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SELECT COMMITTEE ON ECONOMIC DEVELOPMENT
HOUSE OF REPRESENTATIVES
48TH LEGISLATURE
ATTENDANCE
DATE: March 15, 1983
ROOM: 224A
PRESENT
VINCENT, John - Chairman X
SCHYE, Ted - Vice-Chairman X
ASAY, Tom X
()i'\ l{ K~L,. Paula X
\o'ABHECA, Jay X
ABSENT OTHER
FAGG, Harrison EXCUSED
HANSEN, Stella Jean X
HARPER, Hal X
HARRINGTON, Dan X
METCALF, Jerry X
NEUMAN, Ted X
RAMIREZ, Jack X
VINGER, Orren X
MINUTES OF THE SELIX:.'T CC:M-{PlTEE 00 OCONCMIC DEVELOPMENT
March 15, 1983
The eleventh meeting of the Select Committee on Economic Development was called to order by Chairman, John Vincent at 10:24 p.m. in room 224A in the capitol Building, Helena, Ivbntana on March 15, 1983.
Roll call was taken and all rrembers were present with the exception of Representative Fagg who was excused.
QiAIRMAN VINCENT stated he would like to welcome everyone to the hearing and apologized for the lateness of the meeting. He commented due to the lateness of the hour, he would like the sponsors to save ~~eir detailed explanations of the bill for Executive Session, and let those who came to testify have rost of the tirre. The bills heard this evening will be in the following order: HB 709, SB 316, HB 865.
REPRESENTATIVE NORDIVEDr, Sponsor of HB 709, explained this bill is a mechanism that is rrore efficient than the venture capital corporation for bringing equity capital into Montana. This is a bill that if you sell a capital asset at a gain and within a certain period of time reinvest the capital in a Montana venture, your capital gain will be put off as long as it is invested in a Montana enterprise. He stated an example is demonstrated in Exhibit A.
CHAIRI'v1AN VINCENT asked for any Proponents to speak for HB 709, there being no Proponents, he asked for any OpFOnents.
OPPONENTS
DAN BUCKS, Deputy Director of the Department of Revenue, explained while the bill seems straightforward, it leaves many technical questions unanswered. For purposes of Montana individual and corporate income taxation of gains, the federal laws are controlling. It is, therefore, necessary to have the provisions of this bill fit with the federal laws on taxation of gains. This ProFOsed bill doesn I t make a clean connection between federal and state law. He explained the six problems that the bill does not adequately address. See Exhibit B.
QiAIRMAN VINCENT asked if there were no further OpFOnents, would Representative Nordtvedt care to close.
REPRESENTATIVE NORDTVEDT stated he had intended to change the definition of the qualifying capital investments, because he believes 99% of the objections stated is to restrict this to equities. He felt this solves the difficulties with tracking with the dividend, etc. This is entirely different than an investment credit because this does not delay the payment of any taxes unless an act takes place. Unless a taxpayer roves an investment from out of state into the state, there is no benefit. He hoped to address same of the questions in rore detail later.
Page 2
CHAIRMAL~ VINCENT stated they would close the hearing on HB 709 and open the hearing on SB 316.
SENATOR TaVE, Sp:msor, explained this bill is the beginning farrrer IS
bill. He felt one of the areas that could have been rrore emphasized relating to the other bills before the committee is agriculture. He explained the mechanics of how SB 316 works. He commented this bill is patterned after the Iowa program that has been in operation for about 14 rronths. It is a bonding principal. There is CL"1 agriculture authority established and the agriculture authority then approves the sale of ronds. He stressed it works on a unique principal that is extrerrBly simple. His example explained a young farmer who wanted to rorraw $31,000 to build a pole bam. He went to the local bank, and the bank approved the loan for credit. The risk is with the bank, the state is not involved. The bank after approving the loan sent it up to the Iowa Agriculture Authori ty for their approval. After their approval, the loan is then sold at a bond for $31,000 to the sane bank. The bank buys the rond for that arrount, makes the rroney available which is then loaned to the farrrer. He explained that the bank in effect, has taken the agriculture loan out of the agriculture loan portifolio, and rroved it over to its municipal bond portifolio. When this happens two very important things happen. First the interest rate is substantially less. Secondly, not only is the interest lower, but the terms of the loan can be dealt with. He further explained the variable interest rate. He stated there are restrictions in the bill regarding who qualifies. He wanted to further explain the second provision to t~e bill that he felt was also very important.
This provision provides for a credit for retiring farmers who want to sell to a beginning farmer for less than 9%. All of the interest income or capital gains that would be received from that contract will be tax free from the Montana Individual Income Tax up to a maximum of $50,000. He felt this incentive might be enough to sell to a M:mtana individual rather than an out of state corporation. He asked the corrmittee to review Exhibit C, the StaterrBnt of Intent, and Exhibit D, a letter from Kenneth Siroky, Roy, M::mtana.
PROPONENTS
JACK GUNDERSON, Depart:rrent of Agriculture, stated their support of SB 316. He stated since 1950 the number of young fanns in M::>ntana and the rest of the U.S. has declined significantly. In M:>ntana alone, the number of farms has dropped by 35.5 percent fram 37,200 to 24,000, but during this sane thirty-year period, the size of the average farm has increased 48 percent. Obviously, fanns are becoming larger, which is an indication that the opportunity for corporate expansion in agriculture is increasing. He asked the comni ttee to review the testirrony fran Keith Kelly, Director of Montana Department of Agriculture for further oorrments. See Exhibit E. He asked the comnittee to tum to Exhibit E, page 3, regarding their one amendment to read nine members, appointed by the governor, and adding section 2(g) identifying the ninth member as the Director of the Department of Agriculture. He further stated he felt the last part of the bill was the most important.
Page 3
TERRY MURPHY, President of Famer' s Union, stated they have worked for a number of years for this type of bill and SB 316 is the most straightforward. He noted there is no fiscal impact on the state, it involves no state appropriation and will be self-supporting administratively.
JO BRUNNER, Representing ~~ Involved in Farm Economics, stated their supp:Jrt of SB 316. She explained their organization supported the bill introduced by the '81 legislative session, and are very supp:Jrtive of the simplification and updating of certain portions to this bill. They appreciate that these loans could be used for the purchase of machinery, to build facilities, or to purchase land. They are especially encouraged to see the applicant must declare his intention to live in M:)ntana during the length of the loan. They believe that Section 23 allowing the tax relief for tmse selling land to the recipient could be increased, because they feel the $50,000 tax break might not be enough. See Exhibit F for further cormrents.
ESTHER RUEL, Representing M:)ntana Cattleman's Association, stated their support of SB 316. She noted she drove over 300 miles to testify for this bill tonight. She feels it is time that a bill such as this be supported.
STEVE MYER, Representing ~1Jntana Association of Conservation Districts, stated their sUpp:Jrt for SB 316.
KEN SHEPHERD, Representing Corrmunicating for Agriculture, stated their sUPp:Jrt for SB 316. He asked the Comrrrrttee to review his testimony, see Exhibit G. He surmnarized one of t.~e rrost important items, is if we do not provide ways through which qualified beginning farmers and ranchers can successfully get started, we stand in danger of seeing our agricultural land acquired by large, nonagricultural corporations. These entities usually do not support local cammunities and businesses upon which the economy and vitality of the state depends, and they often abuse the land, rather than practice good conservation techniques. We urge you to approve SB 316 for the good of tbntana, and for the good of its agriculture and the good of its young people.
JAY ~l, Representing M:)ntana Association of Utilities, feels this bill is exceptionally well drafted. They feel they could sell the same amount of kilowatt and telephone service to corporate interests, but they feel they owe a greater debt to the famers of M:)ntana, and they support t..l-J.is bill.
KEN KELLY, !.vbntana Dairyrren' s Association, stated they fully support this bill and urge the Corrmittee a 00 PASS on it.
Page 4
'Ia1 DAUBERI', Representing .r.bntana Environrrental Information Center, rose in support of SB 316.
JIM TPLNDY, Red Lodge, stated he is currently ranching and his family goes back to 1864. He stated they are in trouble and something needs to be done right away aOOut the little man. If the corporation comes in or the governrrent gets involved the prices will be very high. He stated how difficult it was to compete with the outside interest from F~t, etc. He stated they are willing to work with the $226 that the average farmer made last year, but they are slowly running out of tirre.
IARRY LELIa), Carbon County, stated in the area where he lives, in a 13 mile radius, there are 37 ranchers ana only 7 of these are under 30. He feels this bill will help the young rancher get started.
STEVE BRa~J, Representing Montana Independent Bankers ~ssociation, stated they fully support SB 316.
SENATOR 'lavE stated others in the house that supported this hill were SENATOR SEVERSON, REPRESENI'ATIVE TED NEUMAN, and Fred Brown, from N.F.O.
CHAIRMAN VINCENT stated since there were no further Proponents to SB 316, were there any Opponents. Being no Opponents, were there any questions from the committee.
SENATOR TaVE closed by stating the dedication of the witnesses show their dedication to this bill. He commented he would support the amendrrent proposed by Keith Kelley, and also he had no objection to restricting this to Montana residents. He wanted it noted that the banks of Iowa like this bill because it converts a loan from sorreone they know to a municipal bond loan, which is tax free for them. He explained this is not a panacea for beginning farmers, but is a small step to help them.
CHAIRMAN VINCENT stated they would close the hearing on SB 316, and open the hearing on HB 865.
REPRESENTATIVE FABREGA stated he was asked by Representative Fagg to introduce this bill, since he was not able to make it this evening. He explained that HB 865 is rreant to encourage new jobs in rv'bntana. He further explained the mechanics of the bill and the three incentives involved with the options of this bill.
PROPONENTS
DAVE C£SS, Representing Billings Chamber of Oommerce, expressed support for HB 865. He feels this bill is important because jobs have to be created in the local oommunity.
Page 5
OPPONENTS
DAN BUCKS, Department of Revenue, stated they have several administrative problems with this bill and most problems arise from Section 1 and Section 3. One problem is when a business shuts down in one part of the state and starts up in another credit is still being claimed. Also there is no definition of what a permanent full time position is in Montana or a new or expanding business is not defined. He stated there is another wage credit bill, SB 241, and these SaID2 problems were discussed in the Senate Taxation comnittee and arrendrrents were made to take care of some of these problems. His depar1::ment would pro[X)se that SB 241 is relevent to discussion here to provide for a limit of credit for $800 and be sunset after 2 years, so that data could be collected to determine what the fiscal effects are, and if these incentives really work or not to achieve the intended purpose.
LEO BERRY, Director of the Department of Natural Resources and Conservation. He stated the department is not opposed to the concept of HB 865, but are opposed to the provision that takes one-half of the funds from the Al ternati ve Renewable Energy Sources Program and allocates t..'em to the Department of Cbmmerce for grants to businesses that create new jobs. See Exhibit H for further comments. He summarized that G,e impact of reducing our program funding by 50 percent v.Duld be not only the loss of approximately $2.5 million in loanable funds to the renewable energy sector, but also the private sector funds that \-Duld be leveraged with our money. This reduction will came at a time when we cannot come close to meeting the demand for our loanable funds.
JAMES MCNAIRY, Aero Alternative Energy Resources Organization, stated they also do not like the source of funds for the grant portion of HB 865. They agree with Mr. Berry I s reasons. They have problems concerning t.~e tax credi t portion of the bill. All businesses operating in Montana v.Duld be better off if markets existed to sell their products than tax credits existing for them to go into business. There is also no targeting set up for who gets the money. Also there is no carry over provision in the grant portion of this proposal. They find a problem with this, and a firm may not be able to take advantage of the grants.
REPRESENI'ATIVE FABRffiA closed by stating maybe the conmi ttee Vv'Ould like to ask Representative Fagg questions regarding the testimony given by the Opponents.
The meeting adjourned at 11:18 p.m.
{;Ji~i-Rfta!~ MIte ver Secretary
RESENTATIVE JOHN VIN::Et.:rr CHAIRMAN
VISITOR'S REGISTER
HOUSE SELECI' ECONaITC DEVELOPMENT. COMMITTEE
BILL ----------------------------lIB 865 DATE ____ 3/_J_5_1_83 ________ _
SPONSOR ---------------------------
NAME RESIDENCL REPRESENTING SUP- OP-PORT POSE
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IF YOU CARE TO WRITE COr~ENTS, ASK SECRETARY FOR LONGER FORM.
WHEN TESTIFYING PLEASE LEAVE PREPARED STATEMENT WITH SECRETARY.
FORM CS-33 , n ...
VISITOR'S REGISTER
HOUSE SELOCT - ECCNMrC l)E:VELOPHENI' COMMITTEE
BILL HB 709 DATE 3/15/83 ------------------------------
SPONSOR --------------------------
NAME RESIDENC.2 REPRESENTING SUP-PORT
--IF YOU CARE TO WRITE COMMENTS, ASK SECRETARY FOR LONGER FORM.
WHEN TESTIFYING PLEASE LEAVE PREPARED STATEMENT WITH SECRETARY.
FORM CS-33 1-83
----..,
OP-POSE
--- --
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VISITOR'S REGISTER
HOUSE £WECr - .ECON(lvUC DEVELOPMFNI' COMMITTEE
BILL ____ ~S~B~31~6 ______________ _ DATE 3/15/83 ----'----------SPONSOR -----------------------
NAME RESIDENCi:: REPRESENTING SUP- OPPORT POSE
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IF YOU CARE TO WRITE COr4MENTS, ASK SECRETARY FOR LONGER FORM.
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on
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h
resp
ect
to
wh
ich
th
e
ele
cti
on
p
rov
ided
fo
r u
nd
er
sub
ch
ap
ter
S.
of
the
Inte
rnal
~evenue
Co
ae
of
19
54
. as
amen
ded
. is
in
eff
ect
bu
t w
ith
re
sp
ect
to
wh
ich
th
e ele
cti
on
pro
vid
ed
fo
r u
nd
er
15
-31
-20
2.
as
~mended,
is
no
t in
eff
ect.
ad
juste
d
gro
ss
inco
me
do
es
no
t in
clu
de
any
p
art
o
f th
e
co
rpo
rati
on
's u
nd
istr
ibu
ted
ta
xab
le
Inco
me.
n
et
op
era
tin
g
loss.
cap
ital
gain
s o
r o
ther
gain
s.
pro
fits
. o
r lo
sses
req
uir
ed
to
b
e in
clU
ded
in
th
e
sh
are
ho
lder'
s
fed
era
l in
com
e
tax
ad
juste
d
gro
ss
inco
me
by
re
aso
n
of
the
said
ele
cti
on
un
der
sub
ch
ap
ter
S.
Ho
wev
er.
the
sh
are
ho
lder'
s
ad
juste
d
gro
ss
inco
me
sh
all
in
clu
de
actu
al
dis
trib
uti
on
s
fro
m
the
co
rpo
rati
on
to
th
e ex
ten
t th
e V
w
ou
ld
be
treate
d
as
tax
ab
le
div
iden
ds
If th
e
sub
ch
ap
ter
S.
ele
cti
on
w
ere
no
t in
eff
ect.
t~tL~l
A s
hare
ho
lder
of
a D
ISC
th
at
is
exem
pt fro~ th~
co
rpo
rati
on
li
cen
se ta
x u
nd
er
15
-31
-10
2(1
)(1
) sh
all
in
clU
de
in h
is
ad
juste
d
gro
ss
inco
me
the earn
ing
s an
d p
rofi
ts
of
the
DIS
C
in th
e
sam
e m
ann
er
as
pro
vid
ed
b
y fe
dera
l la
w
(secti
on
-4-
1 7 3 4 5 b 1 B
9 ID
11
12
13
1'.
15
1&
11
1~
19
2D
21
22
23
24
25
LC
08
11
/01
99
5,
r,t
ern
al
Rev
en
ue
Co
de)
for
all
p
eri
od
s
for
wh
ich
th
e
D!S
C ~lection
is effecti
ve."
Secti
on
2
. S
ecti
on
1
5-3
1-1
13
, M
CA
, is
a~ended to
re
ad
:
"1
5-3
1-1
13
. G
ross
in
com
e an
d n
et
inco
me.
(1)
Th
e te
rm
"g
ross
inco
me"
mean
s all
in
co
me
reco
gn
ized
in
d
ete
rmin
ing
the
~3rporation's
gro
ss
inco
me
for
fed
era
l in
co
me
tax
pu
rpo
ses
an
d:
(a)
inclu
din
g:
(i)
in
terest
ex
em
pt
fro
m
fed
era
l in
co
me ta
x;
(i i
) th
e p
ort
ion
o
f g
ain
fr
om
a
liq
uid
ati
on
o
f th
e
rep
ort
ing
co
rpo
rati
on
n
ot
reco
gn
ized
fo
r fe
dera
l co
rpo
rate
inco
me
tax
p
urp
oses
pu
rsu
an
t to
secti
on
s
33
1
thro
ug
h
33
1
of
the
Ilt
ern
al
Rev
en
ue
Co
de
{as
tho
se
secti
on
s
may
b
e
am
en
ded
or
r?n
um
bere
dj
att
rib
uta
ble
to
sto
ck
ho
lders
, eit
her
ind
ivi
jual
or
co
rpo
rate
, n
ot
su
bje
ct
to
Mo
nta
na
inco
me
or
licen
se ta
x und~r
Tit
le
15
, ch
ap
ter
30
o
r ch
ap
ter
31
, as
ap
pro
ori
ate
, o
n
the
gain
p
assin
g
thro
ug
h
to
the
sto
ck
ho
lders
pu
rsu
3n
t to
fe
dera
l la
w;
e~d
tiii
l_tb
a __
gai
D __
__ tb~ __
~ale_Qc_a~~baQ~_QI-a~aQLtgl
a~~et _
_ ~~~lUg~g _
__ tC
Qm
___
gCQ~ _
__ l~Qm~ _
__ u
ng
eC-_
_ ~uQse~tl2U
LIILbltlilLA1_~ben_gDe_Qt_tb~_~xeutS_ge~Libeg_1D-SUQs~tlQD
LllLblLlilL~l-QC~UC~-duciDg_tbe_ta~able_xeac&_aog
(b)
ex
clu
din
g
gain
&
Lil
re
co
gn
ized
fo
r fe
dera
l ta
x
pu
rpo
ses
as
a
share~older
of
a li
qu
idati
ng
co
rpo
rati
on
p
urs
uan
t to
-5-
1 2 3 4 5 6 1 B
9
10
11
12
13
14
15
16
11
18
19
20
21
22
23
24
25
" LC
08
11
/01
secti
o1
s
33
1
thro
ug
h
33
1
of
the
Inte
rnal
Rev
en
ue
Co
de
(as
tho
se
secti
on
s
may
b
e
am
en
ded
o
r re
nu
mb
ere
d)
wh
en
the
gain
is
r~quired
to
be
reco
gn
ized
b
y
the li
qu
idati
ng
co
rpo
rati
on
pursu~nt
to
su
bsecti
on
(l)
(a)(i
i)
of
this
section~_a~
Lill_LA1_tCQm_toe_~gle_Qc_eA~baD~_Qf_a _
_ ~a~ltal _
_ a~t
if£
__ w
itb
lD _
_ ll_mgDtb~_Qt_tbe_~gle_Qc_e~~bange£_tbe_~Q~eeQ~
Qt_tn~_~ale_Qc_e&kbaoge _
_ ~c
e _
_ ceiaxe~teg _
_ io
__
aa _
_ ~a~LQLi~
~itb~ L
!1 _
_ 22
1 __
Qc _
_ m
Qce
__
Qf_-1t~ _
_ ~a~£Qll-~ub!e~t-tQ-~QDtana
iD~gm~_t~~&_aag
Llll_221_QL_~QLe_Qf_lt~_ta~ble_iD~Qme_~~ble~t-_tQ_-the
ta~_imQQ~eg_bx_aitbec_~ba~tec_l2_Qc_lll
ial _
_ tb
e __
ba~i~_Qf_tbe_~a~ltal_a~~et_i~_~accl~fQc~aLQ
a~_to~_ba~i~_Qf_tb~_celQx~~tment£ _
_ aD
g __
an~ _
_ galD-_~ball _
_ ~
c~~QgDi~~g~
Lll
__ u
uan
__ tb
e __
~ale _
_ Q
c __ e~~baDge _
_ Qf_tbe_£eln~e~meot
~cQue[t~&
Llll~if_tbe_ta~uateL-b£log~-~a~b-QL-Qtbec-QLQ~ctt-~ut
gf_tba_eDteLucl~e_lo_~bl~b_tb~_iDxe~tment_i~_mag~
Lll
ll_
uQ
Qo
__ tb
e _
_ ~ale _
_ Q
c __
ex~baDge--Qf _
_ tbe_ta~atac!~
lotec~~t_1D_tbe_eutecnLi~e_in_~bi~b_tbe_iQ~e~tmeDt_1s__maa~
Q[
Ll~l_if _
_ tb
e __
QcQ~eos _
_ Q
f __ tb
e _
_ ~ale _
_ Qc _
_ ~khaQge~ce
iD~e~~ed_dice~tlt-Qc_1DdiLe~tlt-iD-£eal~cQ~eLtx·
(2)
Th
e tp
.rm
"n
pt
inco
me"
mea
ns
the
gro
ss
inco
me
of
-6
-
LC
08
11
/01
1 th
e
:~rporatlon
less
the
ded
ucti
on
s set
fort
h
in
15
-31
-11
4.
2 3
(3
)
1 i c
en
se
No
co
rpo
rati
on
tax
u
nle
ss
is
exem
pt
sp
ecif
icall
y
fro
m
the
co
rpo
rati
on
pro
vid
ed
fo
r u
nd
er
4 1
5-3
1-1
01
(3)
or
15
-31
-10
2.
Any
co
rpo
rati
on
n
ot
sUb
ject
to
or
5 li
ab
le
for
fed
era
l in
com
e ta
x
bu
t n
ot
exem
pt
fro
m
the
6 co
rpo
rati
on
li
cen
se
tax
u
nd
er
15
-31
-10
1(3
) o
r 1
5-3
1-1
02
7 sh
all
co
mp
ute
g
ross
inco
me
for
co
rpo
rati
on
li
cen
se
tax
~
purpos~s
in
the
sam
e m
ann
er
as
a co
rpo
rati
on
th
at
is
su
bje
ct
9 to
o
r li
ab
le
for
fed
era
l in
com
e ta
x
acco
rdin
g
to th
e
10
p
rov
isio
ns
for
dete
rmin
ing
g
ross
in
com
e in
th
e
fed
era
l
11
Inte
rnal
Rev
enu
e C
od
e in
eff
ect
for
the
tax
ab
le
year.
-
12
~f~_SftIlOti&
Secti
on
3
. E
ffecti
ve
date
13
ap
pli
cab
ilit
y d
ate
. T
his
act
is
eff
ecti
ve
on
p
ass
ag
e
and
14
ap
pro
val
and
ap
ol
ies
to
tax
ab
le
years
b
eg
inn
ing
aft
er
15
D
ecem
ber
3
1,
19
82
.
-En
d-
-7-
.. STATE OF MONTANA 410-83 REQUEST NO. ____ _
FISCAL NOTE Form BD·15
III In compliance with a written request received February 15, , 19 ~ , there is hereby submitted a Fiscal Note
.. III
..
III
iii
for House Bill 709 pursuant to Title 6, Olapter 4, Part 2 of the Montana Code Annotated (MCA). Background information used in developing this Fiscal Note is available from the Office of Budget and Program Planning, to members of the legislature upon request.
DESCRIPTION OF PROPOSED LEGISLATION:
House Bill 709 allows for the nonrecognition of capital gain when proceeds of sale or exchang~ are invested in a Montana enterprise; allows for the tax on the gain at a later date; and provides an immediate effective date and an applicability date.
ASSUMPTIONS:
1)
2)
3) 4)
Individual income tax collection projections are as stated by the Office of Budget and Program Planning for FY84 and FY85. Capital gains income is as indicated in the Montana income tax analysis for calendar year 1981 - $392,094,189. However, $180,509,639 is associated with filers who pay no tax. Capital gains income will remain constant in FY84 and FY85. The effective tax rate for Montana taxpayers that have capital gains income is ~
~·5) 6.25% (1981 Montana actual) for FY84 and FY85. At most, 20% of the net capital gains income is reinvested according to the criteria of this proposal.
lit
IiII
.. :
..
FISCAL IMPACT:
Total Revenue from Individual Income Tax Collections
Under Current Law Under Proposed Law Estimated Decrease
General Fund Under Current Law Under Proposed Law Estimated Decrease
FY84
$166.427M 163.782M
(2.645M)
106.513M 104.820M
(1.693M
Continued
1R
FY85
$175.459M 172.814M
(2.645M)
112.294M llO.601M
(l.693M
BUDGET DIRECTOR Office of Budget and Program Planning
Date: 2 - I t - 8'.J
2
FY84 FY85
School Equalization Under Current Law $41.607M $43. 865M Under Proposed Law 40.946M 43.204M Estimated Decrease (.66IM) L661M)
Sinking Fund Under Current Law 18.307M 19.300M Under Proposed Law 18.016M I 19.010M Estimated Decrease (.29IM) (.290M)
FISCAL NOTE 15:C/2
,
48
th
Leq
lsla
ture
LC
lZ
53
/01
1 Z
3 It
5 6 1 8 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
~
BY ~ -
BIL
L
NO
. J!
M
-------~------
--
INTR
OO
UC
ED
A B
ILL
FOR
AN
ACT
E
NT
ITL
ED
: -A
N
ACT
TO
STIM
ULA
TE
ECO
NO
MIC
DEV
ELO
PMEN
T IN
M
ONTA
NA
BY
PRO
VID
ING
EC
ON
OM
IC
INC
EN
TIV
ES
FOR
NEW
Oc
t EX
PAN
DIN
G
BU
SIN
ESS
ES
CR
EATI
NG
"'lE
W
J08
S
IN
ItON
lAN
A;
AM
END
I:IIG
SE
CTI
ON
1
5-3
5-1
08
, M
CA;
AND
PRO
VID
ING
AN
APP
LIC
AB
ILIT
Y
DA
TE
.-
BE
IT
ENA
CTED
BY
TH
E LE
GIS
LATU
RE
OF
THE
STA
TE
OF
MO
NTA
NA
:
MfW-SftIlD~a
Secti
on
1
. P
urp
ose
--
new
jo
b
defi
ned
.
(I)
Th
e p
urp
ose
o
f [s
ecti
on
s
1 th
rou
gh
7]
is
to
en
co
ura
ge
the cre
ati
on
o
f ne
w
job
s In
M
on
tan
a w
ith
ou
t ad
vers
ely
aff
ecti
ng
th
e sta
te's
re
ven
ues.
(Z)
Fo
r p
urp
ose
s o
f [s
ecti
on
s
1 th
rou
qh
1
J,
Mne
w
job
-
Mea
ns
a p
erm
an
en
t full-tl~
po
sit
ion
tn
M
on
tan
a th
at
was
n
ot
in ex
iste
nce
on
[t
he eff
ecti
ve d
ate
o
f th
is act]
an
d th
at
is
cre
ate
d
becau
se o
f a
new
o
r ex
pan
ded
b
usi
ness
.
~~W_SftIlO~a
Secti
on
2
. F
inan
cia
l In
cen
tiv
es
for
job
cre
ati
on
. A
n in
div
idu
al,
co
rpo
rati
on
, p
art
ners
hip
, o
r s.a
ll
bu
sin
ess
co
rpo
rati
on
, as
defi
ned
In
1
5-3
1-2
01
, th
at
sta
rts
a
new
b
usi
ness
o
r ex
pan
ds
an ex
isti
ng
b
usi
ness
m
ay
ch
oo
se
fro
m
the
foll
ow
ing
fi
nan
cia
l In
cen
tiv
es
for
cre
ati
ng
ne
w job~:
(1)
a ta
x cre
dit
as
pro
vid
ed
in
[s
ecti
on
3
];
(21
a
gra
nt
as
pro
vid
ed
in
fs
ectl
on
6
J;
or
1 2 3 4 5 6 7 8 9
10
11
12
n 14
1')
16
17
18
19
ZO
21
22
23
24
25
LC
lZ5
3/0
1
(3)
an
In
tere
st
pay
Men
t o
ffset
as
pro
vid
ed
In
[s
ecti
on
7].
~~W_SftIlQ~a
Secti
on
3
. N
ew
job
cre
dit
. (1
) S
ub
ject
to
[secti
on
2
],
an
Ind
ivid
ual.
co
rpo
rati
on
. p
art
ners
hip
. o
r
small
~uslness
co
rpo
rati
on
. as
defi
ned
In
1
5-3
1-2
01
. th
at
sta
rts
a ne
w
bu
sin
ess
o
r ex
pan
ds
an ex
isti
ng
b
usin
ess.
there
by
cr,
atl
ng
ne
w jo
bs,
as
defi
ned
In
[s
ecti
on
1
].
is
en
titl
ed
to
a
tax
cre
dit
ag
ain
st
the
tax
I.
po
sed
b
y
15
-30
-10
3 o
r 1
5-3
1-1
21
. in
an
am
ou
nt
eq
ual
to
Z5~
of
the
tota
l sala
ries
of
the
new
jo
bs
for
the fir
st
year.
to
b
e
tak
en
as
a cre
dit
o
nly
ag
ain
st
tax
es
du
e as
a co
nse
qu
en
ce o
f
tax
ab
le o
r n
et
Inco
.e
dir
ectl
y
att
rib
uta
ble
to
th
e
new
bu
sin
ess
o
r b
usi
ness
ex
pan
sio
n.
~~W_SftllDHa
Secti
on
4
. C
arr
yo
ver
of
cred
it.
Th
e ta
x
cre
dit
all
ow
ed
u
nd
er
[secti
on
3
] is
to
b
e d
ed
ucte
d
fro
m
the
tax
pay
er'
s
tax
li
ab
ilit
y fo
r th
e ta
xab
le
ye
ar
In
wh
ich
th
e
new
b
usi
ness
o
r th
e ex
isti
ng
b
usi
ness
as
ex
pan
ded
b
eg
ins
operation~_
If
the
a.o
un
t o
f th
e
tax
cre
dit
ex
ceed
s th
e
tax
oav
er"
s ta
x li
ab
ilit
y fo
r th
e ta
xab
le
year.
th
e
amo
un
t
that
exce~ds
the
tax
li
ab
ilit
y
may
b
e carr
ied
o
ver
for
cre
dit
ag
ain
st
the ta
xp
ay
er'
s
tax
li
ab
ilit
y
In
the
nex
t
succeed
ing
ta
xab
le
year
or
years
u
nti
l th
e to
tal
amo
un
t o
f
the
t3X
cre
dit
h
as
bee
n
ded
ucte
d
fro
m
the
tax
li
ab
ilit
y.
Ho
wev
er.
no
cre
dit
M
ay
be carr
ied
b
eyo
nd
th
e
sev
en
th ta
xab
le
year
succeed
inq
th
e
tax
ab
le
year
in
wh
ich
th
e
job
s w
ere
N T
RO
D U
C E
D
B I
LL
-2
-
1 2 3 • 5 6 7 8 9 10
11
12
13
14
15
16
11
18
19
20
21
22
23
24
25
lC
12
53
/01
cre"t.~d.
~EW_SEtIlQ~&
Secti
on
5
. E
xclu
sio
n
of
oth
e ...
tax
incen
tiv
es.
If
a ta
x
c ... e
dit
Is
cla
ille
d
un
de
... [s
ectl
.on
. 3
).
no
oth
e...
ta
x
c ... e
dit
m
ay
be
cla
imed
in
... e
lati
on
to
th
e
saM
e
job
-cre
ati
ng
b
usin
ess.
HfW_SEtIl~&
Secti
on
6
. G
... an
ts
fo ...
job
c
... eati
on
•. (1
)
Su
bje
ct
to
[secti
on
2
].
an
Ind
ivid
ual.
co
... p
o ... ati
on
.
pa
... tn
e ... sh
lp.
or
sMal~
bu
sin
ess
cQ ...
po
... atl
on
. as
defi
ned
In
15
-31
-20
1.
that
sta
rts
a
new
b
usin
ess
0'" e
xp
an
ds
an.
ex
i.st
lng
bu
sin
ess
Is
en
titl
ed
to
a
Sl.
00
0
g ... an
t fo
... each
ne
w jo
b.
c ... eate
d.
(2)
Th
e g
... an
t M
ay
no
t b
e cla
imed
fo
r m
o ... e
th
an
1
00
ne
w
job
s.
an
d
the to
tal
g ... a
nt
may
n
ot
ex
ceed
th
e ~ount
of
tax
ab
le
Inco
me
dl
... ectl
y att
rib
uta
ble
to
th
e
new
b
usin
ess
or
bu
sin
ess
ex
pan
sio
n.
(3)
Th
e g
... an
ts
Mu
st
be ad
mln
iste
... ed
b
y th
e
dep
a ... ta
en
t
of
com
me .
.. ce
an
d
a ... e
p
ay
ab
le
f ...
oM
co
al
sev
e ...
an
ce ta
x
fun
ds
all
ocate
d to
th
e
dep
a ...
tmen
t fo
... th
at
pu
... p
ose
.
~EH_SEtIlg&a
Secti
on
7
. In
te ... e
st
off
set.
S
ub
ject
to
[secti
on
2J
. an
In
div
idu
al.
co
rpo
... ati
on
. p
art
ne ... sh
ip.
0'"
small
b
usin
ess co
rpo
rati
on
th
at
sta
... ts
a ne
w
bu
sin
ess
0
...
ex
pan
ds
an
ex
isti
ng
b
usin
ess
Is e
nti
tled
to
an
o
ffset
of
on
e-f
ou
... th
In
te ... est
po
int
for
ev
e ...
y 1
0
new
jo
bs
cre
ate
d.
up
to
a m
axim
um
of
4 In
te ... est
po
ints
. ag
ain
st
any
fi
nan
cin
g
ob
tain
ed
f
... om
th
e sta
te fo
... p
... o
jects
q
uali
fyin
g
and
fi
nan
ced
-3-
.1 2 3 ,. 5' 6 7 8 9
10
11
12
.
13
14
15
16
17
18
19
20
21
22
23
z.
25
LC
12
53
/01
un
der
[LC
ll
lt8
] •.
Secti
on
8
. S
ecti
on
1
5-3
5-1
08
. M
CA
. Is
am
end
ed
to
read
:
15
-35
-10
8.
(Eff
ecti
ve
Ju
ly
1.
19
83
) D
isp
osa
l o
f
sev
e ...
an
ce
tax
es.
Seve~ance
tax
es
co
llecte
d
unde
...
the
pro
vis
ion
s o
f th
is
ch
ap
te ...
are
all
ocate
d as
foll
ow
s:
(1)
To
th
e
t ... u
st
fun
d
c ... eate
d
by
A
... ti
cle
IX
, se~tion
,,5
. o
f th
e
Ho
nt.
an
a.c
on
s.tl
tutl
on
, Z5~
of
tota
l co
llecti
on
s
a
yea ...
. A
fter
Dec
emb
e ...
31
. 1
91
9.
50~
of
co
al
sev
era
nce
tax
co
llecti
on
s
a ...
e all
ocate
d to
th
is
t ... u
st
fun
d.
Th
e t
... u
st
fun
d
mo
ney
s sh
all
b
e
dep
osi
ted
in
17
-6-:
2J3
J5)
and
In
vest
ed
b
y
the
.p~ovided
by
la
ve
the
fun
d
esta
bll
sh
e9
u
n d
e ...
bo
ard
o
f in
vesta
en
ts
as
(Z)
Co
al
sev
e ... a
nce
tax
co
llecti
on
s
... em
aln
lnq
aft
e ...
all
ocati
on
to
th
e
all
ocate
d
In
the
bala
nce:
t ... u
st
fun
d
unde
...
su
bsecti
on
(1
) a
... e
foll
ow
ing
p
erc
en
tag
es
of,
the
... em
aln
lng
Ca)
to
th
e
co
un
ty
in
wh
ich
co
al
Is
min
ed
. 2~
of
the
sev
e ... an
ce
tax
p
aid
o
n
the
co
al
min
ed
In th
at
co
un
ty u
nti
l
Jan
ua ...
y 1
. 1
98
0.
fo ...
su
ch
p
u ... o
ose
s as
the
go
ve
... n
ing
b
od
y
of
the
co
un
ty
may
d
ete
....
lne;
(D)
Z l/Z~
un
til
Dec
embe
...
31
. 1
97
9.
an
d th
e ... eaft
e ...
~-~f~ '-Ll~l
to th
e ea ..
.. a
... k
ed
... ev
en
ue
fun
d
to th
e
c ... ed
it o
f
the
31
te ... n
at
I ve
en
e ...
gy
... ese
a ...
ch
d
ev
elo
pll
len
t an
d
deM
On
st ...
ati
on
acco
un
t;
(el
26
1/2~ u
nti
l Ju
ly 1
. 1
97
9.
and
th
ere
aft
e ...
37
1
/2*
-4
-
1 2 3 4
·5
6 1 6 q
1.0
11
12
13
14
15
16
11
18
19
LC
12
53
/01
to
the
ear.
ark
ed
re
ven
ue
fun
d
to th
e cre
dit
o
f th
e
local
imp
act
and
ed
ucati
on
tr
ust
fun
d
acco
un
t;
(d)
for
each
o
f th
e
2 fi
scal
years
fo
llo
win
g
Jun
e
30
.
19
71
. 1
3*
to
th
e ear.
ark
ed
re
ven
ue
fun
d
to th
e cre
dit
o
f th
e
r.o
al ~rea
hig
hw
ay
i.p
rov
em
en
t acco
un
t;
(el
10
*
to
the
earm
ark
ed
re
ven
ue
fun
d
for
sta
te
eq
uali
zati
on
aid
to
p
ub
lic sc
ho
ols
o
f th
e s
tate
;
(f) l'
to th
e
earm
ark
ed
re
ven
ue
fun
d to
th
e cre
dit
o
f
the
co
un
ty
lan
d
pla
nn
ing
acco
un
t;
(gl
.1 1
/4'
to
the
Sin
kin
g
fun
d to
th
e cre
dit
o
f th
e
ren
ew
ab
le
reso
urc
e
dev
elo
pft
nt
bo
nd
acco
un
t;
(h)
5'
to th
e
ean
lla.
rked
re
ven
ue
fun
d
to
the cre
d i
t o
f
a tr
ust
fun
d
for
the
pu
rpo
se
of
par~s
acq
uis
itio
n o
r
manage~ent,
pro
tecti
on
o
f w
ork
s o
f art
In th
e sta
te cap
ito
l,
and
o
ther
cu
ltu
ral
and
aesth
eti
c
PfO
jectS
. In
cDm
e fr
OID
th
is
tru
st
fun
d
sh
all
b
e
ap
pro
pri
ate
d as
foll
ow
s:
(i)
1
/3 fo
r p
rote
cti
on
o
f w
ork
s o
f art
in
th
e
sta
te
cap
ito
l an
d
oth
er
cu
ltu
ral
and
aesth
eti
c p
roje
cts
; an
d
(I I
, 2
/3
for
the
acq
uis
itio
n
of
sit
es
and
are
as
20
d
escri
bed
in
2
3-1
-10
2
an
d t~e o
pera
tio
n
and
.a
inte
nan
ce
of
21
sit
es
so
acq
uir
ed
;
22
!i,
l'
to th
e
earm
ark
ed
re
ven
ue
fun
d to
th
e cre
dit
o
f
23
th
e sta
te
lib
rary
co
mm
issi
on
fo
r th
e
pu
rpo
ses
of
pro
vid
ing
24
b
asic
li
bra
ry
serv
ices
for
the
reS
iden
ts
of
all
co
un
ties
25
.throucr~
lib
rary
fe
dera
tio
ns
and
fo
r p
aym
ent
of
the co
sts
o
f
-5-
1 2 3 It
5 6 1 8 q
10
11
12
13
lit
15
16
1'1
LC
12
53
/01
part
iCip
ati
ng
in
re
gio
nal
an
d n
ati
on
al
netw
ork
ing
;
(J)
1/2
o
f l'
to
the
earm
ark
ed
re
ven
ue
fun
d
for
co
nserv
ati
on
d
istr
icts
;
(k)
1 1
/4'
to th
e sin
kin
g fu
nd
to
th
e
cre
dit
o
f th
e
wate
r d
ev
elo
pm
en
t sin~ing
acco
un
t;
lll __
~_li~l_1g-tb~_~aL~-LeKeQuc-fund-t~~~
gf _
_ tb~ _
_ deQa~tment_~f _
_ ~gmme~~-fQL_~LPQ~Gi-.akiQg Q~
jg~s-a~aQts_AS_Q~gxlded-1Q_L~1LgQ-6J4
t.tL
ml
all
o
ther
rev
en
ues
fro
. se
vera
nce
tax
es
co
llecte
d
un
der
the
pro
vis
ion
s
of
this
ch
ap
ter
to th
e cre
dit
of
the
qen
era
l fu
nd
o
f th
e sta
te.-
~EH_SftIlO~&
Secti
on
q
. C
oo
rdin
ati
on
In
str
ucti
on
. If
81
11
N
o.
[LC
11~8J
Is
no
t p
ass
ed
b
y
the
48
th
leg
isla
ture
an
d
ap
pro
ved
b
y
the
go
vern
or.
secti
on
7
an
d
su
bsecti
on
3
of
secti
on
2
are
v
oid
.
~EW_SE~IID~&
Secti
on
1
0.
Ap
pli
cab
ilit
y.
Th
is
act
is
ap
pli
cab
le
for
tax
y
ears
b
eg
inn
ing
afte
r
Dec
emb
er
31
. 1
98
3.
-En
d-
-6
-
..
..
-STATE OF MONTANA REQUEST NO.
486-83
FISCAL NOTE ..., Forni H/)'15
February 20, 83 In compliance with a written request received , 19 __ , there is hereby submitted a Fiscal Note
for House Bill 865 pursuant to Chapter 53, Laws of Montana, 1965 - Thirty-Ninth legislative Assembly.
Background information used in developing this Fiscal Note is available from the Office of Budget and Program Planning, to members
of the Legislature upon request.
DESCRIPTION OF PROPOSED LEGISLATION:
House Bill 865 stimulates economic development in Montana by providing economic incentives for new or expanding businesses creating new jobs in Montana; and provides an applicability date.
FISCAL IMPACT:
The fiscal impact of the new job tax credit cannot be estimated for the biennium, although it could significantly decrease corporation license and individual income· tax revenues. The tax credit of 25% of the total salaries would take several years of tax payments by the new job holder before the tax credit would be offset .
The grant program would receive 1.125% of coal severance tax revenues. This would amount to $1.110 million in FY 84 and $1.384 million in FY 85. The alternative """"
~energy research development and demonstration account would be decreased by the same amounts.
FISCAL NOTE 15:EE/1
,dee 1 1 '
BUDGET DI R'ECTOR
Office of Bwdget and Program Planning
Date: 2 ... 2. "'2, - U
-
STATE OF MONTANA 288-83 REQUEST NO.
FISCAL NOTE Form 8D-15
January 31, 83 In compliance with a written request received , 19 __ , there is hereby submitted a Fiscal Note for Senate Bill 316 pursuant to Chapter 53, Laws of Montana, 1965 -Thirty-Ninth Legislative Assembly. Background information used in developing this Fiscal Note is available from the Office of Budget and Program Planning, to members of the Legislature upon request.
DESCRIPTION OF PROPOSED LEGISLATION:
Senate Bill 316 helps farmers and ranchers obtain credit at lower interest rates for agricultural purposes; creates the Montana Agricultural Loan Authority; and provides for legislative review.
ASSUMPTIONS:
1)
2)
",·3) 4)
5)
6) 7) 8) 9) 10)
There will be 115 beginning farmers, each of which will purchase agricultural land in parcels of nG less than 80 acres at 9% or less interest on a long-term contract. Each of these transactions will be approved by the Montana Agricultural Loan Authority. The average taxable income of each of the land sellers of assumption 1 without the proposed income tax deduction is $9,000, which is less than or equal to the realized annual gain from the sale of the land. The effective ta~ rate for Montana taxable income of the land sellers is 6.28%. The Office of Budget and Program Planning projection of income tax receipts for the 1984-1985 biennium is the basis for comparison. Agriculture loan authority members (8 persons) would hold a minimum of 4 meetings annually, with average total distance each meeting of 400 miles per member. Agriculture loan authority members hold meetings in Helena. Mechanics of bond issue and sale operations be contracted out. 2 FTE required to assist in administration of act as directed by "authority". Administrative costs based on percent of personal services. Act become effective October, 1983.
FISCAL IMPACT:
Expenditures:
Personal Services Operations Equipment Administrative Costs
FY 84
$ 53,195 32,994 3,500 8,280
$ 97,969
Continued
FY 85
$ 53,195 37,600
250 8,280
$9G~lliL BUDGET DIRECTOR
Office of Budget a~ PrOj!am Planning -..,; Date: 2 - 0 - " ':5
II'
-2-
Revenue:
Individual Income Tax Collections Under Proposed Law $166.427M Under CUrrent Law 166.362M Estimated Decrease $ ~.0~5M)
General Fund Under Proposed Law $106.513M Under Current Law 106.471M Estimated Decrease $ ~.042M)
School Foundation Program Under Proposed Law $ 41.607M Under Current Law 41. 591M Estimated Decrease $ COIE)M)
Sinking Fund Under Proposed Law $ 18.307M Under Current Law 18.300M Estimated Decrease $ L007M)
COMMENT:
Section 23 of this bill affects the income tax as follows:
$175.459M 175.394M
$ (.065M)
$112.294M 112.252M
$ (.042M)
$ 43.865M 43.849M
$ L016M)
$ 19.300M 19.293M
§ (.OO7M)
"A landowner who sells land consisting of 80 acres or more to a beginning farmer at 9% or less interest on a long-term contract is entitled to a reduction in his taxable income in an amount equal to 100% of any income or capital gain, or both, realized and otherwise subject to state income taxes from the sale, up to a maximum of $50,000, provided the transaction is first approved by the authority for this purpose."
FISCAL NOTE 10:BB/2
.. -
-.. -
,.-.
b ~J -,-~4-cA:> sdl. -r~
bu.~ HT C,orf. A sdQ kT C'O .... r. A
hu.~ \)~ ?o~-l
c)~V~~6~t
bl.\ (s t--\,-~ r,
s~ f-A-T ~r,
tl Z sJ q,,~
Z.S'tU~b
EXHIBIT A
"'" ~r, 10~ ~fc~~ -
-'-' 6"'6 ---. c.)(.~ V\.. ~ 30, <rot)
- s~ ~~~ ~ \fo) crr~ -
\'14~ tv\T ~c. ~ '-l () I crrl> -sell MT~C. $1 L{SI a-ro
.. bu.d t-'\T ~'D '2,,) ,)'0-0
...
. /
"-House Bill 709
This bill provides for rostponin~ the income tax on gains from
the sale of property. The gain would not be taxed if the monies
received from the sale are placed in an enterprise with its prin-
cipal business activities ln Montana. Nhen the taxpaver sells
or removes his investment in the enterprise the qain is then
taxed. I ,~( ; i
While the bill seems straightforward, it leaves many technical
questions unanswered. For purposes of Montana individual and
corporate income taxation of gains, the Federal laws are con-
trolling. It is, therefore, necessary to have the provisions
of this bill fit with the federal laws on taxation of qains.
As proposed this bill doesn't make a clean connection between
federal and state law.
The following are nroblem areas the bill doesn't adeauately
address:
1. The bill allows for postnonement of taxation on qalnS
from the sale of capital assets, but doesn't define can-~_._---".-._.- ---_ . .::.... __ . __ .- _. --
ital assets. For federal tax purooses caoital assets
are non-depreciahle proper tv such as nersonal residents
and cars, Good ~i~l, securities, etc.
2. ~~ore than one rnll1Vec:~tment to nost-oon(' a qaln is not
sllecificcill"
have morc, th,li.
not be taxceJ «1 :~110 same tiPlr' hv t'le:' sLlt(~.
I t- l'll!'
EXHIBIT B
T he.... to/- rl't en t e y r' yt5 e..
cL efttlej - -1-5 tJ,~ t J,n
Co y f 0 f"d t ;)'" -1'" te/' Ire te !
or Cou 1/
5:wmm,";)41-J. ~. nv.mW CJf ~;.d5 aJht!A'e tie 1,;/1 (.I
_ (;{Jt1 c /-e~V _ ~·--;;U~-----'J-r~-.--1rro"E=' c er 't-:.;" how h "-,) rlm;/1. (-s i't--' ;t:>
)j;lJ Ii / , r e 1 w; y ~
IV";h1 S --;) c t ; ;n )
t"f';J c K r-1f of we UJJulJ Ylo r k
-0;1, If:.- (t, ~
6 c () J1 om I' ( e f--t:ec. f.s,
/. AU lWJefel (;, rdwtll ~t'N /a~.;/
7A~ ei/; je4(c~ f~{)rh st-u/;e3 - iz//(':Jips eve dr' h cia /1-d f
el'71,rt'rl-C:~ I ti~;-" J,~/e
u/Vylc- Cd e J(
"-·state would be using a different procedure for recognizing the
gain.
011 f;J'jt: 1; I/"nes ~{7 fk lil1 st7J"t-e ti-;d-nOl{e of the J";;};/l .. ·wfdc/l~;/I4.J to fl.l~k~
fOr t.,r e XM"f t $ t, tus / ( ~ be /. ves t-el 01. ',ed I;,.. 01" (fl J,'nut/r i", re-;;» €shie ~ ~ cnH;7(e,r~/(e (" ;r~ i'~':~ /J 'I' t~f ,1 re ,tt ;v' -I~Y hrl j ~e ,,-fol''''''' 1/
/t ;5 Lutc/e~r ~ l)t~ ;p (jj thE' t~l'r~ye;-
d de.l'7J4fl?1~.t" ,t w/'"d t tJ/1.(! h';) 'h direct Orl AQ"e
cia to 'J(jtJ(-J r\ ,·/(vesfrn&11f.s /'\ re~(
f YO /-U t 1 Q Pre Sv. rr/":J LI; I tile /'1 f:-~ t4 f (5' to
;/IVc~t/11e;?f5 (/l )1dlft~7:- )..,t-o r"/lt"SSe'j UI'/e.. rP t~6.#f} I?fPt/tJI /6' h (tArl-JO)t .st{)('k /pr d
/'1dnf;Jl1~ bv..f.,·ttt"-;'P., i'<-fi /:'7 fl-1.Hh-;;O'":;,(·;1) (fcJck
tit (! (,:))1 f,-( ~ jl,(J;t~j -;;)5 '~ll/(," tr'~ I~h ,re"~! eJfv'/-p-
ftJ]tt (-.> t1.oi cje~f I..ow '0 tv-//7~tr CJ/l t77J4~ r1.(:(.11~( ~)vl..c.(-M.S5 /I/V, t /J1.."f'Pf 'tk-v'i- re 11-{;"€.-#rE"'I'fI,
wet i> cI '( g J I fc) 1../': tk' 5 0 r /1 dr.? Ir(!. UJ (- / f t~r/~-el ';; -r
( 11 vest ,7le:.A {s tll~
-f (2 C • \ I i.ec k d
1,"/ .... )1'< , ,{ 1
/.J ",I k / e '9"1;
'J J t/)1 (' :' r"J tr~ f,.1i'e.. ~ (/, VI? S i r?1 e/l1 t /',>
STATEMENT OF INTENT RE: SB3l6
Section 1. It is the specific intent of the Legislature that the Montana Agricultural Loan Authority should operate in the same manner that the Iowa Loan Authority has operated for the last 13 months in the state of Iowa. Each loan is processed individually by a bank or other financial institution. The loans can be for farmland acquisition or for purchase or construction of depreciable property (farm equipment or farm buildings). The bank or other financial institution initially approves the loan and agrees to accept the credit risk. It then sends an application to the Montana Agricultural Loan Authority for approval. If the loan is approved, a bond is issued by the Montana Agricultural Loan Authority in the exact amount and the money is made available to fund the loan.
Thus, the entire transaction is treated identical with any other bank loan to a farmer except that the bank or other financial, institution is able to obtain municipal bond tax exemption'for the interest income. The bank or other financial institution loan is, in effect, converted to a municipal bond and held in the bank's municipal bond tax exempt portfolio.
Section 2. It is the intent of the Legislature that the Montana Agricultural Loan Authority created by this bill will not make direct loans. They will acquire existing loans already made and approved by a local financial only. It is also the specific intent of the Legislature that the State of Montana would have no financial risk on any of these loans. Whoever purchases the bonds will take the full risk that the loan that secures payment of each bond will be repaid.
Section 3. It is the specific intent of the Legislature that the Montana Agricultural Loan Authority would charge a one time fee for issuing the bonds which fee shall not exceed the maximum amount authorized by the federal internal revenue code with regard to tax exempt bond issues. It is the intent of t~Legislature that the fee would be sufficient to pay the cost of bond counsel to review and approve each bond issue and all other administrative costs of the Montana Agricultural Loan Authority.
Section 4. This Statement of Intent is required by the rule making authority granted to the Montana Agricultural Loan Authority in Section 4 and Section 8. Furthur, rules are contemplated for determining the procedure for granting approval by the Montana Agricultural Loan Authority and the procedure for verification by the Department of Revenue under Section 23.
EXHIBIT C
Section 5. It is the intent of the Legislature that the Montana Agricultural Loan Authority adopt rules for the orderly handling and processing of applications under the authority granted in this Act to issue bonds secured by farm loans. The rules under Section 8 are intended to be sufficiently specific to allow for an objective determination by the Montana Agricultural Loan Authority of which applicants should receive approval of farm acquisition bonds from the authority. The same criteria should be established by rule for depreciable property loans with special emphasis on the need of the applicant and the applicant's possible prospects for success.
Section 6. The criteria for determining a bonafide beginning farmer in connection with the approval of the tax credit application by retiring farmers as provided in Section 23 shall be established by rule. The same requirements for establishing eligibility under Section 8 should be used under Section iJ.
•
..
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_1- IlehMfit S;;t:>kt 110y, /VtO"f-a"4 5"fY)1
_ 2.-
EXHIBIT D
Ma rch 15, 1983
Testimony presented by
Keith Kelly Director, Montana Department of Agriculture
on Senate Bill 316
Beginning Farmers Loan Bill
before the
House Select Committee on Economic Development
For the record my name is Keith Kelly. I am the Director of the
i; Montana Department of Agriculture. I maintain offices in the Agriculture/
Livestock Building at 6th and Roberts Streets in Helena.
The family-owned farm has been a way of 1 i fe in Montana si nce
Territorial days.
An extremely productive unit, it now produces sufficient food to
feed the farmer and 77 other people in the United States and around
the world.
Since 1950 the number of farms in Montana anti the rest of the U.S.
had declined significantly. In ~1ontana alone the number of farms has
dropped by 35.5 percent from 37,200 to 24,000. But, during this same
thirty-year period, the size of the average farm has increased 48 percent.
Obviously, farms are becoming larger, which is an indication that the
opportunity for corporate expansion in agriculture is increasing.
The top 20 percent of all farms by sales, accounted for four out
of every five dollars of food and fiber produced in 1978. Many of the
smallest farms are homesites for families living reasonably well on a
combination of farm and non-farm income. But the problem develops as
we put more and more pressure on the "disappearing middle," the group
of medium-sized places between the big operations and the part-time farm.
EXHIBIT E
Page 2 Kelly - Testimony - S.B. 316
What is more, about 70 percent of those who owned farm land in 1978
were over 50 years old. Land will b~ changing hands in the next few
years, so now is the time when we should be thinkinq hard about the
direction we want to go.
In the Initiative 95 process, agriculture was not fully addressed.
This bill complements that process~ not only enhancing agriculture but
creating jobs and preserving rural communities. It is a proven fact
that several smaller farms contribute more to the local community than
one large corporate farm.
What better way to Build Montana than through its basic resource,
agriculture? Family-owned and operated farms have given us the most
abundant:, efficiently-produced supply of food in recorded history.
We1ve all heard of, had friends who have experienced, or experienced
ourselves, the following situation:
A grandfather homesteaded and spent his life building an economically
viable operational unit. Better known as a family farm. When grandfather
passed away the farm was divided five ways among his heirs. One-fifth
of the farm is not a viable unit unless combined with the other four-
fifth1s. However, even if four family members were interested in selling
the farm to one member, the potential family purchaser could not meet
the land payment and interest expense, on a fair market price, out of
the likely cash receipts. The result - one neighbor with a larger operational
unit is seeking land for his two sons, wants to buy, and can pay the
price. A few miles down the road, a foreiqn industrialist owns almost
17,000 farm acres~ wants to buy, and the pressure is on family members
to sell to outside interests.
Page 3 Kelly - Testimony - S.B. 316
Or what about the dad who wants to retire but can't afford to sell
to his son because:
a. Dad needs sufficient land payment income to pay his capital
gains taxes while providing for retirement living expenses; and
b. Son can't purchase land, meet interest expenses, and still produce
sufficient income to live on.
Again, the only viable economic solution is to sell to outside
interests.
We all see the need for financial assistance to the beginning farmer.
Acknowledging c this need I support Senate Bill 316.
Administratively, from the Department of Agriculture's perspective,
we request that page 2, line 12, be amended to read nine members,
appointed by the governor, and adding section 2(g) after line 22, iden
tifyinq the ninth member as the Director of the Department of Agriculture.
I believe the Di rector shoul d be a member of the loan authority to provide
for proper administration of the program in the Department.
( If Women Involved In Form Economici ..r....-_______ ---......
NAI'IIE J 0 BRUNNER BILL NO. SB 316
ADDRESS 563 3rd ST HELENA DATE March 15, 1983
REPRESENT WOMEN INVOLVED IN FARM ECONOMICS
SUPPORT ____ ~X _____________ OPPO!E __________ ~AMEND ______ +
COMMENTS.
Mr. Chairman, members of the committee, my name is Jo Brunner and I represent the members of the Women Involved in FarmEConomics Organiza Although our organization supported the bill introduced and then kill in the 1981 Legislative session concerning this matter, we are very supportive of the simplification and the updating of certain portions of' this legislation that would enable agriculture families, willing t
work, and to go into debt to obtain financial backing for their agriculture endeavors. We appreciate that these loans could be used for the purchase of mach· er probably our single most costly expenditure, or to build facilities necessary to the individual operation,or to purchase land. We areappreciative that the procedure to obtain this financial backin has been simplified, but has not weakened either the structure produc· g
the monies, or the evaluation of the applicants. We are especially encouraged to see that the applicant must delcare h·s intention to live in Montana during the length of the loan, and shoul the recipient decide to cease the operation, the loan must be paid in full. We beleive that Section 23 allowing the tax relief for thos selling land to the recipient could be increased to some extent. We can see that the sellwe with land valued for sale at $800 or $1,000 per acre might not get all that excited about a $50,000 tax break if it were offered. Thank you.
EXHIBIT F ____________ "Hell has no fury like a woman scorned" ___________ -'
MR. CHAIRMAN, MEMBERS OF THE COMMITTEE:
I APPRECIATE THE OPPORTUNITY OF BEING ABLE TO TESTIFY ON BEHALF OF
SENATE BILL 316, WHICH WOULD HELP MONTANA FARMERS AND RANCHERS OBTAIN CREDIT ov\
AT LOWER INTEREST RATES, PROVIDE FOR INCOME TAX DEDUCTION ~ CERTAldLAND
SALES TO BEGINNING FARMERS, AND CREATE THE MONTANA AGRICULTURAL LOAN AUTHORITY.
I REPRESENT COMMUNICATING FOR AGRICULTURE, A NATIONAL, NONPARTISIAN,
NONPRO~'IT, RURAL ADVOCACY ORGANIZATION WITH MEMBERS IN 46 STATES. IN THE PAST
YEAR, MONTANA HAS BECOME ONE OF OUR FASTEST-GROWING STATES.
CA'S GOALS ARE DETERMINED BY ITS MEMBERS THROUGH RESOLUTIONS AND
SURVEYS, AND ONE OF OUR MAIN MEMBER-DIRECTED ACTIVITIES INVOLVES THE SUPPORT
OF STATE PROGRAMS WHICH COULD HELP BEGINNING FARMERS AND RANCHERS GET STARTED. \.
SINCE 1980, LEGISLATURES HAVE CREA'rED SUCH PROGRAMS IN MORE THAN A
DOZEN STATES. ALTHOUGH IMPLEMENTATION OF MANY OF THESE PROGRAMS WAS DELAYED
FOR A TIME BECAUSE OF UNCERTAINTY ABOUT POTENTIAL FEDERAL RESTRICTIONS, THAT
UNCERTAINTY HAS NOW BEEN CLEARED, AND MOST OF THE PROGRAMS ARE NOW EITHER
UNOc.:HWAY Oil GE'l"l'lNG UN1.lc.:UWAY.
I
THE MONTANA AGRICUL'l'URAL LOAN AUTHORITY, WHICH WOULD BE CREATED BY 'rHE
PASSAGE OF SENATE BILL 316, WOULD BE MODELED AFTER THE IOWA FAMILY FARM
DEVELOPMENT AUTHORITY, WHICH IS ONE OF THE MOST SUCCESSFUL BEGINNING FARMER
PROGRAMS IN THE NATION.
ORIGINALLY CREATED IN 1980, THE IOWA AUTHORITY WAS FOR A TIME STALLED,
EXHIBIT G
BUT THEN WAS REDESIGNED TO ALLOW PARTICIPATING FINANCIAL INSTITUTIONS TO MAKE
LOANS TO BEGINNING FARMERS ON A ONE-TO-ONE BASIS WITH FUNDS GENERATED FROM THE
SALE OF TAX-EXEMPT INDUSTRIAL REVENUE BONDS.
THE REVISION ALLOWED THE IOWA PROGRAM TO BECOME OPERATIONAL WELL IN
ADVANCE OF ANY OF THE OTHER BOND-BASED PROGRAMS, AND TODAY, THE IOWA FAMILY
FARM DEVELOPMENT AUTHORITY HAS AN OUTSTANDING TRACK RECORD OF SUCCESS AND IS
SEEN AS A MODEL FOR OTHER STATES TO FOLLOW.
IN ITS FIFTEENTH MONTH OF OPERATION, THE AUTHORITY HAS TO DATE APPROVED
212 LOANS AND HAS CLOSED BOND DOCUMENTS FOR 133 OF THEM. IN CASH TOTALS,
ALMOST $14 MILLION WORTH OF LOAN APPLICATIONS HAVE BEEN APPROVED, AND BOND l'
DOCUMENTS HAVE BEEN APPROVED FOR OVER $7 MILLION OF THEM.
RECENTLY, THE NEBRASKA AND ILLINOIS AGRICULTURAL LOAN PROGRAMS HAVE
BEEN REVISED ALONG THE LINES OF THE IOWA PROGRAM AND HAVE GOTTEN SUCCESSFULLY
UNDERWAY.
IN ADDITION TO UTILIZATION OF A PROVEN METHOD OF BONDING FOR LOANS, THE
MONTANA AGRICULTURAL LOAN AUTHORITY WOULD ALSO INCORPORATE ANOTHER FEATURE
WHICH HAS BEEN SUCCESSFUL IN OTHER STA'fj<~S: I'f WOULD PROVIDE TAX CREDI'fS 'fO
PERSONS WHO SELL AGRICULTURAL LAND TO BEGINNING FARMERS OR RANCHERS.
SIMILAR TAX CREDIT SYSTEMS HAVE BEEN IN EFFECT IN MINNESOTA AND NORTH
DAKOTA SINCE THE MID-SEVENTIES, AND HAVE WORKED WELL IN PROVIDING INCENTIVES
FOR THE SALE OF LAND TO QUALIFIED BEGINNING FARMERS, IN AN ERA IN WHICH THE
ECONOMY OTHERWISE PROVIDES DISINCENTIVES TO SUCH SALES.
THE TAX CREDIT SYSTEM HAS BEEN A KEY PART OF THE SUCCESS OF THE
MINNESOTA FAMILY FARM SECURITY PROGRAM, WHICH HAS HELPED 365 FAMILY FARMERS
GET ESTABLISHED SINCE 1977. NINETY PERCENT OF THE TRANSACTIONS MADE THROUGH
THE PROGRAMS ARE CONTRACT-FOR-DEED ARRANGEMENTS, THROUGH WHICH SELLERS ARE
ABLE TO REALIZE TAX ADVANTAGES.
"THE TAX IMPLICATION TO SELLERS HAS BEEN A KEY ITEM" IN MAKING THE
PROGRAM WORK, ACCORDING TO MINNESOTA FAMILY FARM SECURITY DIRECTOR WAYNE
MARZOLF. SELLERS HAVE "HELD THEIR INTEREST RATES AND PURCHASE PRICES DOWN
BECAUSE OF THE TAX BREAKS," HE SAID, AND ADDED THAT TAX CREDITS CAN OFTEN
IN./!'LUEtWI.!: LANDOWNEHS 'rQ SELL THEIR ~'ARMS TO BEGINNING FARMERS, RATHER THAN TO
LARGE, ESTABLISHED FARMERS.
A SIMILAR ASSESSMENT COMES FROM NORTH DAKOTA: "LANDOWNERS HAVE AN
INDUCEMENT TO SELL TO YOUNG FARMERS, SAID DEPUTY COMMISSIONER OF AGRICULTURE
BOB AMSTROP. "I KNOW IT HAS BEEN EFFECTIVE, ESPECIALLY FOR PEOPLE WHO ARE
GOING OUT OF THE BUSINESS OF FARMING AND HAVE NO SONS OR SONS-IN-LAW" TO TAKE
OVER THEIl{ l!'ARMS.
SO, THE MONTANA AGRICULTURAL LOAN AUTHORITY WOULD INCORPORATE TWO
MUTUALLY-COMPLEMENTARY TECHNIQUES FOR HELPING BEGINNING FARMERS AND RANCHERS
TO GET STARTED, BOTH OF WHICH HAVE PROVEN SUCCESSFUL IN OTHER STATES.
QUALIFIED BEGINNING FARMERS AND RANCHERS -- THOSE WHO HAVE THE PROPER
BACKGROUND AND TRAINING -- ARE THE PEOPLE ON WHOM THE FUTURE OF MONTANA'S
AGRICULTURE DEPENDS. WHEN THE CURRENT AGRICULTURAL DEPRESSION ENDS, IT WILL
BE THE YOUNG PEOPLE WITH THE FORESIGHT TO HAVE BUILT VIABLE FARM AND RANCH
OPERATIONS WHO WILL BE THE PRODUCTIVE GENERATION WHEN THE STATE'S CURRENTLY
ESTABLISHED FARMERS RETIRE.
IF WE DO NOT PROVIDE WAYS THORUGH WHICH QUALIFIED BEGINNING FARMERS AND
RANCHERS CAN SUCCESSFULLY GET STARTED, WE STAND IN DANGER OF SEEING OUR
AGRICULTURAL LAND ACQUIRED BY LARGE, NONAGRICULTURAL CORPORATIONS. THESE
ENTITIES USUALLY DO NOT SUPPORT LOCAL COMMUNITIES AND BUSINESSES UPON WHICH
THE ECONOMY AND VITALITY OF THE STATE DEPENDS, AND THEY OFTEN ABUSE THE LAND,
RATHER THAN PRACTICING GOOD CONSERVATION TECHNIQUES.
WITH TODAY'S TREMENDOUS STARTUP COSTS AND HIGH INTEREST RATES, IT IS
VERY DIFFICULT FOR YOUNG PEOPLE TO GET STARTED IN AGRICULTURE WITHOUT
ASSISTANCE FROM PROGRAMS SUCH AS THAT WHICH WOULD BE CREATED BY SENATE BILL
316.
IN THE PAST TWO SESSIONS OF THE MONTANA LEGISLATURE, SENATOR TOWE HAS
INTRODUCED GOOD BILLS TO HELP BEGINNING FARMERS AND RANCHERS GET STARTED.
THEY FAILED TO PASS, BUT BY VERY NARROW MARGINS.
'I'll IS YEAR, SI!:NA'rOH '1'OWE liAS COME UP WI'1'11 AN lWI!;N UI!;'l"1'EH DILL. r'l' IS
BASED ON PROGRAMS THAT HAVE WORKED IN OTHER STATES, AND IT WILL WORK IN
MONTANA.
WE URGE YOU '1'0 APPROVE SENA'1'!!: BILL 316 FOR THE GOOD OF MONTANA, FOR THE
GOOD OF ITS AGRICULTURE AND THE GOOD OF ITS YOUNG PEOPLE.
IF MEMBERS OF THE COMMITTEE WOULD LIKE ADDITIONAL INFORMATION ABOUT
COMMUNICATING FOR AGRICULTURE, IT CAN BE FOUND IN THE BOOKLET, WORKING FOR
RURAL AMERICA, A COpy OF WHICH ACCOMPANIES EACH OF THE WRITTEN TESTIMONIES.
THANK YOU FOR THIS OPPORTUNITY.
DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION
ENERGY DIVISION
TED SCHWINDEN, GOVERNOR 32 SOUTH EWING
:~~J---~MEOFMON~NA---------(406) 449-3780 ADMINISTRATOR & PLANNING AND ANALYSIS BUREAU (406) 449-3940 CONSERVATION & RENEWABLE ENERGY BUREAU (406) 449-4600 FACILITY SITING BUREAU
Testimony on House Bill 865
HELENA, MONTANA 59620
My name is Leo Berry, Director of the Department of Natural Resources and
Conservation. The Department is not opposed to the concept of House Bill 865,
but we are opposed to the provision that takes one-half of the funds from the
Alternative Renewable Energy Sources Program and allocates them to the Department
of Commerce for grants to businesses that create neW jobs. The revenue loss
to our program is estimated to be $2.494 million for the next biennium.
Taking funds from the Alternative Renewable Energy Sources Program to
promote economic development is ironic because our program is one of the few
existing pr0grams in state government that actually promotes economic development
and creates new jobs in Montana. This development is specifically directed
to the renewable energy sector.
Last session the Legislature granted the Department the authority to make
loans through financial institutions in Montana for the commercialization of
renewable energy. The result of this change is a loan program that is a rather
innovative partnership between state government, financial institutions, and
the rE!newable energy industry.
The Department reviews loan applications for technical and engineering
feasibility. Financial institutions must not only perform the financial feasibility
and credit assessment of a project, but must agree to participate in the loan
by providing at least 10 percent of the loanable funds. Financial institutions
must also agree to service the loans. Our program relies on private sector
innovation and entrepreneurship, public sector engineering and energy knowledge,
and private sector financial expertise. Further, public funds are not only
IN EOVAL OPPORTUNITY EMPLOYER RXHIBI'r H
channelled through private financial institutions, but also leverage private
sector funds to make financing available for new and expanding businesses in
the renewable energy sector.
Promoting the renewable energy industry is important to the future of
Montana and embodies the original purpose of the Alternative Renewable Energy
Sources Program -- to use revenues from nonrenewable coal to develop other
sources of energy that are renewable. The renewable energy industry is not
only important to economic development in Montana because it directly employs
Montanans, but it also can provide sustainable energy to power new commercial
and industrial growth.
The demand that has been placed on program funds that are available for
loans to commercialize renewable energy attest to the potential growth of this
sector. In FY 1982, the first year loans could be made, we received 18 loan
applications. The Department authorized nine applicants to pursue Renewable
Energy Program loan financing through their private financial institutions.
Seven applicants successfully arranged financing, for a total state investment
of $767,700 and a matching investment of $85,300 on the part of the financial
institutions. Loan activities financed in FY 1982 include commercial development
of ! solar domestic water heating system, commercial hogfuel chip producticn
from forest thinnings, and operating expenses for expansion of a commercial
alcohol fuel plant. All these projects created new jobs for Montanans.
This fiscal year we have invested an additional $292,500 in renewable
businesses and have just reviewed 17 loan applications requesting $2,908,086.
The Department has authorized eight applicants to pursue Renewable Energy Program
loan financing through the financial they choose. $700,00 was allocated to
fund these projects. Additional loan applications have been received during
the spring loan cycle. Approximately $300,000 in program funds is available
to fill these loan requests.
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of
rura
l A
me
rica
as
on
e s
tro
ng
vo
ice
. I
HO
LD U
P Y
OU
R H
EA
DS
IN P
RID
E!
You
are
th
e s
tre
ng
th o
f A
me
rica
. H
elp
kee
p it
th
at
I'
way
th
rou
gh
CA
. ' I
-,
IYh
at
is C
A
wo
rkin
g t
ow
ard
?
l~:~~-
~-n~:~
Farm
er
Pro
gra
ms*
A
ny
qu
alif
ied
far
mer
, ra
nch
er
an
d r
ural
sm
all
bu
sin
ess
pe
rso
n w
ith
a n
et
wo
rth
un
de
r $1
00,0
00
sho
uld
hav
e o
pp
ort
un
ity
to m
ake
ap
plic
ati
on
fo
r a
90%
sta
te g
ua
ran
tee
d l
oa
n t
hro
ug
h p
riva
te,
com
me
rcia
l le
nd
ers
or
con
tra
ct f
or
deed
s. T
his
w
ou
ld a
llow
a 4
% i
nte
rest
de
ferr
al
on
th
e l
oa
n.
Als
o in
tere
st r
ece
ive
d b
y th
e s
elle
r o
n a
co
ntr
act
fo
r de
ed
to a
qu
alif
ied
fa
rme
r sh
ou
ld b
e e
xem
pt
fro
m s
tate
in
com
e t
ax.
] N
o F
arm
lan
d S
ale
s to
Non
-Uni
ted
Sta
tes.
Re
sid
en
ts o
r N
on
-Ag
ricu
ltura
l
8 C
orp
ora
tion
s*
Sta
te l
eg
isla
tio
n t
o p
reve
nt
the
sa
le o
f fa
rmla
nd
to
a
nyo
ne
no
t a
pe
rma
ne
nt
resi
de
nt
of
the
Un
ited
~'
" S
tate
s o
f A
me
rica
or
corp
ora
tio
ns
wh
ose
in
tere
sts
J
are
no
t d
ire
ctly
re
late
d t
o p
rod
uct
ion
of
ag
ricu
ltu
ral
com
mo
dit
ies.
Rur
al E
du
catio
n*
Ma
ke e
very
en
de
avo
r to
pro
mo
te a
nd
pre
serv
e o
ur
rura
l e
du
cati
on
sys
tem
as
a vi
tal
asse
t to
ou
r co
un
try.
Est
ate
Tax
Re
form
* P
rese
rve
an
d p
rote
ct t
he
ass
ets
of
the
fa
mily
fa
rm
an
d s
ma
ll fa
mily
bu
sin
ess
fro
m o
pp
ress
ive
in
he
rita
nce
an
d e
sta
te t
axe
s.
Pri
vate
He
alth
Car
e a
nd
In
sura
nce
S
yste
ms*
H
ea
lth c
are
an
d h
ea
lth i
nsu
ran
ce s
ho
uld
be
ad
min
iste
red
by
the
pri
vate
se
cto
r. L
eg
isla
tion
to
be
en
act
ed
on
ly t
o s
et
a m
inim
um
sta
nd
ard
and
in
sure
th
at
all
Am
eri
can
s ar
e g
ua
ran
tee
d t
he r
igh
t to
he
alth
ca
re a
nd
he
alt
h i
nsu
ran
ce.
Rur
al T
ran
spo
rta
tion
* M
ain
tain
an
d s
tre
ng
the
n t
ran
spo
rta
tio
n s
yste
ms
wh
ich
eff
iCie
ntly
se
rve
th
e t
ota
l a
gri
cult
ura
l ne
eds
of
rura
l A
me
rica
.
7', Land a
nd
Soi
l C
on
serv
ati
on
* ,
So
il is
pa
ram
ou
nt
to r
ura
l A
me
rica
-C
A m
em
be
rs
. m
ust
ma
ke g
rea
ter
eff
ort
s to
co
nse
rve
Am
eri
ca's
so
il a
nd
ag
ricu
ltu
ral
lan
d.
l • Ap
pro
ye
d b
y B
oa
rd o
f D
ire
cto
rs a
nd
me
mb
ers
at
CA
's a
nn
ua
l m
ee
tin
g.
""
~
Wh
at
be
ne
fits
an
d
ad
va
nce
me
nts
will
I e
nj
as a
CA
me
mb
er?
C/li
s m
on
thly
pu
blic
ati
on
-C
A
Hig
hlig
hts
-to
ke
ep
yo
u i
nfo
rme
d
issu
es
an
d a
ctiv
itie
s.
Sch
ola
rsh
ip P
rogr
am f
or
Ad
van
ced
Ed
uca
tion
to
th
e
you
th o
f ru
ral
Am
eri
ca.
Me
mb
ers
hip
Su
rve
ys -
dir
ect
lin
fo
r m
em
be
rsh
ip o
pin
ion
s &
in
pu
t c
Sta
te a
nd
Na
tio
na
l L
eg
isla
tio
n.
En
do
rse
d g
rou
p h
ea
lth
pro
gra
m
wit
h c
ash
de
du
ctib
le c
on
cep
t a
llow
ing
th
e o
pti
on
to
co
ntr
ol
he
alt
h c
ost
s
$100
0 A
ccid
en
tal
De
ath
Be
ne
fit
incl
ud
ed
in
M
em
be
rsh
ip
Pro
mo
te I
nte
rna
tio
na
l A
gri
cult
ura
l e
xpe
rie
nce
fo
r yo
un
g p
eo
ple
th
rou
gh
In
tern
ati
on
al
Ag
ricu
ltu
ral
Exc
ha
ng
e P
rogr
ams.
Mo
st o
f u
s th
ink w
e a
re t
oo
bu
sy t
o w
rite
to
OU
I
ele
cte
d g
ove
rnm
en
t o
ffic
ials
. C
A t
hin
ks y
ou
wo
a
gre
e i
t's w
ort
h $
1.25
pe
r m
on
th t
o m
ake
su
re 1
vo
ice
is h
ea
rd.
Ru
ral
Am
eri
ca n
ee
ds
on
e v
oic
e w
hic
h w
ill w
ork
th
e h
ea
lth
, w
ell-
be
ing
an
d a
dva
nce
me
nt
of
rura
p
eo
ple
. An
org
an
ize
d g
rou
p th
at C
on
gre
ssm
en
o·
Un
ite
d S
tate
s w
ill l
iste
n t
o.
Do
n't
yo
u a
gre
e?
We will continue to award grants for the research, development and
demonstration of renewable energy, as these are very important aspects of our
program. However, the majority of these funds will be directed to loans for
new and expanding renewable energy businesses. In FY82 we awarded approximately
70 percent of our funds as loans.
The impact of reducing our program funding by 50 percent would be not only
the loss of approximately $2.5 million in loanable funds to the renewable energy
sector, but also the private sector funds that would be leveraged with our
money. This reduction will come at a time when we cannot come close to meeting
the demand for our loanable funds.
It makes no sense to take money from a program that provides loanable funds
to new and expanding businesses in one sector and award these funds as grants
to new and expanding businesses in different sectors. I would urge the committee,
if it decides to keep the new job grant provisions in this bill, to find another
funding source, one that does not already promote economic development in
Montana.
