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March 24, 2023

A deep-dive fiscal note requested by legislative Democrats and distributed Friday says that Montana could lose “any, all or none” of its $7.5 billion federal special revenue authority — federal grants, in other words — if Senate Bill 458, legislation to define “sex” in Montana law, is enacted. 

The bill, sponsored by Sen. Carl Glimm, R-Kila, inserts a definition of sex based on a person’s reproductive characteristics into more than 40 sections of state code — necessary, Glimm says, in order to clear up confusion between “sex” and “gender” in statute. 

But critics of the bill say it will effectively eliminate legal recognition in the state of transgender, nonbinary and intersex people, branding it as another attempt to restrict the expression of LGBGT+ people in Montana. Outside of the policy itself, opponents of the bill have also warned that its wide-reaching nature could generate a substantial logistical cost for the state as well as jeopardize federal funding due to potential conflicts with anti-discrimination laws. 

The original fiscal note listed a $0 cost to the state, though technical notes from the Montana University System and the state Department of Corrections warned that possible non-compliance with federal law could cost the state a substantial sum in legal fees. The bill passed the Senate shortly after the transmittal break and now awaits a committee hearing in the House. 

In light of that $0 price tag, Democrats this week asked for a new fiscal note — this time from legislative fiscal analysts, rather than the governor’s budget office, which generally conducts fiscal analysis of proposed legislation. Their request specifically sought to quantify how much federal money could be on the line if the warnings of opponents come true. They did not ask the Legislative Fiscal Division to estimate potential legal expenses.

“The original fiscal note in my mind just raised questions about what the actual fiscal implications were,” Senate Minority Leader Pat Flowers, D-Bozeman, said in a press conference Friday. 

The new note still leaves some big questions unanswered. The fiscal division, in concert with legislative staff attorneys, determined that whatever risk to federal funding exists, the cost would depend on how the state implements the bill if passed — hence the “any, all or none” language.

The total amount of federal special revenue funds appropriated in the 2023 fiscal year is $7.5 billion, compared to about $4 billion in actual funding the previous year. 

“In addition, federal revenue authority received by the Montana University System directly from the federal government may be impacted depending on how the universities choose to implement SB 458 if it were to pass,” the note says.

In the 2022 fiscal year, that sum was about $312.5 million. 

The new fiscal estimate comes with a substantial footnote laying out case law and uncertainty about how the bill would be implemented.

The basic conflict is this: “The definitions provided in SB 458 do not appear to have any impact on the inclusion of sexual orientation under the protected class of sex, but may be an issue when considering gender identity since the definitions rely on biological and reproductive elements of a human being rather than an individual’s subjective identity as any gender,” the note states. “Therefore, under the SB 458 definitions, a transgender individual may be required to only identify as either male or female based on biology, rather than their preferred gender under Montana statutes that use the words ‘sex,’ ‘male,’ or ‘female.’”

And, as the other half of the equation: “Federal laws and contracts often require a state’s compliance with non-discrimination laws as a condition of federal funding.” 

Under the U.S. Supreme Court’s 2020 ruling in Bostock v. Clayton County, a Georgia discrimination case involving a gay county employee, the 1964 Civil Rights Act protects employees from discrimination based on their identity as gay or transgender. Federal agencies have been directed to “apply the same interpretation to other federal laws that prohibit sex discrimination, such as Title IX,” the note says — but that’s new under the Biden administration. 

That said, the bill doesn’t direct agencies how to implement the new definition of sex. There’s nothing to say that state government definitively will implement the bill in a way that violates a person’s right to employment under federal discrimination law, the note reads.

Under statute, state employers should already not be using sex as a determining factor when hiring. 

“On the other hand,” the note says, “an argument can be made that defining male and female to the exclusion of a transgender individual may then allow a state or local governmental entity to use that characteristic to discriminate.

“Furthermore, considering that the terms are currently used in Montana code, yet undefined and presumably understood by state agencies in regular operation, it is uncertain in what way these definitions will impact or change the way state agencies operate,” the note continues. “Therefore, much like the issue for the federal laws, the supervision by the governor over the executive branch will dictate to what extent these definitions are applied and used for day-to-day operations.” 

—Arren Kimbel-Sannit

Bill Report

House Bill 2, the Legislature’s $14.3 billion budget proposal, passed the House floor on party lines following a day-long debate Wednesday, 68-32. Republicans held together to vote down more than a dozen amendments from House Democrats, who argued the budget didn’t invest enough in affordable housing, childcare and other priorities. The one defection came on an amendment from Rep. S.J. Howell, D-Missoula, that would strip from the budget about $8 million to transfer 120 state inmates to a private prison operated by CoreCivic in Arizona. That funding was added in the House Appropriations Committee last week. Howell’s amendment failed, but she did pick up a vote from Rep. Jennifer Carlson, R-Manhattan. “I really have a problem voting for things I fundamentally disagree with,” Carlson told the Helena Independent Record after Wednesday’s vote. HB 2 now awaits a hearing in the Senate Finance and Claims Committee. 

Senate Bill 99, Montana’s ban on gender-affirming medical treatments for transgender minors, cleared the House Friday — the last major hurdle anticipated in the bill’s path to Gov. Greg Gianforte’s desk. The 65-34 vote was largely along party lines, with three Republicans joining Democrats in opposition. The bill will now return to the Senate, where it passed in February by a comfortable margin, for consideration of two additional amendments added by House lawmakers. One clarifies that Montana patients with public insurance can seek care at out-of-state medical facilities for anything other than the procedures outlined in the bill. The other shortens the window for lawsuits to be filed against medical providers. The bill’s sponsor, Sen. John Fuller, R-Kalispell, told Capitolized Friday that those amendments are “not going to be a problem” for the bill’s trajectory.  

By the Numbers

Number of amendments that Democrats brought to the main budget proposal, House Bill 2, during debate on the House floor Wednesday. Republicans voted each amendment down.

Heard in the Halls

“I’m afraid I’d spend way too much time in casinos if this were to pass.”

Sen. Forrest Mandeville, R-Columbus, half-jokingly explaining his “no” vote on House Bill 771, legislation proposed by Rep. Ed Buttrey, R-Great Falls. The bill would allow bars and other alcohol retailers to employ electronic — or “robot,” as some have said — beverage dispensers, similar to the digital soda machines in some restaurants. The devices must use “predetermined limits … to measure and supply customers with a predetermined volume of beer or wine.” The bill failed in the Senate, 13-37. Buttrey’s is one of several alcohol-related bills this session, some of which are part of Gov. Greg Gianforte’s deregulatory “red-tape relief” efforts. 

On Background

Defining “sex” — Part II: For more on the debate over SB 458’s fiscal note, see this story. (MTFP)

Why Montana might start sending prisoners to Arizona: For more on the plan to transfer 120 state inmates to a private prison in Arizona, see this previous reporting from Capitolized. (MTFP)

State budget clears initial vote in HouseThe Helena Independent Record has more on Carlson’s vote on the CoreCivic amendment — and the reaction she received from others in her party. (Helena Independent Record)