by Ellen Thompson
Havre Daily News
The Montana House will take a final vote today on a bill supporters say would buoy the state's agricultural industry by forcing railroads to lower prices in Montana or pay higher taxes.
The House approved the measure Saturday on second reading, 64-36. The sponsor, Rep. Bob Bergren, D-Havre, said he is optimistic about the bill's chances when it moves to the Senate.
Bergren said Montana farmers are forced to pay too much for shipping because the state is a captive rail market. BNSF Railway is the only company that serves most of the state. It costs 60 percent to 70 percent more to ship from Montana to Portland, Ore., than it does to ship through Montana from other states, he said. One-third of farmers' income from sale of grain goes to shipping costs.
The idea for the bill, Bergren said, came from a constituent who farms north of Havre and read about a similar bill proposed in the North Dakota Legislature.
"I'm only changing about 10 lines of current law," Bergren said today. Past Montana and U.S. Supreme Court rulings have upheld the legality of similar tax measures, he said.
The change involves incorporating into the state's tax calculations for railways a ratio of the amount the railway charges in Montana over the amount it charges nationwide. If the company charges more here, it pays the state more.
BNSF can charge Montana more because Montana farmers have few options, Bergren said. High rates here pay for lower rates where competition is greater, he said.
"We're subsidizing shipping in other states," he said. "With ag being one of our biggest industries in the state, that's pretty important to me."
Bergren said high shipping rates hold down land values and even keep people out of the industry. Montanans pay $150 million in shipping costs each year, he said. He'd like to see producers paying tens of millions less.
Since he introduced his bill, Bergren said, BNSF has scheduled a meeting with the governor.
"They're interested in visiting with us and seeing what we want," he said. "That's what we've always asked, to sit down and talk with them."
So far, the industry's main rebuttal has been to say that the bill is illegal, Bergren said.
He said the research he has done so far has shown the bill is legal. He said he has asked a lawyer to study it further.
BNSF spokesman Gus Melonas said the railway's position is that Bergren's bill is illegal.
"We testified before the Montana state Legislature that this is inappropriate tax code and in violation of multiple federal laws," Melonas said.
A similar bill was defeated in the North Dakota Legislature.