“SB442 is a shining example of how democracy is supposed to work, and vetoing it ignores this will of over 130 legislators, numerous counties, farmers, ranchers, veteran groups, conservation groups, and thousands of other Montanans.”
By Blair Miller, Daily Montanan
The Montana Legislature adjourned the 2023 session on Tuesday—the 87th day of the session—finishing up the budget and signing off on millions of dollars’ worth of major infrastructure, pension and other spending projects.
The session involved lofty goals from a Republican supermajority, a surplus that topped $2 billion, a series of major tax cuts, long discussions over LGBTQ+ rights and attacks on them, a Medicaid provider rate saga that lasted four months, the censure of a transgender lawmaker, one of the longest sessions in recent history, and major deals over the last couple of weeks.
On the final day, there was one more surprise in store: The fight over Montana’s marijuana tax revenue might continue beyond the final gavel.
Republican Gov. Greg Gianforte vetoed Senate Bill 442 Friday afternoon sometime around the time the Senate voted to approve a sine die motion from the minority leader to end the body’s work for the 2023 session.
The timing of the veto was still unclear late Tuesday, but it set off a flurry of activity at the Capitol on Day 87, as lawmakers, lobbyists and legal officials tried to figure out if the broadly supported bill was totally dead or if legislators still had other options to make it law.
Sen. Mike Lang’s bill redisperses the $50+ million in marijuana tax revenues to county roads, a Habitat Legacy Fund, trails, parks and recreation, the HEART Fund, and veterans’ services. It passed the Senate Monday in a 49-1 vote after it got 82 votes in favor in the House.
But Senate Majority Leader Steve Fitzpatrick, R-Great Falls, has said repeatedly over the past week that the governor would veto the bill, and a spokesperson for the governor said Monday Gianforte had “substantial concerns” about it.
From the start of 2022, when recreational marijuana sales started, through March, the state brought in $58 million in tax revenue, and sold around $25 million each month.
But legislators disagree on how the money should be spent and whether voters appropriated money by the I-190 that legalized marijuana. Competing bills aimed to put nearly all the money to the general fund, or to law enforcement, but were killed off during the process.
The concerns from the governor’s office involved the ongoing funding of the Habitat Montana through the revenue as well as the legislature’s decision not to put more of the money toward the Department of Justice.
Over the past couple of weeks, bills that have passed both chambers have generally taken a few days to be enrolled, signed by the Senate president and House speaker, and then delivered to the governor’s desk. But SB442 went through all of those steps within 24 hours—which some lawmakers also said was not atypical for priority bills.
On late Tuesday afternoon, Kaitlin Price, a spokesperson for the governor’s office, said she believed the governor signed the veto letter “sometime in the 2 o’clock hour.”
The Senate had been on a break during that hour, but the body came back to do third readings on a series of bills at 2:45 p.m. About half an hour later, at 3:18 p.m., Senate Minority Leader Pat Flowers, D-Belgrade, made the motion to sine die, which was agreed upon in a 26-23 vote at 3:19 p.m.
Many of the Republicans who voted in favor of adjourning were also supporters of Lang’s bill who appeared with the Malta Republican at a news conference on Monday urging the governor to sign the bill.
Before floor sessions, lawmakers were seen gathered devising plans for how to make Lang’s bill the final one standing, and some met changes made to other senators’ bills—to try to revive different policies—with swearing in the hallways at times.
As lawmakers cleaned out their desks to head home, word trickled out that Gianforte had vetoed the bill backed by a wide swath of groups and organizations spanning the political spectrum, along with the 131 lawmakers who supported the legislation.
Fitzpatrick said he believed lawmakers who voted in favor of the sine die motion wanted to adjourn before Gianforte could veto the bill so they could take the override to a poll post-session that Lang said he thought would overrule the governor’s decision.
“The governor’s veto came in time, and because they’ve sine died now, all those guys just lost a chance to have a veto override,” he said about an hour after the Senate had adjourned.
“Those guys just screwed themselves, so it really is kind of an ironic twist to it all.”
The legislature is allowed to try to override a veto from the governor through physical polls mailed to them if the veto happens after both chambers adjourn. It can also override a veto if both chambers are in session still, and each chamber votes with a two-thirds majority in favor of the override.
But Fitzpatrick and others with deep knowledge of the legal and legislative processes said the veto, and the Senate’s adjournment, have killed the bill entirely.
“We are not still in session, right? That bill is dead,” Fitzpatrick said.
Lang, who is term-limited, said he was surprised the bill had moved to the governor’s desk so fast and that he did not know it had been enrolled when he and others voted to adjourn. He said he believed the bill would get vetoed after the legislature adjourned, and that the Senate and House had the votes to override the veto.
“I’m very disappointed; I think it’s a setback for Montana,” Lang told reporters. “What we tried to do with the bill was get everybody together to build some habitat, build some good relations out there in the land.”
Several Democratic supporters of the bill were upset about how it got vetoed. And some lobbyists who supported the bill said they felt the governor’s veto letter contained falsehoods—first, claiming it did not contain an appropriation though that money is appropriated in House Bill 868, and second, that the money is coming from the general fund when it is coming from the marijuana state special revenue account.
While Lang’s bill became a broader effort over time, two of the groups that had worked the hardest to keep the Habitat Montana funding from the marijuana tax revenue intact issued a statement saying they were “incredibly” disappointed by the governor’s veto but would press forward to try to override it.
“SB442 is a shining example of how democracy is supposed to work, and vetoing it ignores this will of over 130 legislators, numerous counties, farmers, ranchers, veteran groups, conservation groups, and thousands of other Montanans who supported SB442,” said the two groups, Wild Montana and the Montana Wildlife Federation, in a statement. “We’ll keep working to get this bill over the finish line, and we look forward to continuing working with county commissions, our neighbors in agriculture, and so many others who fought to build a bill that invests in all of us.”
What happens from here remains to be seen, but some in the building discussed possible legal action despite a consensus from some that the bill is dead for good.
The House and Senate leadership will hold news conferences and interviews on Wednesday morning to talk about the session, described by several lawmakers in their final words as one to remember in many ways.
But Lang is disheartened that his work on the bill—which has been praised by many lawmakers of both parties and local governments—is not likely to be made into law.
“I’ve had defeats in my life before. There’s lots of worse defeats in the world. You’ve got to go on and hope these guys will pick it up and go the next time,” he said. “I’m really discouraged Montana’s not going to get a chance to work through this process.”
See below for a story on earlier developments…
Montana Lawmakers Pass Bill To Revise Marijuana Tax Revenue Allocations, But Governor Has ‘Substantial Concerns’
“You know the position of the Governor’s Office. It’s clear they’re going to veto that bill; they’ve said that multiple times.”
By Blair Miller, Daily Montanan
The fight over Montana’s marijuana tax revenue may have reached a resolution Monday despite what a Democratic lawmaker called “shenanigans” on the House floor just hours after the Senate sent the bill with the broadest support to the governor’s desk.
But whether the part of the law that says how the $50+ million in annual revenue is portioned out changes remains to be seen, as Republican Gov. Greg Gianforte is unlikely to support the broadly praised Senate Bill 442, lawmakers have said in recent days and his office hinted Monday.
“The governor has substantial concerns with Senate Bill 442,” Kaitlin Price, a spokesperson for the governor, said in an email Monday afternoon.
The Senate voted 48-1 to pass SB442, sponsored by Sen. Mike Lang (R) on toward the governor’s desk—typically the legislature’s final step with respect to any bill, though it could have to vote to override a potential veto after the session is over.
SB442 puts 20 percent of the marijuana tax revenue toward county road construction and maintenance; 20 percent to a new Habitat Legacy fund; 12 percent toward state parks, trails, facilities and nongame accounts; 11 percent toward the HEART fund and five percenbt to veterans and surviving spouses. The general fund will receive around $13 million a year.
Should the bill not get to the governor’s desk until after the legislature votes to end the session this week, and should he veto it, lawmakers would be sent physical polls to vote on whether to override Gianforte’s veto. Anyone who does not return the poll would be considered a vote against the measure. Two-thirds of both chambers would have to agree to override a veto.
Lang, other lawmakers from both parties, and nearly 100 businesses and organizations from across the political and business spectrums support the Malta Republican’s bill, which several have said took months of work and compromise to reach its final form and gain the wide support.
Several of those groups and lawmakers from both parties gathered for a news conference at noon Monday to urge Gianforte, a Republican, to sign the bill an hour before the Senate sent it to his desk.
“We have overwhelming support, both in this room and both chambers of the Montana Legislature,” Lang told the dozens gathered in the old Supreme Court chambers of the Capitol. “The good thing about it is it spotlights many Montanans: ranchers, farmers, county commissioners, hunters, anglers, hikers, four-wheelers, veterans, home health care providers, energy people, and also many others who have been instrumental in pushing this across the floor.”
But last-minute changes to another bill made last week put in competing language surrounding what was in two other bills killed off by lawmakers over the past two months, which drew ire from members of both parties supporting Lang’s bill and opposed to continuing to find a way to reallocate the revenue toward the governor’s or other lawmakers’ priorities.
“This amendment erases that conversation from the bill,” said Rep. Mike Hopkins (R) who sponsored the 2021 bill that created the current revenue streams and laid out the framework for the recreational industry.
Rep. Katie Sullivan (D) said all of the last-minute changes left her feeling like there were “shenanigans afoot,” calling the measure and the late amendments “a vehicle for dishonesty.”
“I’m very concerned if this bill goes out, we’re going to see it back with some policy and revenue choices in it we don’t want to see,” she said. “Let’s say enough of the shenanigans; let’s get back to serious business.”
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Monday’s actions were about three months in the making.
As House Republicans pushed to get more of the marijuana tax revenue put toward the general fund and the Department of Justice, some of them arguing that citizens had appropriated money via the I-190 ballot initiative in 2020 despite the legislature setting up the current framework in the 2021 session, Lang’s bill became a new vehicle for compromise between groups supporting the Habitat Montana program, other conservation and trails programs, county roads, the governor’s HEART fund and veterans services.
In late March, the Senate Finance and Claims Committee, on which Lang sits, amended his bill that was originally aimed at putting much of the revenue toward county road maintenance, to put it close to where it sits today. The bill passed out of the committee unanimously.
The Senate sent the bill over to the House in a 49-1 vote on April 4. Two weeks later, nearly 50 proponents of the bill showed up to the House Taxation Committee to voice their support, and Lang, who is term-limited, grew emotional as he closed on the bill, telling the committee it should pass it because of the array of backers and the hard work getting to that point.
The committee added on an amendment requested by the Department of Fish, Wildlife and Parks and cleared the bill out of committee in a 17-6 vote. It then saw 84 House members vote in support of the bill on second reading in the House.
SB442 then went to the House Appropriations Committee, where several members who have backed the theory that the citizens illegally appropriated the money by initiative sit – including Rep. Bill Mercer (R), whose House Bill 669 was a major competitor to Lang’s bill, as it aimed to put all the money in the general fund starting in 2025.
Though the committee chair and another member, Rep. John Fitzpatrick (R), had drafted amendments to the bill, when it came up for executive action, Fitzpatrick said in his 40 years at the Capitol, he didn’t think he’d seen a measure draw so much input from the public.
“Constituents back home say they like the bill exactly as is,” he said. “That’s kinda where I’m at.”
Rep. David Bedey (R), who was among the group backing Mercer’s bill, said he had the same perception as Fitzpatrick, telling the committee, “I think we should move this bill exactly as it is.”
The bill passed House Appropriations in a 17-6 vote, then passed third reading in the House 82-17 on April 26—seemingly clearing its path to the governor’s desk because of the friendly House amendment and wide support in the Senate.
But there remained tension as to what was going to happen with the marijuana revenue, according to multiple lawmakers and lobbyists who have worked on the bill. Senate Finance and Claims sat on Mercer’s bill for executive action for eight days until it finally moved to kill the bill unanimously on April 26.
And even that was not the end of the marijuana revenue saga. After Mercer’s bill was tabled, similar language was added back into another bill with a broad title: Senate Bill 538, “Generally revise marijuana laws,” from Sen. Chris Friedel (R).
The original version of the bill had nothing to do with dispersing the marijuana tax revenue. But the day Mercer’s bill was tabled by Finance and Claims, House Appropriations amended SB538 to include language that was a mix of Mercer’s bill and another bill from Rep. Marta Bertoglio (R), which sought to strip money from Habitat Montana and put it toward law enforcement and the general fund. Hundreds rallied at the Capitol to protect the portion of marijuana revenue funding Habitat Montana in late February.
When SB538 reached the Senate floor, its carrier, Rep. Bob Carter (D) told lawmakers he didn’t recognize the bill anymore.
“It’s not the bill that came out of Business and Labor. I can’t support it and recommend you don’t either,” he told the body.
The bill narrowly failed on its second reading in a 49-50 vote. But shortly afterward, Hopkins asked the body to reconsider the bill, saying it was part of a larger conversation about marijuana policy and revenue that is still ongoing. The House voted 50-47 to reconsider the bill.
Last Friday, during a Senate Republicans caucus meeting, Lang asked President Jason Ellsworth (R) and Majority Leader Steve Fitzpatrick (R) about SB442’s status along with SB538, saying he was concerned about his bill.
“You know the position of the Governor’s Office. It’s clear they’re going to veto that bill; they’ve said that multiple times,” Fitzpatrick responded.
He and Ellsworth said there were three key bills—House Bills 128 and 903, and SB538, which each make marijuana statute changes to shore up HB701—that needed to pass in order to keep the current system from collapsing and marijuana businesses popping up all over the state.
Ellsworth said he thought “we are going to end up in conference committee” as SB538 came back to the Senate along with SB442.
The Senate voted Saturday to pass the amended version of SB442 in a 48-2 vote, setting up the third-reading vote on Monday.
But with Friedel also unhappy about the changes to his bill, and Hopkins mostly reserved to changing the policy instead of the revenue allocation, the House on Monday considered an amendment brought to the floor to strip out all the changes made by Appropriations to HB538 to put it back to the form in which it left the Senate—taking out all of the revenue allocations.
Rep. Tanner Smith (R), who is ardently opposed to the expansion of legalized marijuana in Montana, agreed, saying there was no one who understood what was going on behind the scenes and that there was “stinky stuff” passing through in the final days of the legislative session, which must end on Friday at the latest.
Initially, the amendment appeared poised to fail, as it briefly reached a 48-50 vote before what several lawmakers described as a “computer glitch.” The second time, the body voted 55-45 to adopt the amendment to strip out the language about the revenue streams.
After a brief closing from Hopkins, who said he was not trying to hide anything about what was happening between the bills, the House voted overwhelmingly, 38-62, to table SB538 again, where it and the competing revenue language is likely to stay, lawmakers and lobbyists said. It received votes from just over half of the House Republican caucus.
Another of Hopkins’ bills with a broad marijuana title, House Bill 229, was voted out of a free conference committee earlier Monday without changes to add in the revenue language, as some at the Capitol thought might happen. And unless lawmakers find another bill to fit the competing language into this week, as most want to sine die and head home, it appears any changes to how the estimated $110 million in revenue over the next biennium is dispersed could rest with the governor’s pen.
“Thank you for the kind words about 442 and about Montana,” Lang told the gathering of citizens, lobbyists and lawmakers at Monday’s press conference about the bill, singing its praises about the wide array of areas of the state it would touch.
“This bill deserves to be signed by our governor,” he said.
Photo courtesy of Chris Wallis // Side Pocket Images.