Wednesday, March 4, 2015

Legislative Update: Oppose Senate Bill 171 Unless Amended

Current Status: Senate Bill 171 passed the Senate March 6 and was assigned to House Taxation March 10th. First heading in House Taxation has/had not been scheduled at the time of this post. 

 Friends,

 The Montana Recycling Association is closely monitoring the 2015 Legislature in Helena. Our priority this session is to protect recycling incentives that help keeping recycling capacity and recycling manufacturing-and the jobs they create-in Montana. 

 Senate Bill 171, outlined in more detail below, would eliminate the recycling incentives at the end of the 2016 calendar year without any review of how the loss of the incentives would effect the industry. Whatever merits the bill may have, the recycling incentives were established and recently extended with bi-partisan support. They are the cornerstone of Montana's policy to support and expand the economic, environmental and community benefits of recycling in Montana.  

 MRA is also monitoring House Bill 154, which provided for a more measured approach to review economic policies such as the recycling incentives. Such an approach, with the schedule outlined in the bill, would provide a responsible way to review the recycling incentives without abruptly hurting the industry. 

 Senate Bill 171 needs to be opposed unless it is amended to protect Montana's recycling incentives. 

 - MRA
Montana Recycling Association
Box 1360, Helena, Montana 59601
MontanaRecyclers(at)gmail.com

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Senate Bill 171: 
​Eliminate Recycling Incentives Calendar Year 2016; Amendment Needed to Protect Recycling Incentives

Senate Bill 171 would repeal a large number of credits and deductions, including those for recycling, at the end of 2016. This Bill is very similar to is similar to Senate Bill 282  which then Recycle Montana President Mark Nelson discussed is a letter to the editor entitled “Recycling Incentives Important for Montana.”  MRA's opposition to the bill is the abrupt elimination of recycling incentives​ that help expand recycling capacity and maintain recycling based manufacturing in Montana​. MRA otherwise has no position on the bill. 

Senate Bill 171 had an extensive hearing on January 29th. The sponsor, Senator Tutvedt, 
​initially prepared an amendment to SB 171 to leave the recycling incentives in tact.  ​Unexpected to persons on both sides of the isle, the amendment not introduced during executive action in Senate Taxation. 

MRA is working to ensure the final version of the bill does not include eliminate the recycling credits. ​ Senate Bill 171 has been assigned to House Taxation, but has not been scheduled for a hearing as of time of this post. 



House Bill 154: Review of Tax Targeted Tax Policy


Summary: 

House Bill 154 as amended sets termination dates for 28 tax credits over a staggered timeline based on how long the credit has been in place (older credits are up for review sooner). The credits would be reviewed by the Revenue and Transportation Interim Committee (RTIC), which could then recommend their extension to the legislature for an eight year period.  

The recycling credit is slated for termination at the end of 2021 in HB 154. RTIC would to tasked with reviewing the credit during the 2019-2020 interim. Montana Recycling Association is monitoring this bill.

Current Status: Re-Referred from House Floor to House Tax, Passed Committee March 24th with addition amendments

House Bill 154 narrowly passed second reading and only passed third reading due to an accidental vote in support. The scheduled termination of the capital gains credit was a concern raised by some legislators. The bill has been returned to House Taxation. ​There was some discussion of the bill advancing without including the termination dates of the various tax provisions. The bill passed the House Taxation committee March 24 having been further amended to no longer include termination and review of the capital gains, elderly homeowner & renter, and income for taxes paid to other states or countries credits. 


More Details:
House Bill 154 (from this fiscal note prior to amendments): "HB 154 sets termination dates for 25 personal income and corporate income tax credits. Under current law, none of the 25 tax credits have termination dates. The Revenue and Transportation Interim Committee (RTIC) would review five or six of the credits each interim and make recommendations to the Legislature as to whether the credits should be extended. This bill effectively sunsets these credits in two year tranches. All the credits, if none were extended, would expire by TY 2025. The Legislature would have to amend statutes of the RTIC reviewed credits in order to extend the termination dates. Each extended credit would be reviewed every eight years under the sunset provisions of this bill. The elimination of the first tranche of tax credits in CY 2018 is estimated to increase general fund revenue by $48,315,779 in FY 2019. Once fully implemented, the elimination of tax credits in future years (TY 2025) will result in the elimination of approximately $100 million in tax credits increasing general fund revenue by a like amount." [End quotes fiscal note]


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