Capitolized is a twice-weekly digest that keeps an eye on the representatives you voted for (or against) with expert reporting, analysis and insight from the editors and reporters of Montana Free Press. Want to see Capitolized in your inbox every Tuesday and Friday? Sign up here.
February 28, 2023
The House and the Senate have scheduled floor sessions on Wednesday and Thursday to review numerous bills still pending for a complete vote in their respective chambers. Non-budget-related bills must be sent to the second chamber by the end of Friday, March 3, which marks the 45th day of the 2023 Legislature. Any proposals failing to meet this deadline will be considered inactive. Lawmakers will allocate Friday to address any remaining final votes.
The House is scheduled to gavel in Wednesday at 8 a.m. and work until 6 p.m. Senate Majority Leader Steve Fitzpatrick said Tuesday that the Senate will gavel in at 10 a.m. on Wednesday and hear at least 50 bills.
—Arren Kimbel-Sannit
No Trust for the Trust
On Tuesday, the Senate Local Government Committee rejected a one-page legislation that aimed to transfer $2 billion from the state’s General Fund to the coal severance tax trust fund, which earns interest.
Butte Democratic Sen. Ryan Lynch’s Senate Bill 346 attracted more than 40 sponsors on both sides of the aisle and across factions within the GOP, but generated considerable friction with majority-party legislative leadership, which, along with the governor’s office, has its own ambitions for how to spend the state’s roughly $2.4 billion budget surplus. The bill died on party lines in the committee — where Lynch suspects it was sent to be killed — 6-3, with Republicans in opposition.
Money in the coal trust is invested, generating interest that flows to uses including water and sewer projects, job creation grants and public school facilities. More than $1 billion currently sits in the trust.
Last week, Lynch informed Capitolized that when considering all the buckets, the funds are allocated for infrastructure grants, planning grants, water, and wastewater in Montana. He emphasized that these funds have a widespread impact, reaching all facets and corners of the state. Lynch confidently stated that it would be difficult for anyone to argue against the coal trust fund as a valuable initiative.
According to legislative staff, the current interest generated by the trust is approximately $35 million per year. They also mentioned during the bill’s hearing on Monday that an investment of $2 billion would yield an additional interest of around $80 million annually.
Good idea or not, the bill aroused suspicion from Republican leaders that the lawmakers who signed on to the proposal were seeking to exert leverage as the budget-crafting process heats up. Indeed, Senate Majority Leader Steve Fitzpatrick, R-Great Falls, sat in on the Local Government Committee — he’s not a member — to cross-examine Lynch during the bill’s hearing. Members of legislative leadership can attend committees as ex officio members but cannot vote.
Fitzpatrick persistently pestered Lynch, attempting to prompt him to confess whether he intended to manipulate other expenditure priorities, such as Republican-endorsed tax rebates, or covertly insert Democratic proposals into the budget. Additionally, Fitzpatrick questioned what would occur to the $2 billion if the proposal reaches the governor’s office — “although it’s unlikely,” Fitzpatrick informed Lynch — and subsequently gets vetoed.
Fitzpatrick inquired, “Would it be considered a successful conclusion for the people of Montana if he vetoes it but maintains a $2 billion ending fund balance?”
Lynch defended the bill with unwavering determination, even if he did so with a hint of irony.
Fitzpatrick inquired, “Are you attempting to eliminate the rebates?”
“Nope,” Lynch responded.
According to Lynch, the coal trust’s generated funds can be utilized to finance various priorities. He also added that the surplus figure of $2.4 billion has the potential to increase with future revenue estimates.
“Clearly,” he went on, “budgets revolve around making decisions.”
On Tuesday, Republican lawmakers expressed their apprehension regarding the potential hindrance of shared policy priorities, such as enhancing the state hospital at Warm Springs, for both Democrats and Republicans.
SB 346 “will mean that we are not refunding money to the taxpayers that created the surplus, we are not investing in infrastructure, we are not investing in mental health, we are not investing in housing, we are not investing in property tax relief,” Sen. Forrest Mandeville, R-Columbus, said. “A yes vote for this bill at this time is a no vote on all of these issues.”
Although not fully ready to endorse it in its current state, several GOP committee members showed interest in the idea.
“I don’t necessarily think this is a bad idea, but I think this is a big number, and we’re dealing with a lot of big numbers right now,” Sen. Jeremy Trebas, R-Great Falls, said.
As if on cue, Republican leadership on Tuesday announced a new bill, House Bill 816, to provide an additional $200 million in income tax rebates.
—Arren Kimbel-Sannit
Bill Report
A six-bill, $1 billion spending package that will likely route hundreds of millions of dollars to Montanans’ pockets in the form of income and property tax rebates appears likely to clear the Senate intact after its biggest-spending bills cleared preliminary votes in the Senate Tuesday.
- House Bill 222 would put $284 million toward property tax rebate checks of as much as $1,000 for Montana homeowners.
- House Bill 192 would spend $480 million on income tax rebates of up to $1,250 per taxpayer.
- House Bill 251 would pay down some state debt.
- House Bill 267 is a $100 million highway funding measure.
On Tuesday, the final Senate votes were passed on two additional bills, which are part of the legislative package called the “six-pack”. These bills will now be sent to Gov. Greg Gianforte’s desk for approval.
- House Bill 212 raises the exemption threshold for the state’s business equipment tax from $300,000 to $1 million.
- House Bill 221 cuts the state’s capital gains tax rates.
On Tuesday, two more bills proposed by Gianforte and Republican lawmakers successfully passed the initial votes in the House.
- Senate Bill 121 would reduce the state’s top-bracket income tax rate from 6.5% to 5.9%, at an estimated cost of $140 million annually. It would also expand the state’s version of the federal Earned Income Tax Credit, directing about $11 million more a year toward lower-income working families.
- Senate Bill 124, which would adjust the state’s corporate income tax code to generally shift tax burden from companies with extensive in-state facilities and payroll onto e-commerce companies that sell into Montana with a comparatively light physical footprint.
Senate Bill 232, which seeks to flesh out Montanans’ constitutionally enshrined right to know by defining the state’s “timely” response to record requests, unanimously passed the Senate Tuesday afternoon. The bill requires state agencies to acknowledge a records request within five business days of its receipt. The agency would then have five days to produce a single, identifiable document — meeting minutes or a quarterly report, for example — and 90 days to comply with requests for more complex information that “cannot be readily identified and gathered.” State agencies subject to SB 232 would have six months to turn over especially complicated requests. SB 232 sponsor Sen. Janet Ellis, D-Helena, made significant changes to the measure after speaking with members of Gov. Greg Gianforte’s administration.
HB 595, a bill sponsored by Rep. Scot Kerns, R-Great Falls, that requires partisan election of Montana Supreme Court justices was pulled off the table and passed out of the House Judiciary Committee Tuesday on a mostly party-line 12-7 vote. It’s one of several GOP-backed bills this session that either mandate or allow partisan judicial elections. Another, HB 464, failed on the House floor last week, 49-51.
Heard in the Halls
“Almost all of my animals are rescue animals, including my children.”
—Sen. Chris Friedel, R-Billings, during a Feb. 27 hearing on Senate Bill 504, a bill sponsored by Sen. Willis Curdy, D-Missoula, concerning veterinary care of stray animals.
Revival of the TRO Carveout
Rep. Bill Mercer, R-Billings, brought legislation to the House Judiciary Committee this week that would prevent courts from granting temporary restraining orders against the state, its officers and other political subdivisions without notice. House Bill 695 draws heavily from language that was amended out of another injunctive relief bill, Senate Bill 191, sponsored by Sen. Steve Fitzpatrick, R-Great Falls.
Under the current legal framework, restraining orders can be granted by courts without notifying the opposing party if a delay would result in immediate harm or if the party seeking the order can demonstrate unsuccessful attempts to provide notice. However, Mercer argues that locating a government officer or agency to deliver the notice should be feasible in most cases.
He stated that locating the attorney general and identifying counties and cities is a straightforward task. However, it becomes extremely challenging to fulfill the mission when faced with an enforcement obligation while being restrained and without the chance to argue before the court that a temporary restraining order (TRO) is unsuitable in this situation.
Mercer pointed to multiple court cases in the last two years where that has been an issue. One case concerned a proposed ballot initiative from 2022 that would cap property taxes in Montana. In that litigation, the Montana Federation of Public Employees sued the state to stop signature gathering on the initiative, successfully obtaining — without notice — a restraining order against the initiative from a district court.
Fitzpatrick’s SB 191, which instructs courts to adopt the federal criteria for granting preliminary injunctions, a comparable court order, swiftly passed through the legislative procedure and is currently awaiting the governor’s approval. Initially, the bill included language resembling Mercer’s bill, but this provision was removed through amendments as it progressed through the Legislature. Fitzpatrick explained that he included the unnoticed TRO language at the behest of the attorney general’s office.
Mercer’s bill, which passed out of committee on Feb. 28, differs from Fitzpatrick’s bill in two main aspects. Firstly, Mercer’s proposal expands the carveout to include local governments, while Fitzpatrick’s bill solely focuses on the state. Additionally, HB 695 includes an exemption for family law cases, whereas SB 191 does not.
—Arren Kimbel-Sannit
Eye in the Capitol
House Speaker Matt Regier, R-Kalispell, testifies Feb. 27 on his House Bill 721, a bill banning surgical abortions after 12 weeks of gestation, as his counterpart across the aisle, House Minority Leader Kim Abbott, D-Helena, frowns.
Background Reading
Fifty years later, is Montana’s ‘Right To Know’ working?: For more on Montana’s right-to-know laws, check out this deep dive on the occasion of the state Constitution’s 50th anniversary. (MTFP)
$2 billion coal trust proposal gets a hearing: Capitolized took a look at Lynch’s proposal and the intricate political dynamics underlying the budget process last week. (MTFP)
Republican lawmaker advancing changes to how courts issue injunctions: Confused by all the changes to Montana’s injunction and restraining order laws? See this story from the beginning of the session about Fitzpatrick’s bills. (MTFP)
