Jon at Montana Main Street submitted a response which began to address questions MOTTO raised regarding the HB469 veto.  

The legal proceeding was a tax protest filed by Qwest in 2006 that is making its way through the appeal process (still trying to learn more about this). Around 12 companies on average file tax protests per year based on DOR's centrally-assessed theories.

Just to answer some of the questions you pose: Yes, wireless companies will see their taxes double as a result of the governor's veto. Currently, they are not centrally-assessed based on the theory that cell towers do not fall into the same category as other utilities that have physical connections from county to county (railroads, pipelines, transmission lines, telephone lines). That a decision the legislature made in 1999. When DOR moves them into the centrally assessed category after the session, their property taxes will go from 3% to 6%. Not good for investment in Eastern Montana where they need more cell towers.

Also, since the DOR believes no physical connection is needed in order to lump a business into the centrally-assessed category, look for them to drag other companies (department stores, restaurants, banks, etc...) into centrally assessed categories just to double the tax rates without legislative action.

Like you, I am also wondering if legislators who supported the bill initially will switch only because of the governor's veto. Nothing that was presented in the governor's letter was new information. All of it had been discussed in both houses. If it was such a good idea for Montana and constituents, what has changed? No need to respond to my question - I already know the answer.

Jon is a good advocate for the Chamber and business in general.  I, too, have reservations regarding business taxes and agree the State should not be looking at centrally assessing like property as Jon described.  Central assessment is an important issue that needs to be addressed with the executive in context.    

I have long been one of those "urban" voices who rally to support rural interests, particularly central & eastern Montana.  We all have to work together.  That is exactly why this particular bill & veto have to be looked at so closely.  Tax protest places money local gov't need aside, unavailable to the gov't.  I need not remind anyone in North Central Montana the effect of tax protest on local government budgets.  These tax issues have broad implications to our local governments and school districts, and ultimately the local taxpayer (including business).

In this particular instance, it appears that wireless companies have been historically charged at the 3% rate.  Senator Gillan &  Representative McNutt (both of whom I admire & have the utmost respect) have stated that this was a legislative decision in 1999.  The bill carried by then Rep. Gillan in 1999 is not that clear( however it may have been a different bill or administrative rule).  I do  believe these issues were discussed at length in the committee, and a 3% rate is current intent by our legislators.  (That does not change what has been collected or what was projected to be collected according to the HB469 fiscal note).

The primary issue, I believe, is does the legislative intent in 469 harm the ability for the State to collect at a centrally assessed rate of 6% from property owned by non-wireless telecommunication companies?  Are we treating similar companies differently or unfairly?  If the answer is yes, are we potentially creating a large financial risk to the State, local governments, and education?  

I have asked DOR for information regarding the tax protest. 

Montana Main Street posts on the veto of HB469, A bill carried by Representative McNutt which "clarifies" the tax assessment rate of wireless property.  Simply, the bill allows such property to be assessed as class 4 & 8 property (a tax rate of 3%) rather than centrally assessed class 13 property (a rate of 6%).  It has been recent practice that such property been classified as 4 & 8, or the 3% rate.  The bill passed with bi-partisan support in both houses, on its face enough to override a veto, should the yea votes remain solid.  Lets examine the issues.

Montana Main Street contends it was DOR's intention to reclassify such property

There are two negative consequences to the governor's veto. First, raising the taxes of the wireless companies will discourage development of new cell towers, especially in areas with spotty reception like Eastern Montana. Do we really need to raise taxes during a time of record tax collections?

The second consequence is that this veto signals the administration's intention of doing similar "reclassifications" on other businesses. In short, more businesses will see their taxes go up. This is not a result of legislative action, but crafty new legal theories cooked up by the DOR. The administration wants to bring more companies into the centrally-assessed category in order to raise taxes. So, any business with multiple locations around the state should be very worried about changes coming their way.

The executive contends the bill was vetoed (Governors veto letter) for a variety of reasons, including a legislative audit, which exposed the error

Rather than “clarifying” current law, HB 469 ratifies the unlawful practice of prior Administrations, which failed to properly implement the tax laws enacted by the Legislature. As concluded by the Legislative Auditor, it was a mistake for past Administrations to grant millions of dollars of tax breaks to wireless telephone companies, contrary to Montana statutes and at the expense of homeowners, farmers, ranchers, and other businesses. HB 469 ratifies the past unlawful practice and rewards past mistakes. However, let me be clear. HB 469 does not “clarify” current law. HB 469 changes it.

Indeed, the legislative auditor did recommend to centrally assess such property (recommendation #7, summary page 3).  Additionally, the Governor stated education and local governments are at risk because of the past practice.

As a final addendum, I unfortunately must also let you know that this past practice has created financial risks for local governments and schools. It is likely no coincidence that on the day after HB 469 was transmitted to my office, Montana’s largest telecommunications company filed a constitutional complaint to the tax methods endorsed by this bill. That challenge is based on a claim of discrimination due to the more favorable treatment of wireless phone company property as compared to traditional landline telephone property under the practice adopted by past Administrations. HB 469 thus attempts to engrave into Montana statutes what has been alleged as a constitutional discrimination claim in a formal legal proceeding.

Certainly, the potential threat of a further loss of property tax revenue at the local level from a land line telecommunications lawsuit legal proceeding is disheartening. 

Having been one of the few who has been on the receiving end of a Governors veto, with a veto proof vote, that ultimately was not overturned, I must admit I was initially very skeptical of the veto.  However, the legislative audit recommendation and lawsuit legal proceeding certainly provides compelling evidence for one to examine and contemplate all available information. Finally, a couple of questions remain to be answered. 

1. One can assume these issues were fully debated, discussed and investigated in committee and by both houses of the legislature.  The vote was striking.  If these issues weren't discussed (unlikely), why?  What reasoning did the committee and our legislators utilize in determining their position? 

2. What was the historical reason initially for assessing as class 4 & 8?  Why & how did it differ than land based telecommunications?

3. Loss of revenue that has been placed on local homeowners, past & future

4. Worst case scenario, does the pending lawsuit legal proceeding potentially threaten to change all telecommunication assessments currently assessed from class 13?

5. Is this considered a tax increase?

 Democratic legislators will find it difficult to vote agaist the veto inlight of the strong veto letter.  This issue, however, will not go away.  Should the veto stand, the issue will certainly be raised again, and these very issues will need to examined very closely.    

Mike Wheat (D), who has declared his candidacy for Montana's Attorney General, can now be found at his campaigns website, wheatforag.com.  

I am also a combat veteran. I served with the U.S. Marine Corps Division 1 during the Vietnam War in 1968-69. I was trained as a machine gunner, served as a squad leader and was awarded a purple heart. As a combat marine, I learned the value of discipline and teamwork. I have applied those skills through out my professional career and will apply them as your Attorney General.

I served with Mike in '03 & '05 in the State Senate and along side him on the Judiciary committee.  Mike is a good man, a solid & dedicated public servant.  He will make a formidable opponent in upcoming election/s. 

Summit Aeronautics, located in Helena, recently hosted a press conference in support of HB529, Representative Lake's attempt to reduce the business equipment tax .  HB529 has been closely followed by the Chamber at their Montana Main Street blog.

H.B. 529, by Rep. Bob Lake, R-Hamilton, would exempt a business’s first $100,000 in equipment from the tax (versus a $20,000 threshold now, which is all taxable if the value of the equipment is above that level) and lower the rate from 3 percent to 2 percent.

Lake said businesses in Washington, Wyoming, North Dakota and South Dakota all pay no tax on their equipment, while in Idaho the rate is 1.75 percent.

“All of these states have an advantage on the state of Montana” when it comes to luring and retaining business, Lake said.

In the conference, Hoffman said Summit paid $200,000 in business equipment tax last year, and the anticipated addition of several more multi-million dollar milling machines would drive that figure significantly higher in the future.

HB529 is one of the major policy bills remaining during these final weeks of the session.  It deserves serious consideration.   On a side note, congratulations to Summit and the growing aeronautics sector, including Avmax, Cable Technologies, Sonju and the many other private companies calling Montana home.

What has happened with the republican Senate leadership?  On its face, it would seem they have ceded to their majority counterparts in the House.  With the major bills in the Senate (tax, education, budget), this is a wonderful opportunity for the GOP Senate leadership to step in and provide competent and reasoned leadership.  What we have seen, however, is continued tired & divisive rhetoric from the House leadership.  That time has came and passed at the height of the budget battle.  Opportunities were lost during those two weeks.  It is time for fresh eyes and perspective, or at the very least, a fresh voice discussing the opportunities and challenges that lay ahead over the final weeks.

The GOP plan for permanent tax relief as originally presented remains unrealistic, just as it was during the budget battle while in the house.  The failed proposal in the original form should have been taken off the table and replaced with a more suitable & workable proposal moderates could support, particularly in light of the support of  Rep. Lake's business equipment tax proposal and the continued calls by the executive and democrats for out of state tax collection support.  What has been missing is the leadership to pull these various issues together and fashion a compromise. 

There is not a clear mandate in the legislature.  Hanging on to an original proposal is unrealistic, and only serves a political purpose.   

MOTTO last week

When this issue has been raised before, and with the BRAC (closure) looming past and present, Great Falls and Central Montana has not seen support from our sister communities, such as Missoula.  As a matter of fact, the Missoulian has been quite vocal in editorializing against the missiles and monies needed to save that mission and attract others.  While it is hopeful they will remain quiet and supportful now that a loss of the 50 missiles looks more likely, it is unlikely

Missoulian today

Of course, we understand that eliminating some of the missiles manned and maintained by Malmstrom Air Force Base will mean fewer federal dollars flowing to Montana. Quite frankly, that's OK with us.

Yep.  We're polite here. Nothing more to say. 

Now.

Earlier MOTTO posts discussed Schweitzer political savvy when it came to proposing his anticipated energy bill.  A press conference discussing tax breaks for green energy, clean coal technology, transmission, and a free consumer license fees were probably enough to quiet the impending political storm regarding the  tardiness of the bills introduction.   While politics was able to provide a calm, it couldn't change time.  When the bill was finally ready for committee discussion, politics couldn't place the proverbial "lipstick on a pig" when the pigs handlers weren't in the seats.  (Democratic tax committee members absent and without proxies...whoops).  It is hard enough to place 50+ substantive amendments on a complex bill with time and numbers, impossible at the last hour.  Politics may move this bill forward,  continued political errors will kill it. 

Thus the blast motion and subsequent vote.  Motion fails 25-25, with the Chairman of the Tax Committee voting nay.  Enter politics once again, this time bring in the big guns and local issues:

"This thing isn't necessarily dead if you have some Republicans who wake up tomorrow morning and decide they support economic development," he said. "I'm passionate about Montana leading in clean and green energy, and this was the vehicle to do it. I suppose it's not a surprise that Republicans did not develop energy over the last 20 years."

The bill, he said, would spur $2 billion worth of economic development and create 2,000 jobs, Schweitzer said.

He said he may have to go on radio stations in Shelby, home of Republican Jerry Black, where a $500 million wind-power project is tied to a transmission line that depends on the tax breaks the bill would provide. Or, Schweitzer said, he might have to take the message to Roundup, home of Republican Sen. Kelly Gebhardt, that stands to lose a $2 billion coal gasification project if the bill doesn't pass.

"They probably know and understand what's at stake," the governor said of the Republican senators. "There's a chance they'll start working for the folks back home and not the lobbyists in this building."

Gloves off, politics raising its uglier side as political posturing moves to political threats.  This is what happens when time expires.   Policy development cannot occur in a vacuum, particularly in the midst of one of the most partisan sessions in recent memory. 

Regardless, the proposals (sans free license fees) deserve further consideration.  Taking a closer look at the tax credit concepts is possible in the always stingy House tax committee.  A solid conference committee or even a joint subcommittee once to the house can provide further scrutiny, due diligence, and a more thorough review and consideration of needed amendments. 

And the threats?  Not necessary.  Senators Black & Gebhardt had nothing to do with the late introduction and problems associated.  That lies with the Executive.  Blame thyself, make amends, and get the proposal across to the House for the work as previously noted.             

You have to love the irony in this:

their ultimate ‘green car’ is the source of some of the worst pollution in North America; it takes more combined energy per Prius to produce than a Hummer.

Ed Begly Jr. and Al Gore will need to stock up on their offsets.  And the battery the Prius uses?

the Prius is partly driven by a battery which contains nickel. The nickel is mined and smelted at a plant in Sudbury, Ontario. This plant has caused so much environmental damage to the surrounding environment that NASA has used the ‘dead zone’ around the plant to test moon rovers. The area around the plant is devoid of any life for miles.

The plant is the source of all the nickel found in a Prius’ battery and Toyota purchases 1,000 tons annually. Dubbed the Superstack, the plague-factory has spread sulfur dioxide across northern Ontario, becoming every environmentalist’s nightmare.

“The acid rain around Sudbury was so bad it destroyed all the plants and the soil slid down off the hillside,” said Canadian Greenpeace energy-coordinator David Martin during an interview with Mail, a British-based newspaper.

All of this would be bad enough in and of itself; however, the journey to make a hybrid doesn’t end there. The nickel produced by this disastrous plant is shipped via massive container ship to the largest nickel refinery in Europe. From there, the nickel hops over to China to produce ‘nickel foam.’ From there, it goes to Japan. Finally, the completed batteries are shipped to the United States, finalizing the around-the-world trip required to produce a single Prius battery.

And you thought they were only ugly on the outside. (h/t to venture chronicles)

Montana is in line to lose 50 missiles as part of Malmstrom's mission.  When this issue has been raised before, and with the BRAC (closure) looming past and present, Great Falls and Central Montana has not seen support from our sister communities, such as Missoula.  As a matter of fact, the Missoulian has been quite vocal in editorializing against the missiles and monies needed to save that mission and attract others.  While it is hopeful they will remain quiet and supportful now that a loss of the 50 missiles looks more likely, it is unlikely.

Opponents of the missiles include peace advocates.  Although I disagree, I can appreciate their position, and this post is not about them or any peace or anti-war movement.  As distasteful as it might sound to some, supporting the missions of Montana's Air Base is as much about economics as it is national defense.   It is no different than the prison to Deer Lodge or Shelby, the Universities to Missoula and Bozeman, or State Government operations to Helena.  Roads, schools, local government, and businesses have a stake in the vitality of Malmstrom.  That vitality includes maintaining current missions and operations, as well as adding new ones.  Additionally, Malmstrom provides statewide impact, from business dollars to fire suppression, to search & rescue. 

Montana's congressional delegation will stand together in a bi-partisan fashion in support for Malmstrom and current & future missions.  Communities around the state must also join with our delegation & central Montana and do the same. 

Shane at Netroots discussed whether or not term limits or republicans were the problem during these contentious days at the Legislature.  The post indicates while term limits are a cause of some strife, we will see more turn over because of antics like we've seen this session

Whatever the reason, it is a mess and rather embarrassing. I expect a bigger turnover in the house in two years than can be accounted for by mere term limits

Shane, I would argue the mess & embarrassment also have roots in term limits.  Lets examine this years wanted poster boy, Representative Boggio.  Hunting violation prior to the session, a DUI (& lack of remorse), and most recently, his failure to properly license his personal automobile (after 11 months), resulting in a ticket.  

Boggio replaced Rep. Joan Andersen (R).  The Honorable Rep. Andersen represented the district with dignity and respect, Chaired the House Education committee, respected by both parties, and understood the process, the people, the issues.   Rep. Andersen was termed out after 4 sessions. 

I will find it hard to believe the Montanans' in that district will vote Rep. Boggio back into office, as the "term limits" that were in place prior to 1999 (voting) will more than likely kick in.

Aside from the Boggio embarrasment factor, imagine the experience Rep. Andersen would have brought to the education committee & process in general.