By State Sen. Jon Tester
The state constitution was written so that the state Legislature meets 90 days in odd numbered years. The time in between legislative sessions is called the interim. During the interim, legislators are assigned to serve on interim committees. I have the opportunity this interim to serve on six interim committees. This article is a very short summation on what has occurred in each of these six committees in the past 14 months.
The Legislative Audit Committee's charge is to be the citizens' watchdog to ensure effective and efficient administration and management of public funds and programs. All state agencies are audited by the legislative auditor every interim. Every agency from the Department of Agriculture to the lottery system to the university system has its finances scrutinized by the legislative auditor.
I will address two of the more time-consuming audits. The new POINTS computer program implemented by the Department of Revenue has been and continues to be an item of concern for the audit committee. The computer program, due to a number of mistakes made by the department, is not delivering as advertised. The state of Montana has socked well over $30 million into this program and we have yet to receive the kind of solid credible financial numbers from this program that the Legislature expected when the original funding was appropriated in the 1999 session. As chair of the Audit Committee, I appointed four members of the Audit Committee to serve on a subcommittee with legislators from the Finance and Revenue and Transportation committees to provide legislative oversight on the POINTS project's direction. It was agreed that in August a decision would be made as to whether POINTS should continue or be scrapped.
The Department of Health and Human Services has had some bookkeeping problems over the past four years and maybe longer. It was a goal of the Audit Committee to apply the necessary oversight of the DPHHS so that they would seriously work toward resolution of these financial reporting problems. In that line the Audit Committee has requested the DPHHS presence at every Audit Committee meeting over the past 14 months to describe the actions taken and where DPHHS was in solving these problems. To the DPHHS's credit, they reorganized their financial division and, as of the audit meeting earlier this month, the committee was satisfied with their progress in resolving the financial problems and no longer felt is was necessary to have them attend the Audit Committee meetings in this biennium.
The Environmental Quality Council's purpose is to encourage conditions under which people can coexist with nature in "productive harmony." The EQC deals with some of the most complex and emotionally divisive environmental, natural resource, water and energy issues in the state. The EQC was broken up into three subcommittees Energy, Agency Oversight, and Coal Bed Methane. I serve on the Coal Bed Methane and Water Policy subcommittee. Last fall the members of the EQC held their meeting in Colstrip. After that meeting, we toured the coal bed methane field on the Montana/Wyoming border and continued down into Wyoming and toured the coal bed methane development at Arvada, Wyo. The methane is retrieved from the coal bed by pumping large quantities of water from the coal seams and capturing the released gas once the water pressure is minimized. The water is released in reservoirs or river drainages and the methane is piped to compressor stations. The methane captured is a very clean-burning energy source. The potential downside of CBM development is the water quality impacts on surface water of the released water and the water availability remaining in an aquifer after pumping large quantities of water out of that aquifer.
The energy subcommittee has been discussing the electrical energy landscape in Montana with the advent of electrical deregulation. Dennis Lopach, NorthWestern Energy's legislative liaison, told the EQC that legislators should consider whether energy competition would ever develop for small residential and commercial customers and whether the electricity supplied to those types of consumers should be reregulated. Hmmm.
One of the issues the Agency Oversight subcommittee is addressing is cleanup standards regarding methamphetamine labs. At this point, various state agencies address different stages of the meth lab cleanup process. The subcommittee encouraged the governor to request the appropriate state agencies to develop consistent cleanup standards regarding the meth lab cleanup within the state.
The Department of Revenue's Agland Reappraisal Committee wrapped up its duties in the middle of this month. Every six years a committee is appointed to determine and recommend to the governor new ag-land values. The current ag-land values will end on Dec. 31. The new ag-land valuation schedules will take effect in January and will be incrementally phased in each year until full implementation in 2008. The five agricultural land classifications are continuous cropped farmland, summer fallow farmland, continuously cropped hayland, irrigated land, and grazing land. The average total reappraised value increase for each class is about 2.5 percent per year. Keep in mind that the taxable percentage applied to the appraised value gives you the average per-acre taxable value. If the taxable percentage is phased down, the tax value will actually be less even with the 2.5 percent appraised value increase. After serving on this committee, it gives a person a realization why tax simplification should be a priority. We did do some simplification by reducing the number of irrigation grades from eight to six grades.
The Department of Revenue has had some questions (lawsuits filed) raised over the past few years on when Class 3 property (agricultural-use land) and class 10 (forest land) become Class 4 property (residential and commercial land). To clear up this point of contention, the DOR appointed a committee consisting of myself and another legislator, as well as two land developers, a forest representative, a county commissioner rep, a city government rep, a rancher and a taxpayer association rep, for the purpose of establishing the rules/definitions as to when class 3 and class 10 become valued as class 4. The rules we proposed are as follows: After land is platted and filed as a subdivision and contains three or more of the following physical site improvements, then the property changes to class 4 property 1) city or community sewer system, 2) city or community water system, 3) street curbs and gutters, 4) paved or all-weather roads, 5) storm sewer system, 6) utilities, underground or above, to include any of the following: gas, electricity, phone, cable television, 7) streetlights, 8) fire hydrants, 9) landscaping for aesthetic benefit or security of all the owners.
The last committee that I will address is the governor's advisory committee on reducing income taxes by 10 percent. This committee is one of three committees established by the governor. One of the other committees is studying the local-option sales tax and the other committee is considering a sales tax on items that are primarily used by tourists. The funds derived from the proposed sales tax would be used to offset the revenue lost from the income tax deduction. We looked at eight different tax options in the income tax committee last week and narrowed those eight options to two options. One option would, in a nutshell, eliminate the current ability of taxpayers to deduct any federal taxes from the state income taxes and reduce the top rate from 11 percent to 6.9 percent. The other option would cap at $3,000 the amount of federal taxes a single taxpayer could deduct in state income taxes and also reduce the top marginal rate from 11 percent to 6.9 percent. The DOR is running more numbers for our next meeting in July to determine who wins and who loses with each of these proposals, as well as developing solid numbers on how much each plan will impact the budget.
Jon Tester is a Democrat and Montana state senator from Big Sandy. His mailing address is 709 Son Lane, Big Sandy, MT 59520, his phone number is 1(406)378-3182, and his e-mail address is firstname.lastname@example.org.