Better Approach than Eminent Domain

The Supreme Court's 2005 Kelo v. City of New London decision that a city can use its power of eminent domain to redistribute property in pursuit of economic development drew widespread public opposition, setting off what Professor Nicole Garnett termed "a firestorm of popular outrage." It also prompted many states to adopt measures limiting the use of public domain for such purposes.

Now, the development of both renewable and unconventional fossil fuel energy sources are raising eminent domain issues again, as utilities use state grants of eminent domain power to take land for transmission lines and pipelines. These takings pose even greater challenges than the blatant rent-seeking property owners faced in cases like Kelo. Unlike landowners who are forced to sell their property outright, those who find themselves hosting an unwanted transmission line or other infrastructure on their property are locked into a permanent relationship with a hostile partner sharing the rights to their land. Eminent domain law provides no safeguards to address these problems.

Read more: Better Approach than Eminent Domain

EPA Grabs for Dry Land -

The Environmental Protection Agency's proposal to expand the scope of "navigable waters" subject to Clean Water Act jurisdiction was drafted, according to the agency, to reduce uncertainty. And that it does. It's very clear the proposed rule is designed to allow the federal government to regulate every place water flows when it rains, including small and remote "waters" and ephemeral drains and ditches.

Read more: EPA Grabs for Dry Land -

If we don't stand up to the feds, who will?

There's an important reason why every state official, when sworn into office, must pledge to "support, protect and defend the constitution of the United States, and the constitution of the state of Montana."

These words, required by Article III if the Montana Constitution, convey much more than mere ceremony. They are meant to impress upon each office holder, his solemn obligation to not only honor and respect these guiding documents in the performance of his duties, but also to learn and understand them. The U.S. Constitution is the instruction manual for all public officials. It is the highest law of the land.

Read more: If we don't stand up to the feds, who will?

Rate of Entrepreneurship at Record Lows

Entrepreneurship and self-employment endeavors – the nucleus of new business and future business growth — are at record lows, according to many analysts. The decline has long term consequences, which has Ray Keating alarmed. Keating is the Chief Economist for the Small Business and Entrepreneurship Council.

The SBE Council has been reporting on the weak state of entrepreneurship in the US for quite a while, now, and announced recently that they are "thrilled" that the House Small Business Committee, Subcommittee on Contracting and the Workforce seems to be taking up the issue.

The committee held a hearing on September 11, The Decline in Business Formation: Implications for Entrepreneurship and the Economy, to investigate the issue further.

Read more: Rate of Entrepreneurship at Record Lows

Chamber Update - September 1, 2014

"The Hill" reports that the Obama Administration will continue issuing controversial rules through the midterm elections, despite the political risk it could pose for Democrats. The pace of rulemaking is a stark contrast from the months leading up to the 2012 presidential election, when the flow of rules came screeching to a near halt.

Case in point are the EPA's controversial "climate change" and "waters of the US" rules. The Montana Chamber opposes both as unnecessary and anti-recovery. Both are proceeding a full pace and are being used as campaign points in many races.

Read more: Chamber Update - September 1, 2014

Fed Up with Federal Lands Management

There are several reasons Montana is lagging behind neighboring states when it comes to oil and gas development. While North Dakota maintains nearly 200 drilling rigs at any given time, Montana has struggled to keep rigs running. North Dakota issued over 2,500 drilling permits last year. Montana issued only 297. Considering these numbers, it should come as no surprise that North Dakota is producing around a million barrels a day, while Montana pumps out less than 80,000 barrels a day. So what gives?

Taxes, access, geology and regulatory climate all play a key role in company's decision to deploy capital to a particular area.

Read more: Fed Up with Federal Lands Management

Gun Owners are Boon to Wildlife

Because of gun owners and the taxes they pay wildlife restoration efforts are experiencing a boon.

A tax on the sale of guns, ammunition, shooting gear and archery equipment raised more than $760 million in 2014 from $310 million in 2008 for the Federal Aid in Wildlife Restoration Program. A similar tax on fishing and boating equipment, generated another $325 million for fish restoration in 2014.

Gun sales have surged under the gun control policies of President Obama and leading Democrats, explained Montana's Terry Anderson, who's opinion piece recently appeared in the Wall Street Journal.

"You might say Mr. Obama is the best thing to happen to fish and wildlife since Teddy Roosevelt," said Anderson, who heads the Property and Environment Research Center (PERC) in Bozeman.

Read more: Gun Owners are Boon to Wildlife

Montana Petroleum Association Comes to Aid of Member

Last month, the Montana Petroleum Association (MPA) sent a letter to the Forest Service Supervisor in Great Falls, requesting Consulting Party status in the Section 106 of the National Historic Preservation Act meetings concerning MPA member, Sidney Longwell of Solenex, LLC.

The case involves a Montana lease.

Section 106 of the National Historic Preservation Act of 1966 (NHPA) requires Federal agencies to take into account the effects of their undertakings on historic properties, and afford the Advisory Council on Historic Preservation a reasonable opportunity to comment. The historic preservation review process mandated by Section 106 is outlined in regulations issued by ACHP. Revised regulations, "Protection of Historic Properties", became effective August 5, 2004, and are summarized below (Advisory Council on Historic Preservation):

Read more: Montana Petroleum Association Comes to Aid of Member

Tax Reform Needs to Foster Innovation—Not Tax It

 

With Congress on a never-ending spending spree, it's no surprise there are some Congressmen pushing for an increase in energy taxes as a way to fill the hole they've dug for themselves. This push to increase energy taxes is reflected in a tax reform proposal recently released by Ways and Means Committee Chairman David Camp. If enacted, this proposal would be a hard hit to the energy industry by repealing tax policy that is helping to create jobs.

The Camp bill has many useful provisions. It drops tax rates to 25 percent, takes steps to simplify more arcane aspects of our code, and modifies our system of international taxation in a manner that would protect many American companies from being taxed twice on the same income as they compete overseas. Including such meaningful reforms makes the Camp bill a much better proposal than earlier proposals by former Senate Finance Chairman Max Baucus or President Obama.

Unfortunately, the existence of some sharp barbs directed at the energy industry means that the Camp bill still needs revision. Camp's proposal repeals the Last-In First-Out (LIFO) accounting method that helps American energy producers manage their tax burden. It changes provisions designed to encourage producers to continue investing in marginal wells which produce 20% of our domestic oil. And it changes provisions that help small companies raise capital from investors.

The energy industry is one of the most capital intensive, and most highly taxed, industries in the United States. A recent analysis by the New York Times shows that the three largest oil companies paid the most taxes of all major corporations, and all three have an effective tax rate above the U.S. corporate tax rate of 35%. Exxon's effective rate is 37%, Chevron's is 39%, and ConocoPhillips is a whopping 74%. Compare those effective rates to companies like Apple, which carries a 14% effective rate, or Coca-Cola, with a 15% rate, or Amazon, at 6%.

Despite that heavier tax burden, the American energy industry is still a leading driver of national job creation and economic growth. Not to mention, it supplies the fuel we use to drive to the grocery store to buy our Coke, and supplies the electricity we use to power up our Apples to shop at Amazon.

Montana's energy sector directly employs nearly 7,500 jobs and indirectly supports over 20,000 jobs across the state and pays millions of dollars in tax revenue each year, and with increasing opportunities in the energy sector, these numbers continue to climb.

These gains are valuable to Montana and the United States. Yet the energy industry is not an endless source of revenue, and further burdening companies that already pay high taxes will cause a major slowdown in production. For smaller, independent companies, these changes could make operation unfeasible, causing them to reduce production or shut down altogether. With the cost of operation for energy companies disproportionately high compared to other American industries, there would be little incentive for new investors to enter into the energy sector—hurting not only our domestic energy security, but losing jobs and tax revenue in the process.

Representative Camp's goal is to find a permanent solution to the debt. That is a terrific goal. But piling on the energy industry as a way to feed the out-of-control spending taking place in Washington has no part in this solution. There needs to be a real change in the way we spend our money that accompanies tax reform. The push by some members of Congress to increase taxes on energy would harm US energy producer's competitive advantage, destroy jobs, and raise energy costs for consumers.

If we hope to fix this problem without causing lasting damage to our economy and the industries operating within it, tax reform needs to foster investment, development, innovation, and competitiveness within our economy—not tax it.

Rep. Kris Hansen represents House District 33 in the Montana State Legislature. Rep. Hansen served as the Chair of the House Education Committee and a member of the House Taxation Committee. She is currently serving on the Education and Local Government, and Legislative Council Interim Committees.

Market Update

1 DOW 20,656.58
-4.72 (-0.02%)    
2 S&P 2,345.96
-2.49 (-0.11%)    
3 NASDAQ 5,817.69
-3.95 (-0.07%)    
4 MDU 27.10
-0.08 (-0.29%)    
5 SWC 17.41
+0.08 (0.46%)    
6 EBMT 20.15
+0.25 (1.26%)    
7 FIBK 38.85
+0.30 (0.78%)    
8 GBCI 32.71
+0.12 (0.37%)