What Passed and What Failed at the Montana Legislature

A roundup of key bills and policy changes debated in Helena this session

The 65th Montana Legislature adjourned on a note of acrimony April 28 when lawmakers voted to end the session early without passing a sprawling infrastructure package to pay for a growing queue of road, sewer and building projects.

It was the second session in a row that the issue of whether to pay for the projects through bonding was effectively hamstrung by a conservative bloc of House Republicans, and debate over the merits of borrowing money while interest rates are hovering at historic lows — as well as the challenging work of balancing a two-year budget during a year characterized by belt-tightening — dominated much of the 90-day marathon.

But the roster of 150 lawmakers also managed to find common ground during their time together in Helena and ushered a suite of significant bills across the finish line, including measures that made substantial revisions to tax policy, public safety, energy, campaign finance, health care, education, and other areas.

Here’s a peek at what passed and what failed at the 2017 Montana legislative session.

Budget

Passing the state budget for the 2018-2019 biennium was the Legislature’s lone mandatory job, and it came in at $10.3 billion, leaving about $200 million in reserve even as most state agencies experienced across-the-board cuts or saw positions eliminated to make up for the revenue shortfall.

The general fund budget is akin to the state’s checkbook, with money largely coming from state taxes and investment earnings. The Legislature also created a budget stabilization reserve fund through Senate Bill 261, with rules to allow the governor to respond more quickly to future revenue drops.

In the final days of the session, state leaders determined which programs and services should be cut if the state doesn’t bring in as much money as expected over the next two years, thus triggering a formal strategy to accommodate economic fluctuations.

Taxes

The Legislature approved the state’s first tax increase on gas and diesel in a quarter of a century, with the proceeds to pay for deteriorating highways and bridges in every corner of Montana.

Under the bill carried by Rep. Frank Garner, R-Kalispell, taxes on gasoline will rise by 6 cents a gallon and on diesel by 2 cents a gallon by 2023. An earlier version of the bill proposed hiking the gas tax by 8 cents a gallon and on diesel by 7.25 cents a gallon.

The proposal raises nearly $28 million in special revenues for the Department of Transportation during each of the next two years, with revenues expected to rise more than $31 million annually thereafter. The amount of money available to the state for road construction would be multiplied by seven because the money would trigger an infusion of federal matching funds.

It also creates a website to promote transparency, allowing Montanans to see what projects the gas tax funds and how much they cost.

Fees also went up on motor vehicle registrations for luxury vehicles worth more than $150,000, dubbed the “Ferrari Tax.”

Fishing license fees were raised to fund efforts to prevent the spread of aquatic invasive species like quagga mussels, while a separate fee was imposed on hydroelectric dams.

Lawmakers also passed tax policy bills meant to attract new businesses and return some money to low-income residents.

Infrastructure

Despite the failure of a major infrastructure package that included projects in “urban” areas, legislators did approve about $173 million in cash to pay for water, wastewater, road, and bridge projects mostly in rural areas of the state, and authorized the spending of hundreds of millions more in federal funding for highway projects.

The broken-down measure, which Republicans ultimately rejected moments before adjourning after days of failed negotiations with Democratic Gov. Steve Bullock, would have paid for a slate of other projects including building projects at state universities and colleges, a veterans’ home in Butte, and a historical society.

Another casualty of the Legislature’s failure to pass an infrastructure package was House Bill 8, which contained several rural water projects in eastern Montana and became a political bargaining chip in the waning days of the session with House Democrat leadership.

Health Care

Lawmakers passed separate bills in hopes of lowering the rising cost of health insurance, including a high-risk health insurance pool to allow out-of-state insurers to sell policies in Montana. The measures also increase the transparency of health care prices for patients and give tax credits to small companies that offer high-deductible insurance plans to their employees.

Campaign Finance

Lawmakers approved a measure to raise the amount of money that donors can give to state candidates for political office, despite pending legislation on the current limits. The Legislature also added the option of a mediator to review allegations of campaign finance violations and confirmed a new commissioner of political practices, former Democratic legislator Jeff Mangan.

Medical Marijuana

The Legislature created regulations for the medical marijuana industry after voters approved an initiative to allow dispensaries to operate in the state. The bill creates licenses and fees for marijuana distributors and requires tracking of the drug to prevent it from being sold on the black market.

Preschool

After negotiations with Bullock, lawmakers approved spending $6 million to test ways to expand 4- and 5-year-old children’s access to preschool in the state. The funding will last two years as a pilot project and be reassessed in the 2019 legislative session.

Abortion

Two bills would have limited access to abortion. Senate Bills 282 and 329 would have prevented women from having abortions at roughly 20 weeks.

SB 282, introduced by Sen. Al Olszewski, R-Kalispell, would prevent doctors from performing abortions on viable fetuses.

SB 329 by Sen. Keith Regier, R-Kalispell, would restrict abortions to fetal development to 19 weeks or less, at “pain capable.”

Both bills passed by the House and Senate, but will be vetoed by Bullock.

Guns

Two gun bills were vetoed by Bullock after they passed the House and Senate.

House Bill 246 by Rep. Randy Brodehl, R-Kalispell, would have allowed Montanans to carry firearms inside post offices, and would have allowed firearms to be stored in cars in U.S. Postal Service parking lots. House Bill 262 by Rep. Bill Harris, R-Winnett, would have significantly loosened concealed carry laws, allowing anyone of age without felony convictions to conceal a handgun.

Non-Discrimination Ordinance

House Bill 417, introduced by Rep. Kelly McCarthy, D-Billings, drew emotional testimony at a committee hearing as members of the public offered testimony both in support of and opposed to a bill to extend anti-discrimination laws to LGBTQ-identifying Montanans. The bill passed out of committee but was killed in the House.

Criminal Justice Reforms

Several bills on sentencing and prosecution standards updated existing sentencing guidelines for rape and sexual assault.

Senate Bill 29 by Sen. Diane Sands, D-Missoula, eliminated the requirement that rapists use physical force in order for their crime to be considered rape. The bill passed the Senate unanimously and awaits the governor’s signature.

Nels Swandal, R-Wilsall, a former judge and prosecutor, sponsored Senate Bill 17 to eliminate the requirement that minors register as sex offenders. While judges retain the ability to place individuals on the registry, they would have more discretion under the bill. The bill was signed into law.

Property Tax Relief

Senate Bill 94, introduced by Regier and supported by Whitefish and Hungry House Democrats Reps. Dave Fern and Zac Perry, provides relief to a narrow class of property owners, mostly near Whitefish and Flathead lakes, as well as along the Swan River, whose taxes have increased as much as an order of magnitude thanks to trophy homes built next door.

Brewery Production Cap

Both chambers passed a bill allowing Montana breweries to grow beyond 10,000 barrels of annual production without losing the ability to operate a taproom, which are limited to serving 48 ounces of beer and cannot serve past 8 p.m.

The new production cap brought by House Bill 541 sets the limit at 60,000 barrels.

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