $16,766,000 is statutorily appropriated to counties, incorporated municipalities and
consolidated city-county governments for construction, maintenance and reconstruction of roads and streets in
each entity. (Section 15-70-101, MCA) The amount of these taxes that are retained by the State can be used for
the State’s match for federal highway funding. The vast majority of highways, streets and roads in Montana are
suffering from decay and in need of major maintenance, reconstruction or replacement. Increasing the
Gasoline and Special Fuel Tax would generate additional money for the State to use as match for federal
highway funding and provide additional money to municipalities, consolidated city-county governments and
counties.
In addition to the allocation of gasoline and special fuel tax money to counties, municipalities and consolidated
city-county governments, a county through the vote of electorate may imposed a local option motor fuel excise
tax. (Section 7-14-301, MCA.) This additional tax may not exceed 2 cents per gallon. The revenue from this
local option motor fuel tax is allocated between the county and all municipalities within the county according
to a distribution formula. This local option fuel tax can only be initiated by the county. Municipalities cannot
independently impose any local option motor fuel excise tax. The revenue from the local option motor fuel tax
can only be used construction, reconstruction, maintenance, and repair of public streets and roads. (Section 7-
14-302, MCA)
ACTION
MLCT will support:
1. Increasing the gasoline and special fuel tax to provide additional revenue for match with the federal highway
funding and for additional revenue for municipalities, consolidated city-county entities and counties.
2. Allowing municipalities the independent authority to impose a local option motor fuel excise tax within their
respective jurisdictions.
17
Resolution #2016-7 MS4 AND STORMWATER
QUALITY
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
More cities in Montana are being classified as Municipal Separate Storm Sewer (“MS4”) cities for purposes of
storm water regulations under EPA and MTDEQ. Under the federal law, MS4 cities are required to use best
management practices to reduce pollution from storm water runoff. MTDEQ is responsible for issuing general
permits to the MS4 cities. In past years MTDEQ was more aggressive than the EPA BMP standards and
required additional burdens such as monitoring and sampling of water quality in storm water runoff. Though
this initially only affected the larger Montana cities, the history of the MS4 designation has been to reach down
into lower populated cities. Originally in 1990, only cities with populations over 100,000 were affected. By
1999, it potentially affected municipalities with 1,000 people or more. The MLCT and affected cities agree
with protecting water quality and using BMPs for storm water management. What we do not agree with is
having to do sampling and monitoring that is of no benefit. Sampling for the sake of sampling is an idle act.
The concern is that MTDEQ may interpret “state waters” (75-5-104(34), MCA) to include storm water
retention and detention ponds, which are the BMP’s means for trapping pollutants before reaching bona fide
state waters. This interpretation would require retention and detention ponds, constructed as BMPs for storm
water, to have water quality compliance similar to lakes and rivers.
Such an interpretation has resulted in difficulties conducting water main flushing, fire hydrant testing, water
main repair and maintenance (non-storm water discharges). That interpretation combined with the first 1/2″
treatment requirement in the current discharge permit has also raised questions about whether it is permissible
for storm water leaving a site to enter the MS4 at all, and thus detention or retention ponds and basins, before
the first 1/2″ of water is treated.
MTDEQ has established working groups with the MS4 cities to reach a mutually satisfactory resolution on
these issues. This process is still on-going and will take more time and work to resolve the differences.
ACTION
MLCT extends its appreciation to MTDEQ for its efforts having a working group to work toward resolution of BMP requirements for mitigation for storm water quality. The MLCT will consult with and work with DEQ if
legislative changes may be needed for effective implementation of BMPs in a cost-effective and reasonable
manner. The MLCT will monitor legislation and regulatory action dealing with storm water quality and MS4
18
Resolution #2016-8 FUNDING
FIREFIGHTERS’ PENSION FUND
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Under Section 19-18-503, MCA, cities and towns are required to soundly fund disability and pension funds for
firefighters. The fund is deemed soundly funded if either the assets in the fund are at least 0.21% but not more
than 0.52% of total assessed value of taxable property, or at a value determined by an actuarial valuation. The
cities and towns are allowed to levy an annual tax to keep the fund soundly funded under Section 19-18-504,
MCA; however, that special tax levy is restricted by the mill caps in Section 15-10-420, MCA, of ½ of the
average rate of inflation for the prior 3 years. The current funding requirement based upon a percentage of total
assessed value of taxable property can result in requiring a municipality to have to increase taxes to an
unrealistic, unnecessary and expensive amount in order to adequately fund a reserve for disability and pensions
for firefighters. This was especially exacerbated by major changes during the 2015 Session in the property tax
assessment laws that reduced taxable valuation but did not affect the total assessed value. These changes made
the percentages of total assessed value arbitrary with no precise nexus to the actual liability exposure. In some
cases municipalities were legally unable to levy an amount equal to 0.21% of total assessed value and to do so
would unnecessarily overfund the disability and pension reserve. The Montana Department of Revenue is
drafting legislation that would make the funding requirement for a disability and pension fund reserve be 3 to 5
times the actual liability. Using this formula would set the reserve fund at a realistic amount based upon
liability of the fund.
ACTION
MLCT will sponsor legislation that changes the funding requirement for disability and pension fund reserves
to be a realistic multiplier of actual liability exposure.
regulations.
19
Resolution #2016-9 COMPENSATION
FOR RETIREMENT
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
The public employee retirement system has suffered in the past from not being actuarially sound. Some public
employee bargaining groups want to include factors such as overtime, insurance premium payments and other
special benefits as part of the “total compensation” used in determining retirement benefits upon retirement.
Adding these other types of economic benefits as compensation for retirement purposes increases the cost to
the public employer for paying the employer portion of the retirement withholding.
Additionally, adding new peripheral benefit amounts to total compensation puts a strain on the public
retirement system since the more recent retirees will not have contributed toward the higher benefit for most of
their careers.
ACTION
The League will oppose legislation adding employee benefits and overtime as part of the compensation for
purposes of determining retirement benefits.
20
Resolution #2016-12 LOCAL LODGING FEE
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Some cities and towns experience unexpected demands for increased municipal services. Especially when
these impacts are unpredicted, the impacted municipality cannot immediately afford the increased costs to
enlarge their infrastructure and provide for expanding municipal services. New growth eventually generates
increased property tax revenue but it is not immediate and impacted municipalities need a quicker means for
new revenue. A local lodging fee based upon overnight lodging facilities, temporary housing and
campgrounds would fill that need for more readily available extra revenue.
ACTION
MLCT will support a locally created and imposed lodging fee on consumers for overnight lodging, temporary
housing and campgrounds.
21
Resolution #2016-14 ABANDONED
PROPERTY
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Local law enforcement agencies, police and sheriff departments, receive personal property that is evidence in
criminal cases, has been abandoned by the owner or is recovered stolen property that the owner fails to claim.
Since 1997 Montana does not have a statutory process for disposal of abandoned personal property that is
being held by law enforcement agencies for the owners to claim but who fail to do so. Many police
departments store bicycles and other found or recovered property that must be held presumably until the true
owner comes to claim it. There is no statutory standard of when this property may be presumed to be
abandoned and the local government entity may dispose of the property either through sale, donation to
charitable cause or destruction. Local governments need to have legal clarity and authority for the disposition
of abandoned property.
ACTION
MLCT will sponsor legislation creating a presumptive abandonment time period and establishing a process for
the disposal of personal property local governments are holding as unclaimed property for the owners.
22
Resolution #2016-15 LOCAL GOVERNMENT
STANDING COMMITTEE
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
With the passage of SB 11 in 2009, the Legislature created six permanent interim committees, each responsible
for the administrative rule review, program review, and monitoring for specific executive branch
agencies. (Section 5-5-202(2), MCA.) Although local government was not specifically identified as a subject
matter for any of the six new interim committees, two interim studies dealt specifically with local government
issues: HJR 29 (a review of state laws pertaining to local governments and officials); and HJR 38 ( a study of
salary and employment issues of juvenile probation officers. The Legislative Services Division assigned these
interim studies to the Education Interim Committee, and in the 2001 session, the Legislature amended the
statutes to reflect the dual education and local government role of the committee. (Chapter 210, Laws 2001;
Section 5-5-224(2). The two divergent subject matters covered by the Education and Local Government
Interim Committee has made it difficult to create long-term collaborative relationships between the state and
local governments envisioned by the originating statute. The breadth and complexity of local government
issues warrants the creation of a separate and permanent interim committee dedicated solely to discussing and
coordinating local government issues.
ACTION
MLCT will sponsor legislation creating a separate and permanent local government interim committee to study
local government issues.
23
Resolution #2016-16 RECOUP LAW
ENFORCEMENT TRAINING-RELATED
EXPENSES
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
In 1999, the Legislature passed HB 192, codified at Section 7-32-4139, MCA, which authorized prorated
reimbursement of training costs if minimum 3 year service agreement not fulfilled. The statute defined
“training costs” as including the “cost of the officer’s basic course training, salary, mileage, and expenses paid
to the officer while the officer is in training.”
In 2005, in response to a bill request to provide similar language for counties, the Legislature repealed Section
7-32-4139, MCA (Chapter 198, Laws 2005 (HB 743)) and replaced it with new language in Section 7-1-4105,
MCA that acknowledged local governments’ constitutional contract authority to enter into any contract
necessary for the exercise of its power, “including but not limited to a contract for reimbursement that may
require that the local government be reimbursed for the cost of basic course training if an employee leaves
employment before completing a reasonable period of service. While HB 743 specifically identified the cost
of basic course training, that cost is illustrative and the preamble and other language of the bill supports the
broad constitutional authority of cities to include other costs in an agreement for reimbursement.
The constitutional contract authority granted to cities is not absolute. A municipality must comply with state
and federal employment and wages laws, which include the requirement to pay the applicable minimum hourly
wage, overtime compensation, and withhold applicable taxes, as well as employer contributions to
unemployment insurance and worker’s compensation coverage. Subject to the requirement of collective
bargaining (City of Lewistown v. Lloyd, 2006 MT 168), a municipality may be able to recoup actual academy
training expenses, wages in excess of the applicable minimum wage, taxes paid on those excess wages, health
insurance premiums, retirement benefits, and travel expenses when a police officer fails to complete an agreed
upon length of employment with the municipality.
ACTION
MLCT will create a template reimbursement document for municipalities to use in collective bargaining in
order to recoup the maximum lawful amount possible of training-related expenses when an officer does not
complete minimum employment periods.
24
Resolution #2016-17 LOCAL OPTION TAX
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Municipal fiscal authority in Montana is limited to property taxes, with a small exception for certain smaller
communities with a population of less than 5,500 where the majority of local employment is related to
businesses catering to the recreational and personal needs of tourist visitors. The existing state resort tax statute
imposes strict limitations on local resort taxes: the tax must be approved by the qualified electors of the
municipality; the tax rate ceiling is 3%; the tax may only be imposed on lodging facilities, restaurants, and
bars; and no less than 5% of the revenues received from the tax must be used to reduce property taxes within
the municipality. Currently, only four municipalities in Montana qualify under the statutory definition of
“resort community” and have enacted a resort tax approved by their voters (Whitefish, Red Lodge, Virginia
City, and West Yellowstone). These communities have access to an additional source of funding for “any
activity, undertaking, or administrative service that the municipality is authorized by law to perform,”
including infrastructure, public services, and the like. The resort tax provides an additional flexible source of
revenue that allows local residents to decide locally whether to impose additional taxes on luxury items and
local business services that serve primarily visiting tourists.
ACTION
The League will support legislation to allow all Montana municipalities and their voters the authority to enact a
local option tax to help fund local infrastructure projects and other local services.
25
Resolution #2016-18 CLOSURE OF
COLSTRIP UNITS 1 AND 2
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
With the pending closure of Colstrip Units 1 and 2, the City of Colstrip is facing an abrupt loss in local jobs
and property taxes. The closure of Colstrip Units 1 and 2 requires planning and funding to safely
decommission the units, address the needs of Montana and out-of-state energy consumers, and help displaced
workers and the communities directly impacted by the closure of the units. The MLCT recognizes the
important role the City of Colstrip has historically played in providing energy and revenue to the entire state.
ACTION
The MLCT supports efforts to provide financial support and economic diversification to the City of Colstrip to
help create sustainable employment opportunities and protect local tax revenues as a result of the closure of
Colstrip Units 1 and 2.
26
Resolution #2016-20 SUPPORT FOR PUBLIC
SAFETY EMPLOYEES AND RESOURCES
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Montana cities and towns provide critical public safety services to the majority of Montana residents.
Emergency response, law enforcement, and fire protection are an important component to creating and
maintaining thriving, prosperous communities. The Montana League of Cities and Towns (MLCT) supports
efforts to ensure public safety personnel, services, equipment, and programs are adequately funded and the
work of these local government employees is acknowledged and respected by their elected officials and
citizens.
ACTION
The MLCT acknowledges the need for adequate equipment, training, and funding for municipal emergency
response, law enforcement, and fire protection services, and expresses its appreciation for the work of our local
police officers, firefighters, emergency responders, and other public safety employees.
27
Resolution #2016-21 SUPPORT FOR
MILITARY OPERATIONS IN
MONTANA
By Nick Haswell on October 26, 2016 in 2017 Legislative Resolutions
BACKGROUND
Federal military operations in Montana are a critical source of economic health in our communities. The
Montana National Guard provides more than $182 million in economic impetus to the State of Montana, and
the total federal economic impetus of the Montana Department of Military Affairs and the National Guard to
the State of Montana is over $196 million. Malmstrom Air Force Base provides more than $610 million in
economic impetus to the State of Montana, airmen stationed at Malmstrom own an estimated 1,116 homes in
Montana, military construction and service contracts provide more than $34 million to local contractors, the
base spends more than $10.4 million for utilities, and Malmstrom services more than 7,000 miles of roads in
Montana, which benefits Montana’s commerce. Some other military assets in Montana include Fort Harrison,
Limestone Training Range, Hayes Military Operations Area, Malmstrom Air Force Base, Powder River
Training Range and various Montana Army and Air National Guard units. From defense contracts, mutual aid
agreements, to the revenue generated by servicing military personnel, Montana’s military has tremendous
statewide impact.
Federal base realignment and closure activities and other cost-cutting measures put current military missions
and assets in Montana and Montana’s economic well-being at risk. In addition, Montana communities are
missing strategic opportunities for defense industry growth statewide.
ACTION
The MLCT will support efforts to help protect existing military assets in Montana, collaboratively address
national cuts to any military assets in Montana, and develop opportunities for defense industry growth.
28
Voting Members Present:
Webb Brown (Montana Chamber), Tim Burton (MLCT), Jason Rittal (MEDA/Fallon County), Jon
Metropoulos (MAOGCC), Cary Hegreberg (MCA), Jay Skoog (ACEC-MT), Chris Kukulski (City of
Bozeman), Shane Gorder (Richland County), Adam Gartner (Dawson County), Ron Alles (City of Helena),
Tina Volek (City of Billings), Heidi Jensen (City of Laurel), Danette Gleason (Butte-Silver Bow), Shari
Eslinger (AIA/ASCE)
Darryl James (Executive Director-non-voting).
Formal Actions:
Elimination of Tools:
Based on input received at the All Member Meeting held on October 21, 2016, the Board recommended
elimination of the following tools from consideration for the 2017 legislative session:
• Vehicle Miles Traveled (VMT) Tax
• Income Tax
• Toll Roads
• Statewide Sales Tax
• Bed Tax
Following brief discussion of each tool, the recommendation to eliminate from consideration was passed
without opposition by the Voting Members on the first four tools in the list above.
The Bed Tax was reserved for future discussion as a viable tool if other, preferred options failed to gain
traction in the Legislature.
Any of these tools may be revived upon a vote of the membership at any time.
Establishment of the Legislative Package:
Based on input received at the All Member Meeting held on October 21, 2016, the Board recommended
detailed consideration of a fuel tax increase, a local option tourism tax, capping the Coal Trust and
establishing new bonding capacity, drafting enabling legislation for public-private partnerships (P3s),
making adjustments to TSEP, and lending support to third-party bonding bills. Following is a brief recap
of those deliberations.
Fuel Tax
The Coalition has repeatedly established that fully leveraging all available federal highway dollars is a
top priority, thus one of the fist goals for a fuel tax increase is to ensure that the Montana Department
of Transportation (MDT) has adequate funding to meet their state match requirement.
Coalition research indicates that MDT currently needs approximately $20 million in additional
funds. With the understanding that $0.01 in fuel tax (both gasoline and diesel) will raise
approximately $8 million, the minimum that would be raised and allocated to MDT would be
$0.04 per gallon to allow for inevitable growth in agency expenditures.
Meeting Minutes
Voting Member Meeting
November 14, 2016
10:00 a.m. – 2:00 p.m.
Bozeman Area Chamber (Bozeman)
29
Meeting Minutes – November 14, 2016
Voting Member Meeting (Bozeman Area Chamber - Bozeman)
Page 2
Members discussed the fact that the city/county share of fuel tax receipts has been frozen at
just over $16 million. Counties have not seen an increase in allocation of fuel tax revenues from
the state since 1983, and cities have not been adjusted since 1993. Given the current condition
of local roadways, Members discussed allocating the balance of a $0.10 fuel tax increase to
cities and counties through the existing funding formula.
Without opposition, Voting Members passed a motion to pursue a $0.10 per gallon fuel tax
increase, with the following details to be determined:
Allocation between MDT and City/County governments: Depending upon further
research and internal discussions, the split will be either 50-50, or 40-60 in favor of
city/county allocation. The additional revenue forecast will be added on top of the
existing revenue to establish new percentage allocations of overall fuel tax receipts,
which would then be established in statute.
At a finer level of detail, Members discussed the distribution formula between cities and
counties. The research team will develop scenarios that would distribute monies based
on an allocation of higher amounts to locations that collect greater tax dollars (i.e.: those
that experience higher levels of traffic on their jurisdictional roadways), and an
allocation of higher amounts to rural areas that experience less traffic, but that do not
have the population/revenue base to support the local/regional infrastructure
necessary to participate in the statewide economy (the formula may mirror the federal
highways approach to providing more funds per capita to rural areas than densely
populated urban areas based on ability to build and maintain essential roadway
networks).
Of the amount allocated to city/county governments, the contractors have requested that at
least 70 percent of the new total (the majority of the new revenue) be subject to competitive bid.
This request was made to ensure that local governments did not initiate or increase an ability to
compete with private contractors for infrastructure work.
During numerous discussions within and outside of the Coalition membership, taxpayers have
requested consideration of an adjustment of the vehicle registration fees for electric and hybrid
vehicles that would compensate for their limited contribution to fuel tax revenues. The Coalition
will research other revenue models and develop a methodology for assessing a “user fee” for
electric and hybrid vehicles in Montana.
Local Option Tourism Tax
Without opposition, the Voting Membership approved modifications to the existing Resort Tax
that would allow additional cities, towns and counties to apply the tax with voter approval in
the affected area. The Coalition will develop modifications for further review, but will ensure
that the following conditions are met:
Local voter approval required
Mandatory sunset with ability to request voter re-approval
Limited range of items eligible for taxation (luxury items)
Mandatory allocation of five (5) percent minimum of revenues allocated to property
tax relief within the affected area
30
Meeting Minutes – November 14, 2016
Voting Member Meeting (Bozeman Area Chamber - Bozeman)
Page 3
Local government commitment to invest in infrastructure
Enhancing Infrastructure Assistance through the Coal Tax Trust Fund:
This concept was developed organically through the course of several conversations beginning
with the October 21 workshop and extending through subsequent Board discussions. The
notion is that capping the Trust does no harm to any existing programs or the general fund, but
leveraging the Trust to back additional state bonding capacity could provide an immediate
source of funds as opposed to setting up a new trust and waiting several years to accrue enough
of a base and interest earnings to fund even modest core infrastructure projects. With
new/expanded bonding capacity, the state could supply grants directly to critical infrastructure
projects vetted through TSEP or other approved planning processes under which the local
jurisdictions have established need for investment, ability to finance locally, and the need for
assistance.
The research team has been directed to flesh out operational mechanics of this approach.
Based on the concept presented, and the direction to the research team, the concept was
adopted without opposition – pending details to be developed in the next two weeks.
Additional Tools:
The Coalition is developing enabling legislation to provide local governments with the ability to
leverage private investment through Public Private Partnerships (P3s). These arrangements
allow infrastructure owner/operators to contract with private partners for the construction,
operation and/or maintenance of revenue-generating facilities.
The Coalition will also support a reasonable and balanced Bonding Bill. While the Coalition will not
independently develop a project-specific Bonding Bill, Members will engage in the dialogue
regarding the types of projects and the mix of cash and bonds that the Coalition feels is most
appropriate and complementary to overall Coalition goals.
Authorize Community Transformation (ACT):
As a point of information, Coalition Membership discussed a developing local option sales tax option being
promoted by key members of the Billings Chamber of Commerce.
The ACT group is proposing a local option sales tax that would provide the following;
A max tax rate of 3%
Maximum duration of 10 years
Provision for property tax relief
Requirement for project-specific list of investments
Voter approval
Segregation of funds from the General Fund
31
Meeting Minutes – November 14, 2016
Voting Member Meeting (Bozeman Area Chamber - Bozeman)
Page 4
The proposal allows taxable items to include general merchandise, clothing, electrical and appliance, home
furnishings, and miscellaneous retail which may not be included in the Coalition approach to expand the
resort tax.
Voting membership expressed concerns that this approach would not fit within ongoing Coalition dialogue
regarding equity between urban and rural populations, and expressed preference for the Coalition intent to
target tourism dollars as opposed to applying a general local option sales tax.
The Coalition took no formal position on the ACT proposal, but strongly suggested that educational efforts
point out the distinction between the proposed Tourism Tax and the ACT proposal.
Public Information Campaign:
Darryl James pointed out that the Coalition would need to mount a significant public information campaign
to educate elected officials and their constituents about the importance of infrastructure investment in
general, and more specifically about the various elements of our legislative package.
The Contractors have begun to raise funds for the campaign, but the Coalition will need additional monies
from existing and new members to spread our message through social media, paid and earned media, and
other outlets.
Meeting adjourned at approximately 2:00 p.m.
32