Committee: Revenue and Transportation Interim Committee
Author: Megan Moore
Posted on March 29, 2018
The Revenue and Transportation Interim Committee met March 13-14 in Helena. Agenda items included a continuation of three assigned interim studies, revenue estimating and monitoring, agency updates, and a joint meeting with the Legislative Finance Committee to consider the changing economy and impacts to the long-term viability of Montana’s tax structure.
The committee also received a requested update on the implementation of administrative rules for the medical marijuana program. Those offering public comment expressed concerns about the adopted administrative rules, which are effective April 10, 2018. The committee echoed those concerns in a letter to the Children, Families, Health, and Human Services Interim Committee, which has oversight for the medical marijuana program. The letter asked that committee to object to the adopted rules and ask the Department of Public Health and Human Services to amend the rules. Specific areas of concern included a large per-patient allowable canopy space, testing standards, lack of scientific standards for testing laboratories, and the phase-in of provider licensing.
The Legislative Audit Division presented the performance audit of tax increment financing (TIF) to RTIC and the Local Government Interim Committee. The two committees also discussed additional topics for the TIF study, including a review of statutes authorizing TIF, discussion of the goals for districts that use TIF, understanding the reasons for inconsistent certified property values in districts that use TIF, and consideration of the roles and responsibilities of the Department of Revenue related to TIF.
For the House Joint Resolution No. 22 study of agricultural property classification and valuation, staff presented a history of related Montana statutes. The committee asked for additional analysis of applying income requirements on a per-acre basis and on the effects of changing the classification of 1 acre of property beneath an improvement on agricultural property.
The work plan for the study of centrally assessed and industrial property called for the committee to collect information on taxes paid by utility customers in Montana and other states. The committee heard an overview of the Montana law, known as the tax tracker, that allows a public utility to pass property tax expenses on to customers and decided not to pursue the collection of the tax information called for in the work plan due to the complexity involved.
The joint meeting with the Legislative Finance Committee included information on a variety of topics, including revenue trends in all states, an industry comparison of taxes collected on $1 million of sales, economic sector trends, a tax gap analysis by the Department of Revenue, and an analysis of potential revenue implications from adjusting certain taxes for inflation. RTIC decided to receive additional information requests at a later meeting and will not meet again jointly with the Legislative Finance Committee.
The committee also received a requested presentation on the distribution of oil and natural gas production tax revenue. The presentation included a brief history of oil and natural gas taxation, which is directly related to the distribution of the tax. The committee asked for additional information at the next meeting about the Board of Oil and Gas Conservation budget. The Board has discretion to set the rate of the privilege and license tax, and that rate affects the rate of the tax for oil and gas natural resource distribution, which provides for the only oil and gas tax revenue distributed to cities.
The committee’s next meeting will be May 2-3, 2018, at the Capitol in Helena. For more information visit the committee’s website or contact Megan Moore, committee staff.
Committee Website: www.leg.mt.gov/rtic
Committee Staff: memoore@mt.gov or 406-444-4496
