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Debate on HB 16 centers on preventing 'double dipping' and rural eligibility for infrastructure credits
Summary
Sponsor Rep. Larry Brewster described HB 16 as a cleanup to prevent taxpayers from claiming an infrastructure fee both as a tax credit and as a deduction; economic development groups urged adjustments to eligibility thresholds and loan sizes to make the program workable for rural communities.
Representative Larry Brewster opened the hearing on House Bill 16, describing the bill as a periodic statutory review of a state economic development tax credit and related infrastructure fee provisions. "This bill clarifies that you could do one or the other, but you can't do both," Brewster said, referring to language that would prohibit claiming an infrastructure use fee as both a tax credit and a tax deduction.
Eric Seidensticker, chair of the Montana Economic Developers Association policy committee, urged the committee to account for rural proportionality in eligibility rules. He said requiring 15 new jobs for program eligibility makes the tool largely unworkable for small towns and recommended lowering the job threshold for communities under 10,000 residents and increasing loan‑size parameters for rural projects.
Dan Villa, executive director of the Board of Investments, and Jake Ford of the Department of Revenue appeared as informational witnesses to describe program administration. Villa told the committee that current outstanding loans and commitments are focused on new‑job projects and that, in the program's current portfolio, distributions were not being used for raising salaries but rather tied to job creation. Representative Konauer and others asked about retention language and the bill's effective date; Brewster said those were not discussed in detail during the interim and suggested material changes might be better addressed in a separate bill.
Brewster closed by noting the fiscal note shows a modest positive state impact (about $18,000) and urged the committee to pass the committee bill. The committee scheduled executive action on bills heard that day for a later time.
