Montana Eggs tax abatement on county commission agenda for reconsideration

A tax abatement for Montana Eggs LLC is back on the agenda for the Cascade County Commission.

The commission denied the tax abatement in December in a 1-1 vote when Commissioner Jane Weber was out of town. Commissioner Jim Larson voted against the abatement and Commissioner Joe Briggs voted in favor.

Dan Vuckovich of Anderson Zurmuehlen, representing Montana Eggs, sent a letter to commissioners shortly after they’re vote to deny and requested that the abatement be reconsidered.

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Weber has assumed the role of chairman of the board of commissioners and also requested that it be back on the agenda.

During their work session on Wednesday, Larson asked why it was back on the agenda since nothing was done improperly during the original vote.

Larson asked if one commissioner could take an item off the agenda since one could put an item on the agenda. Carey Ann Haight, county attorney, said two could take an item off, but it’s never taken two to put an item on the agenda.

“So is that going to be policy that if they don’t like a vote to put it back,” Larson asked. “I think you’re opening a can of worms.”

Haight said she disagreed and that if the board doesn’t want an item on the agenda, they can take it off.

Weber said she should have pulled it from the agenda initially, knowing she’d be out of town for the vote, but believes the reconsideration is valid since the full commission wasn’t present for the vote.

Haight said anyone could request a reconsideration, subject to laws and regulation. Haight also said she couldn’t remember a split vote in the last 10 years.

“This is an anomaly in my mind,” she said.

Briggs said he doesn’t want this to happen often, but “if we can’t consider things that have been done in past years, then nothing could ever get done and we could all just go home.”

In his letter to commissioners, Vuckovich wrote that the applicant understands the concern about submitting their application after the project was completed. Commissioners said they preferred to have applications before projects are completed and that it could have impacts on their budget process.

“In this case it is our belief there should be no effect on the county’s budget for this year because the project was not done until September 2017 and the property will most likely not be assessed until January of 2018; therefore any tax abatement effect would not happen until next fiscal year for the county, giving the county plenty of time to factor into the budgeting decisions,” Vuckovich wrote.

Vuckovich wrote that the applicant had submitted the required forms for the new or expanding industry classification to the Montana Department of Revenue before an abatement is requested. That paperwork, which is required under state law, was filed in March 2017, according to Vuckovich. State law requires that to be considered for the current tax year, abatement requests be filed on or before January 1 of the tax year and Vuckovich wrote that they believe they filed their application in a timely manner since the abatement request is for tax year 2018. Vuckovich wrote that they found no reference to a due date in state law or in the county’s own guidelines and criteria for tax abatement requests.

During the December meeting, Larson said it didn’t appear to him that Montana Eggs needed the abatement to make their finances work. Vuckovich wrote in his letter that city and county tax abatements were factored into their cash flow projections and that financial need is not a requirement for tax abatements.

The proposed abatement is for new or expanding businesses and is allowable under Montana state law. The abatement lasts for 10 years and in the first five years, qualifying improvements are taxed at 25 percent or 50 percent of their taxable value. After that, the percentage increases by equal percentages until the fill taxable value is attained in the 10th year, according to Montana Code Annotated. Once the abatement period ends, the property is taxed at 100 percent of its value.

The county doesn’t have an estimate on how much the abatement would reduce the county’s tax revenues.

According to the Montana Department of Revenue, the total abatement is $305,620 over 10 years, for both city and county taxes. On Friday, the DOR didn’t have a breakdown between city and county taxes. Abated funds don’t go into the general fund for local governments, but once the abatement ends, Montana Eggs would resume paying full taxes on the improvements at the property.

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Montana Eggs opened the new facility in September at 38th Street North near the intersection with River Drive. The building is a roughly $9 million investment by the company, continuing a 20 year history in Cascade County, Vuckovich said during the December meeting. Since 2011, Vuckovich wrote in his letter to commissioners, Montana Eggs has invested more than $13 million in Cascade County through various projects.

The Great Falls City Commission approved the abatement for city taxes during an October meeting.

Montana Eggs’ former location at 1401 Stuckey Road is currently listed on the market for $2.35 million.