Wrapping Up The 2017 Legislative Session

By Jason Rittal-County

Development Advisor

The 2017 Legislative Session has come to a close. As always is the case, and no matter where you stand politically, I would anticipate that you feel there were both positive and negative outcomes.  For Fallon County, and from a local government perspective, the same holds true.  Below is a review of some of the key legislative issues that Fallon County weighed in on.  In addition to the bills specifically mentioned, a great many more were discussed in the halls and, through collaboration, either never surfaced, were defeated, or passed without fanfare.

In addition to working with legislators and building relationships with them, having relationships with associations and lobbyists and finding those with common interests on legislation is also important. Some key relationships that were utilized and/or developed during the session included the Montana Association of Counties, League of Cities and Towns, Montana Infrastructure Coalition, Montana Chamber of Commerce, Montana Petroleum Association, Treasurers Association, Clerk & Recorders Association, Contractors Association, Society of both Engineers and Architects, AFL-CIO, Montana Association of Oil, Gas & Coal Counties, Montana Economic Developers Association, Governor’s Office of Economic Development and several independent lobbyists. While Fallon County’s perspective was not always in line with all, and on occasion allies became adversaries, having relationships that allowed for dialogue was certainly helpful.

As was expected the budget (HB 2) and infrastructure (HB 473, SB 367 & HB 645) once again took center stage, but a few other bills or series of bills certainly attracted attention, including the mail ballot (SB 305) and the bills impacting Colstrip (SB 338, SB 339 and others).

Fallon County supported HB 61, which made funds collected from telephone providers for the purposes of enhancing 9-1-1 actually useable. These “stranded” funds were initially proposed to be swallowed into the general fund for use. HB 61 earmarked and set up a mechanism by which these funds would be available for local 9-1-1 centers, which Fallon County has, and providers to begin to enhance the systems to what is called “Next Gen” 9-1-1. Prior to the session approximately $10 million was in the account. In the end, after a last minute $2 million grab in the budget balancing process, $8 million was left for its intended purpose, 9-1-1.  Representative Frank Garner (R) of Kalispell was the bill sponsor. HB 61 has been signed into law.

Fallon County, along with all but a few other counties, supported SB 305, known as the “Mail Ballot” bill, as a means of saving local funds statewide and as a more efficient means of reaching voters for this particular election. After passing the Senate, the issue had what was probably the most heated hearing during the session, and was heavily debated in the House Judiciary Committee, all of which was highly publicized.  Several entities, including Fallon County, pushed for its passage. In the end, it failed.  Senator Steve Fitzpatrick (R) of Great Falls was the bill sponsor.

Fallon County also made the decision to support SB 338, the most controversial and debated of the Colstrip bills which would have provided mitigation funds related to community impacts resulting from the closure of Units 1 & 2. The decision to support that bill was made in large part because of the unique circumstance that Colstrip is in, and to do the right thing in support of our neighbors and friends during this challenging time. While other bills helping Colstrip, such as SB 339 were successful, SB 338, which would have most helped the community through the impacts, failed in House committee on a tie vote after passing the Senate. Senator Duane Ankney (R) of Colstrip was the sponsor of SB 338. Representative Jim Keane (D) of Butte also carried some of the Colstrip legislation, and should be acknowledged.

Fallon County was also in support of SB 308 sponsored by Senator Eric Moore (R) of Miles City which would have changed the way that Prevailing Wages are calculated on local government projects. The legislation failed in committee, but Senator Moore received correspondence from the Department of Labor with assurances that the Department will work on the issue in the interim. Fallon County will stay involved with Senator Moore, and the Department, to find some compromise(s) to the costs associated with Prevailing Wages to local governments in eastern Montana.

SB 278, introduced by Senator Steve Hinebauch (R) of Wibaux, which clarified and allowed more latitude for local government in the procuring of engineering, architectural, and surveying services, was developed by Fallon County in partnership with the City of Glendive, and further collaborated with impacted entities to ensure that the legislation was a positive move forward for all. The bill passed the Senate without receiving a “no” vote and passed the House on third reading 97-2. This legislation will save local governments both time and money.

HB 410, presented by Representative Ray Shaw (R) of Sheridan, would have increased vehicle registration fees by $1-$2 per year depending on age and type of vehicle, with the funds being designated for weed control throughout Montana. Noxious weeds are a constant concern for counties, so Fallon County supported the measure which failed to move out of the House.

SB 2, which clarifies the definition of a quorum for county commissioners, was carried by Senator Pat Connell (R) of Hamilton and supported by Fallon County.  The bill gives clarification to commissioners, and direction on how to handle situations where two or more commissioners may be in the same location and engaged in a conversation by a member of the public about county affairs. Simply put, if 2 or 3 commissioners end up in the same place, that by itself does not constitute a “meeting”.  However, if both or all three engage with the public, or each other, in a conversation that involves county affairs, it becomes a “meeting” and those commissioners present are now required to report who was involved, what was discussed, and where the conversation occurred at the next meeting. The legislation acknowledges a reality that occurs in our rural communities while allowing clear direction when those situations occur, and transparency to the public. One on one conversations with commissioners are not required to be reported, nor are conversations with two or more commissioners that do not involve county affairs. If you are talking about the ball game, then there isn’t a meeting. If you are talking about the county fixing a bridge or a road, and two or all three commissioners are there, then it is a reportable conversation.

Tax Increment Financing Districts, or TIF’s for short, which include Urban Renewal Districts like the one that SMART and the City of Baker have been working on for over a year were under constant attack during the session with over a dozen bills brought forward. Fallon County opposed the TIF legislation that would have significantly harmed this tool that is used statewide, and that SMART and the City are trying to utilize now, while allowing a few of the lesser damaging bills to go through unopposed as a form of compromise. All of the bills that would have significantly damaged TIF’s were killed, but in the end the big compromise was that a bill allowing for a study of TIF’s during the interim went through unopposed. Because of the efforts during the legislature, Fallon County has been offered a seat at the table with the stakeholders, formed to defend the TIF tool in the interim and through the study. Fallon County is now determining the level of involvement desired during the interim and how, or if, our efforts would both protect the Urban Renewal District being formed in Baker, and allow for other opportunities in the future for Fallon County.

Fallon County also supported the infrastructure bills that came forward, including HB 473 introduced by Representative Frank Garner (R) of Kalispell. Representative Garner worked with the Montana Infrastructure Coalition, of which Fallon County is a member, along with others from the east including Richland and Dawson Counties, the City of Glendive, City of Wolf Point, Eastern Plains Economic Development, and Southeastern Montana Economic Development as well as roughly one hundred other entities located throughout the state. The Infrastructure Coalition, during the interim, worked with independent researchers to analyze issues surrounding infrastructure in Montana, namely “How big is the problem and where are the most urgent issues?” After identifying the systemic safety issues with Montana roads, streets, and bridges, and the financial threat to the state’s ability to meet the match requirement for federal highway funding, the coalition devised a framework for legislation to address these issues via a fuel tax increase.

The ultimate goal of the legislation was to ensure that Montana would increase the safety of its road systems, both state and locally controlled, and that additional investment would be required to accomplish that goal. Specifically, the coalition determined that the State must have sufficient funds to match all available Federal dollars, and sufficient funds to maintain the secondary road system for which it is responsible; a statewide increase to the amount of funding to counties, cities, and towns was necessary to improve locally controlled roadways; state and local government must be held accountable for the use of the new taxpayer funds by reporting the use of all new funding received; funds received through the increased fuel tax would only be used for streets, roads, and bridges; and an audit of the Department of Transportation should be conducted in an effort to ensure that all MT DOT funding was being used in as effective a manner as possible.

From a local government perspective, this is where the conversation started. The allocation from fuel tax receipts has been a constant $16.76 million divided by a formula that includes population and road miles amongst all counties, cities and towns since 1983. No increase, no decrease, simply $16.76 million divided each year without consideration for increases in fuel consumption, inflation, or other factors. The fuel tax was last increased in the 1990’s with none of that additional revenue being allocated to local government. Fallon County’s current allocation was $49,553 for the most recent year.  Baker’s allocation was $49,160. This portion of the statute and the allocation was not changed in any way.

The revenue source was originally set at an $.08 increase in gas tax and a $.0725 diesel fuel tax increase with no other types of tax changes contemplated. The legislation passed the House with the increases in place, but upon moving to the Senate negotiations began to change the level of those revenue sources, and other bills creating revenue and maneuvering funds came into play. The fuel tax piece was now slated to be phased in between now and 2023. Gasoline will increase $.045 in 2017 and increase to $.06 by 2023. Diesel fuel will increase by $.015 in 2017 and increase over time to $.02 by 2023. As indicated above, a number of other items and pieces of legislation came into play, including a new tax on high-end vehicles and RV’s (SB 95 Jones (R)). In the end, the fuel tax increase passed with the Senate amendments.

The local government share will grow as the increases are implemented, and over time the local share as projected at the $.08 level should be at or near the same levels with the changes that were made in the Senate as they combine with the other budget legislation that was intertwined in the final days. Fallon County’s share of fuel tax revenue returned per year will grow to approximately $163,000 vs. the $49,553 allocated for this year. Baker will go from $49,160 to an estimated $116,919 by 2023 and Plevna from $7,262 to an estimated $17,272. While these numbers do not change the world, they represent consistent funds that will be distributed back to Fallon County, the City of Baker, and Town of Plevna to be invested in roads, streets, and bridges.  The Montana Department of Transportation will undergo an audit to improve efficiency, federal funds will be matched, and each recipient will be accountable for how the tax dollars are spent. Fallon County had a key seat at the table helping negotiate a more reasonable match requirement (20:1 from 5:1), less stringent bidding requirements, and maintaining the existing $16.76 million in funds, as is, with no new strings. HB 473 has been signed into law.

Senate Bill 367 (Moore (R)) and House Bill 645 (Cuffe (R)) were the two “bonding” bills and both were supported by Fallon County. These bills were manipulated, negotiated, twisted, and intertwined with other legislation, but in the end the required 2/3 majority vote required for the State of Montana to borrow funds was not met. These were supported, specifically, because Fallon County had a grant request that would have been funded had either of these pieces of legislation passed. The grant would have been utilized to offset costs related to remediation of wetlands on Baker Lake as required by the Environmental Protection Agency.  Because the bills failed, Fallon County will have to either infuse those funds or, more likely, now that other issues related to the lake are at the forefront, reapply and wait for the next cycle (2019).

Fallon County, in all likelihood, will not be getting the $100,000 grant, a direct benefit lost. In addition, the passage of one of those bills would have funded and thereby “cleared” a good number of local government projects out of the process. Those projects will now be reapplying, as will Fallon County, to request funds next cycle.  Those local governments will be refining their efforts and will be formidable with ranking comments from their previous application in hand, and two more years to improve their applications. The City of Baker is contemplating its water system issues and will, in all likelihood, be entering the competition soon with significant grant requests. If either of these bills had passed, the competition would have been much lighter. Difficult, but necessary, additional investment in Montana’s infrastructure would have been made.

In the end, as you can see from above, some bills passed that were supported, and some did not.  We simply watched some bills and held back direct involvement if it didn’t become necessary. Some bills we discussed, such as HB 420 (Hamlett (D) Cascade) which created an Oil & Gas Impact Fund, and HB 633 (Essmann (R)-Billings) which dealt with pipeline impacts, but took no stance due to a variety of factors including industry input, other local government input, etc.

On a personal note, I hope that the explanation of these key bills and the other notes provides you a picture of our legislative efforts. I understand that your individual positions on some of these bills may have been different, but using a local government perspective we tried to build relationships, support the best bills, kill the worst, and watch out for snakes in the weeds along the way. It was my privilege to be in Helena representing Fallon County and, in some ways, all of eastern Montana. I think it is safe to say there are other communities and counties that would offer their thanks for your sacrifice in sending me. I can say that the economic development community, at the Annual meeting of the Montana Economic Developers Association, expressed much gratitude for our efforts, which often aligned.  Them thanking me was really a thanks to you.