Representative Terry Falk opened the hearing on House Bill 132, saying the bill “is meant to exempt a portion of people's interest on savings accounts and interest earnings from their individual tax.”

Sponsor’s intent: Representative Falk told the committee the bill would let individuals deduct a portion of interest income reported on Form 1099‑INT from adjusted gross income, with a per‑individual cap (the sponsor described a $2,500 cap per individual) and a doubled cap for joint filers. Falk said the aim was to help smaller savers, young people and risk‑averse older savers by reducing taxes on interest from safe savings vehicles such as short‑term CDs and money‑market accounts.

Administration and technical points: Brian Olson of the Department of Revenue explained that interest reported on 1099‑INT is treated as ordinary income, not capital gains, and that the department can administer a deduction limited to income reported on 1099‑INT. Representative Falk clarified that the bill targets interest reported on 1099‑INT and would not apply to dividend or capital gains income.

Opposition: Allen Lloyd, executive director of the Montana Society of CPAs, opposed the bill on procedural grounds, saying the society opposes additions that reintroduce complexity to tax returns after recent simplification efforts (citing work in the 2021 session). Rose Bender of the Montana Budget and Policy Center urged the committee to hold the bill until the committee had a fuller view of the cumulative revenue impacts of several tax bills, and suggested lowering the cap if the committee proceeds.

Committee questions and clarifications: Members asked about the fiscal note; the sponsor said a fiscal note was pending and would be important for decisions. Brian Olson said the department could produce a fiscal estimate and that the deduction could be drafted to phase out by taxable income if the committee wanted a targeted benefit for low‑ and moderate‑income taxpayers.

Ending: Representative Falk closed by emphasizing the bill’s goal to incentivize saving and financial literacy, particularly among younger and risk‑averse Montanans. The committee did not take a vote at the hearing; staff said a fiscal note was forthcoming.