District Court Hears Oral Arguments in Lawsuit Over Marijuana Funding Bill  

Attorneys representing conservation groups and Montana’s 56 counties on Thursday morning urged a Lewis and Clark County District Court judge to allow the Montana Legislature to override Gov. Greg Gianforte’s veto of a popular bill that would have reconfigured how marijuana tax revenue is distributed.

Introduced during the 2023 legislative session, Senate Bill 442 allocates recreational marijuana tax revenue between county road funding, conservation and recreation programs, addiction treatment, veterans’ services, and the state’s General Fund. The proposal would reconfigure the existing marijuana tax revenue model that the Legislature approved in 2021.

Senate Bill 442 passed the Legislature with the support of 130 of Montana’s 150 state lawmakers, cruising through Helena with rare bipartisan support during a session defined by political contention. 

“An exceptionally large supermajority passed Senate Bill 442. It’s clear that it was the Legislature’s will that they wanted it passed,” Noah Marion, state policy director for Wild Montana, one of the conservation groups suing the state, told the Beacon.

Despite the bill’s broad support, procedural muddiness at the tail end of the session effectively killed the legislation, shocking the lawmakers who supported it and prompting accusations that the governor’s office used a last-minute veto to ensure the bill’s defeat.

In oral arguments in Helena on Thursday, lawyers representing Wild Montana, the Montana Wildlife Federation and the Montana Association of Counties (MACo) argued that under the constitutional rules that govern veto proceedings, the Legislature should be granted permission to override Gianforte’s veto through a mail-in poll, the standard procedure for overriding vetoes after the session’s adjournment. The conservation groups and MACo filed separate lawsuits against the governor and the secretary of state earlier this year, which have since been consolidated.

District Court Judge Mike Menahan is presiding over the case.

According to the plaintiffs’ attorneys, the state Senate was not made aware of Gianforte’s veto before it voted to adjourn for the session, given that no precise record exists of when exactly the veto was handed down. The governor’s office has reported that Gianforte issued the veto “sometime in the 2 o’clock hour” on May 2. By the time the Senate voted to adjourn for the session at 3:20 p.m., the veto had not been read over the rostrum and a number of senators say they were unaware that the bill had been vetoed. The House of Representatives had not yet adjourned, and the veto was read over the House rostrum before adjournment later that evening. Because the Senate was not made aware of the veto before adjournment, a number of lawmakers assumed the body would be able to override the veto by mail.  

The executive branch, however, disagreed. The governor’s office argued that because the veto technically came down before the Senate adjourned, the opportunity for an override had passed.

Attorneys for the conservation groups and MACo disputed the executive branch’s reading of the Constitution’s veto provisions, arguing that Gianforte was derelict in his duties to carry out the override process, inhibiting the will of the Legislature to enact a widely popular law.

“By virtue of the veto’s timing, the Legislature had no opportunity to override the Governor’s veto,” the lawsuit filed by the conservation groups states. “…While the Governor has the constitutional authority to veto SB 442, he cannot veto SB 442 or any other law in a manner that interferes with the Legislature’s constitutional authority to override that veto.”

Mike Black, attorney for MACo, argued that the Legislature explicitly constitutes both the House and the Senate, and that once one chamber adjourns, the Legislature is not in session. Because the governor’s veto was transmitted to the House but not officially read to the Senate, Black said, the Legislature was not technically in session, and post-session override proceedings are in order.

“The House is not the Legislature. The Legislature is both houses,” Black said.

Black also maintained that MACo believes there is “no evidence” that Gianforte’s veto came down before the Senate’s adjournment. The attorney said the burden of proof rests on the governor’s attorneys to provide an exact time that the veto came down, which they did not provide. Black said he checked the files of the Senate, and there is no record of when the veto was received.

“The governor has not raised a genuine issue of material fact as to when this veto occurred,” he said. 

Rylee Sommers-Flanagan, the attorney representing Wild Montana and the Montana Wildlife Federation, said the language outlining veto override proceedings is “unambiguous” and that “the governor’s authority must be exercised in compliance with the provisions of the Constitution.”

“The reality is that the intent here was very clear,” Sommers-Flanagan said of the Constitution’s language surrounding vetoes. “It was to make sure that in every circumstance, the Legislature could exercise its override authority.”

Black and Sommers-Flanagan argued that allowing Gianforte’s veto to stand would set up a dangerous precedent in which the governor is able to veto bills at the eleventh hour, skirting the constitutionally protected override process.

“The opportunity for mischief is there,” Black said.

Dale Schowengerdt, attorney for the governor’s office, argued that the conflict over Senate Bill 442 is a political issue that should be ironed out outside of the court. Schowengerdt said that if the Legislature would like to override the governor’s veto, it can call a special session, a legislative tool that some lawmakers have proposed to remedy the state’s rising property taxes. The attorney also argued that if the Legislature wanted to put guidelines in place for vetoes that come in after one chamber has adjourned, it should have done so during the session.

“If it’s a concern of the Legislature, they’re not powerless to do something about it,” Schowengerdt said.

The governor’s attorney contradicted the testimony of the plaintiffs’ attorneys, arguing that the governor vetoed Senate Bill 442 while the session was ongoing, leaving him with no other provisions to follow.

“What else was the governor supposed to do?” Schowengerdt asked.

An attorney for Secretary of State Christi Jacobsen, who is also named as a defendant in the lawsuit, spoke briefly, arguing that the secretary of state is not involved in this dispute and cannot take any further action on the bill at this time.

Sommers-Flanagan pushed back on Schowengerdt’s argument that the Legislature should convene a special session to override the veto, contending, “There is no duty on the Legislature to ask the governor to go do his constitutional duty, although they have asked.”

The Thursday morning hearing marked the latest development in an unfolding conflict between the Gianforte administration and local municipalities about how to best spend tax revenue, and who is best suited to spend it.

If passed, Senate Bill 442 would have allocated a large sum of marijuana tax revenue to Montana’s counties for road repair. County officials and environmental groups say repairing rural access roads across the state is critical in connecting small communities to emergency resources and making Montana’s public lands accessible.

However, in his veto letter, Gianforte painted the bill as a “slippery slope” towards unrestricted spending by the counties, saying that directing marijuana revenue towards public works projects would make counties less likely to address needs with local tax dollars.

“We certainly have this disconnect between local government and the state, both the Legislature and certainly this administration,” Ross Butcher, a Fergus County commissioner and the president of MACo’s executive committee, said. “I’ll stand by the kind of understanding in government which is, the closer to people you are, the better you are with the money.”

Thursday’s hearing came a week after a group of Republican lawmakers called for a special session to iron out issues over rising property tax bills, a battle that has again pitted Gianforte’s office against the counties. While the governor has argued rising taxes are due to inefficient spending by local governments, county officials have pointed to a failure by the state to adjust tax rates in light of rising property values.

“There’s so much churning around with taxes in general,” Butcher said. “I feel the angst that’s built up between the Legislature, the governor and local government.”

The MACo executive said he hopes the court will recognize the broad support for the bill and allow the Legislature to move forward with an override vote.

“You shouldn’t be able to cut the legislative body out of their different options when it comes to their legislative function, which in this case would be overriding a veto,” Butcher said.