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Sponsor outlines 'Community Improvement' tax credit aimed at small volunteer groups
Summary
Rep. Shane Klacken presented HB 859 to create a Montana Community Improvement Tax Credit (up to $3,000 or 10% of taxable income; $2,000,000 initial aggregate cap with automatic increase). Proponents described local fundraising examples; opponents urged stricter legislative caps and oversight.
Representative Shane Klacken opened testimony on House Bill 859, the "Montana Community Improvement Tax Credit Act," saying the measure aims to keep private contributions local and to support volunteer groups that fund public facilities. "My name is Shane Klacken" (Rep. Klacken) and he explained the bill would allow individuals and businesses to claim a credit up to $3,000 or 10% of taxable income, with an initial aggregate cap of $2,000,000 that can automatically rise if usage reaches 80 percent of the cap. Contributions to qualifying, volunteer‑only 501(c)(3) groups would be preapproved by the Department of Revenue and the credit could be carried forward for three years.
Proponents described local projects that relied on volunteer fundraising. Kevin Kepler of Lewistown testified about a community pool campaign, saying local nonprofit efforts raised the large majority of project funds and that a state credit would be an additional tool for communities to leverage local generosity. Opponents raised administrative and oversight concerns. Bob Storey of the Montana Taxpayers Association cautioned that an automatic escalation mechanism could grow without direct legislative review and urged a fixed cap or clearer legislative oversight.
Department of Revenue officials said the department would need to create an online registration and logging portal for eligible organizations so donations could be tracked against the aggregate cap and be shut off when the cap is met. Representative Klacken said he was open to an amendment to keep the starting cap fixed and revisit increases after an initial pilot period.
Why it matters: the bill targets small volunteer organizations and aims to shift some taxpayer support toward locally chosen projects — parks, pools, libraries — but it raises administrative questions about tracking, caps and ongoing legislative oversight.
Next steps: the committee closed the hearing and scheduled executive action at a later meeting; DOR and sponsor indicated implementation details (portal, registration, attestation) would be refined in rulemaking or by amendment.
