Governor’s Tax Package on Hold over Federal Funds Requirements

American Rescue Plan Act of 2021 causing confusion for all states

State Director Ronda Wiggers reports from Helena on the small-business agenda for the legislative and political week ending March 19

The focus of the Legislature this week has been the budget and the appropriation of the new federal funds. The Appropriations Committee and the legislative staff are pouring over the approximately 700 pages of federal law to learn where and how the funds may be used.

Some of the money must be “new” money; some can be used to backfill existing budgets; some must have a direct link to COVID; while other money can be used for infrastructure. There are also different time frames in which certain funds need to be spent. And, finally, the money cannot be used to reduce taxes and it is assumed that nearly any tax cut passed could put the funds in jeopardy. All of Gov. Greg Gianforte’s tax package, as well as any other bills that may have lowered specific taxes, have been stopped in their respective committees in order to determine how best to move forward.

The Appropriations Committee put final touches on House Bill 2, the state budget, last week and it will be debated on the House floor on Monday and Tuesday. They spent this week gathering suggestions on spending the federal funds and trying to determine how each different fund could be used. Their job is made even more difficult as it may be months before the federal government issues rules and guidance for the implementation of the bill.

Although no one is ever sure until the final votes are taken, it appears that they are trying to use the funds to replace what was spent on COVID expenses and then focus on infrastructure projects. The money can be spent on water/sewer and broadband infrastructure. They have repeatedly mentioned that they do not want to use the funds to create programs that would need continued funding after this money is gone, but instead to focus on one-time expenditures. They are also researching options to delay implementation of the tax cut bills to stay in compliance with not using the funds for tax cuts.

Update on This Week’s Events

HB 254 Revising Wrongful Discharge passed the Senate floor and is on its way to the governor’s desk. Among other things, this bill increases the probationary period from 6 months to 12.

SB 361 Generally revise laws to establish certificate of rehabilitation was heard in House Judiciary. The committee has not yet acted on the bill. The bill would allow an individual with a criminal record who has successfully completed all of the terms of their sentence to request from the courts a “certificate of rehab” that they could then use to obtain housing and work. It does not bind an employer to anything, so NFIB is just monitoring the bill.

HB 198 Increasing the Workers’ Compensation death benefit passed the Senate and is on its way to the governor’s desk. This will increase the funeral benefit paid thru Workers’ Compensation to $10,000 and will not adversely affect rates.

SB 260 Revise laws related to property interests and transfer of business was heard in the House Business & Labor Committee but the committee has not yet voted on it. This bill includes licenses and intangible property as value in a legal-takings proceeding and also would change the law so that a legal takings can occur without the total loss of property value, but instead with any loss of value over 25%. If the court agrees there is a legal taking of private property, the property owner is entitled to reimbursement.

SB 367 Revise labor laws relating to independent contractor certification was heard in House Business & Labor. The committee has proposed a grammar change amendment and has not yet voted on it. Under current law, if someone is found to be working without an IC license, they are automatically assumed to be an employee. This bill would allow for more investigation. If someone were to tell you that they had an IC license, acted as an IC, and then it is discovered that their license had lapsed, as long as they were truly acting as an IC, it would not be a violation.

HB 378 Create a mini-COBRA law for small employer health insurance plans was heard in Senate Business and TABLED.

SB 251 Revise civil liability laws related to damages – this bill limits damages in a lawsuit. It was heard in House Business Committee, which is considering amendments prior to voting on it.

HB 121 Require elected official approval of local health board and officer actions – this is a compilation of all the different proposals. This has been heard and widely supported in the Senate Business Committee on Friday, but no action was taken.

The Week Ahead

Focus will be on a state budget

Tuesday: 9 a.m., Senate Business and Labor, HB 407 Establish a statewide uniformity for auxiliary container regulations – this bill would prevent a local government from passing any laws that bans single use or any particular type of packaging.