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
Both the House and the Senate will spend most or all of Wednesday and Thursday in floor sessions to consider the dozens of bills that have yet to receive full votes before their respective chambers. General bills — those that don’t have budget implications — must be transmitted to the second chamber by the end of Friday, March 3, the 45th day of the 2023 Legislature. Proposals that don’t meet that deadline are presumed dead. Lawmakers will use Friday to mop up 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
A one-page piece of legislation that would move $2 billion from the state’s General Fund to the interest-bearing coal severance tax trust fund failed to make it out of the Senate Local Government Committee Tuesday.
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.
“When you look at all of the buckets, it’s for infrastructure grants, it’s for planning grants, it’s for water, it’s for wastewater,” Lynch told Capitolized last week. “It touches all facets of Montana and it touches all corners of Montana. And I would challenge anybody to argue that the coal trust fund is a bad idea.”
The trust currently generates about $35 million in interest annually. An investment of $2 billion would generate about $80 million in additional interest annually, legislative staff told the committee during the bill’s hearing on Monday.
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 repeatedly badgered Lynch, trying to get him to admit that he was either trying to railroad other spending priorities, such as GOP-backed tax rebates, or surreptitiously get Democratic proposals into the budget. And if the proposal got to the governor’s office — “which it probably won’t,” Fitzpatrick told Lynch — and gets vetoed, what happens to the $2 billion then?
“If he vetoes it and leaves a $2 billion ending fund balance, would that be a successful end of the session for the people of Montana?” Fitzpatrick asked.
Lynch was steadfast in defense of the bill, if with tongue partially planted in cheek.
“Are you trying to kill the rebates?” Fitzpatrick asked.
“Nope,” Lynch responded.
Money generated by the coal trust can be used to fund all sorts of priorities, Lynch maintained. And the $2.4 billion surplus figure could grow with future revenue estimates, he said.
“Obviously,” he continued, “budgets are about decisions.”
Republican lawmakers said Tuesday they were concerned about the possibility of blocking policy priorities that both Democrats and Republicans share, like improvements to the state hospital at Warm Springs.
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.”
Some GOP committee members expressed interest in the idea, even if they weren’t prepared to support it in its current form.
“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.
Two other bills in what lawmakers have dubbed the “six-pack” passed final Senate votes Tuesday. They now head to the desk of Gov. Greg Gianforte.
- 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.
Another two bills advanced by Gianforte and legislative Republicans cleared their own preliminary votes in the House Tuesday:
- 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.
Courts under current law can grant restraining orders — orders that preserve the status quo during a legal proceeding — without notice to the adverse party when delay would cause immediate harm or when the party seeking the order can prove that they attempted to give notice but were not successful. But Mercer said it should almost always be possible to locate a government officer or agency to give notice.
“It’s easy to find the attorney general, it’s easy to find counties and cities,” he said. “It’s very difficult to meet that mission when you have an enforcement obligation when you’ve been enjoined and you haven’t even had the opportunity to say to the court, ‘Wait a minute, a TRO [temporary restraining order] isn’t appropriate here.’”
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 directs courts to adopt the federal standard for granting preliminary injunctions, a similar form of court order, flew through the legislative process and now awaits the governor’s signature. Originally, the bill contained similar language to Mercer’s bill, but that provision was amended out as it made its way through the Legislature. Fitzpatrick said at the time that he’d inserted the noticeless TRO language at the request of the attorney general’s office.
The main difference between the two bills is that Mercer’s proposal extends the carveout to local governments, whereas Fitzpatrick’s bill addresses only the state. HB 695 also provides an exemption for family law cases, whereas SB 191 does not. Mercer’s bill passed out of committee 14-5 on Feb. 28.
—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)