Montana Governor Vetoes Bill To Reallocate Marijuana Tax Revenue

“SB442 demonstrates how democracy should work. By vetoing the bill, you are ignoring the will of more than 130 legislators and counties, as well as farmers, ranchers and veterans groups. You also ignore thousands of Montanans.”

By Blair Miller of the Daily Montanan

The Montana Legislature adjourned its 2023 session Tuesday, the 87th day. They finished the budget and signed off on major infrastructure projects and pensions worth millions of dollars.

A Republican supermajority set lofty goals, there was a surplus of over $2 billion dollars, major tax cuts were passed, LGBTQ+ rights were discussed and attacked, a Medicaid provider rates saga lasted for four months, a transgender legislator was censured, it was one of the longest session in recent memory, and many major deals have been made over the past few weeks.

There was a surprise on the final day: the fight over Montana’s cannabis tax revenue could continue after the final gavel.

Republican Gov. Greg Gianforte, Republican Governor, vetoed Senate Bill 442, Friday afternoon around the same time that the Senate approved a sine-die motion by the minority leader ending the work of the Senate for the 2023 sessions.

It was unclear when the veto would take place late Tuesday. However, it sparked a frenzy of activity in the Capitol as legislators, lobbyists, and legal officials scrambled to determine if this widely supported bill had been killed or if there were still other ways to pass it.

The bill by Sen. Mike Lang redistributes the more than $50 million in marijuana taxes to county roads and a Habitat Legacy Fund. It also includes trails, parks, recreation, the HEART Fund and veteran’s services. The bill passed the Senate on Monday with a 49-1 vote, after receiving 82 votes for it in the House.

A spokesperson for Gianforte said that he had “substantial” concerns about the bill. But Senate Majority leader Steve Fitzpatrick of Great Falls has repeatedly said over the last week that the Governor would veto it.

The state collected $58 million from tax revenues and sold about $25 million per month between the beginning of recreational marijuana sales in 2022 and March.

Legislators disagree about how to spend the money and whether the I-190, which legalized marijuana, was appropriated by voters. Competing bills were drafted to allocate nearly all of the money either to the general fund or law enforcement. However, they were defeated during the process.

The governor’s office expressed concern about the continued funding of Habitat Montana by the revenue, as well as the decision of the legislature to not allocate more money towards the Department of Justice.

In the last few weeks, it has taken several days for bills to pass both chambers, be signed by the Senate President and House Speaker, and finally delivered to the Governor’s desk. SB442 was able to complete all these steps in just 24 hours, which some lawmakers said is not unusual for priority bills.

Kaitlin price, a spokeswoman for the Governor’s Office, stated that she thought the Governor signed the veto “sometime around 2 o’clock.”

Senate Minority leader Pat Flowers, D – Belgrade, moved to sine die at 3:18 p.m. The motion was approved by a vote of 26 to 23 at 3:19 pm.

Many Republicans who voted for adjournment were also supporters Lang’s bill. They appeared Monday with the Malta Republican in a press conference urging the Governor to sign the bill.

Before floor sessions began, some lawmakers were seen devising ways to make Lang’s bill the last one to stand. Others reacted to changes made to the bills of other senators, in an attempt to revive different policies, by swearing.

As legislators packed up their desks and headed home, the news began to spread that Gianforte vetoed a bill backed by groups from across the political spectrum as well as the 131 legislators who voted in favor of the legislation.

Fitzpatrick stated that he believes lawmakers who voted for the sine die motion wished to adjourn the session before Gianforte vetoed the bill. This would allow them to take the override of Gianforte’s decision to a post-session poll, which Lang believed would overrule Gianforte’s decision.

He said that the governor’s veto was received in good time and, because they are now sine die, those guys have lost their chance of a veto-override.

It’s ironic that they screwed themselves.

If the governor vetoes the bill after both chambers have adjourned, the legislature can try to override it by using physical ballots that are mailed to them. The legislature can override the governor’s veto by voting with two-thirds of each chamber.

Fitzpatrick, as well as others who have a deep understanding of the legislative and legal processes, said that the Senate adjournment and Fitzpatrick’s veto had killed the entire bill.

“We’re not in session anymore, right?” Fitzpatrick stated that the bill was dead.

Lang, whose term is limited, expressed surprise that the bill was so quickly sent to the governor and said he didn’t know the bill had been enrolled at the time he and other members voted for adjournment. He said that he thought the bill would be vetoed once the legislature adjourned and that both the Senate and House of Representatives had the votes necessary to override it.

Lang told reporters, “I am very disappointed. I think this is a setback to Montana.” “What we wanted to do with this bill was to get everyone together to build habitat and build some good relationships out there in the country.”

Many Democratic supporters were angry about the veto. Some lobbyists, who were in favor of the bill, said that the veto letter was false. First, it claimed that it didn’t contain an appropriation, even though money is appropriated by House Bill 868. Second, it claimed that the money came from the general account, when it actually came from the marijuana special revenue account.

Two groups who had fought to maintain the Habitat funding through the marijuana tax revenue issued a press release saying that they were “incredibly disappointed” by the governor’s decision but would continue to fight to overturn it.

Wild Montana and Montana Wildlife Federation said in a joint statement that SB442 was a shining example how democracy should work. Vetoing it would be ignoring the will of more than 130 legislators and numerous counties. It would also ignore the thousands of Montanans and veterans who backed SB442. We’ll continue to work to bring this bill to a successful conclusion. We look forward to working with county commissioners, our agricultural neighbors, and many other people who worked to create a bill which invests in us all.

The future is still uncertain, but there was some discussion in the building about possible legal action. This was despite the consensus among some people that the bill had been killed for good.

On Wednesday morning, the House and Senate leaders will host news conferences and interviews to discuss this session. Several lawmakers have described it as a memorable one in their closing remarks.

Lang is disappointed that the bill he drafted, which has been praised and endorsed by many legislators of both parties as well as local governments, will not become law.

“I’ve been defeated before.” There are worse defeats than this one. “You’ve got go on, and hope that these guys will pick up and go next time,” said he. “I am really disappointed that Montana will not get to work through this procedure.”

The story was originally published by Daily Montanan.

Below is a report on the earlier developments…

Montana lawmakers pass bill to revise marijuana tax revenue allocations but governor has’substantial concerns’

You know the Governor’s Office’s position. They’ve already said it multiple times .”

By Blair Miller of the Daily Montanan

Montana’s fight over marijuana tax revenue could have ended on Monday, despite what one Democratic legislator called “shenanigans”. This was just hours after the Senate had sent the bill to the governor with broad support.

Greg Gianforte is unlikely to support the widely praised a href=”http://laws.leg.mt.gov/legprd/LAW0203W$BSRV.ActionQuery?P_SESS=20231&P_BLTP_BILL_TYP_CD=SB&P_BILL_NO=442&P_BILL_DFT_NO=&P_CHPT_NO=&Z_ACTION=Find& Legislators have stated in recent days that Greg Gianforte will not support Senate bill 442. His office also hinted on Monday.

Kaitlin price, a spokeswoman for the governor in an email sent on Monday afternoon, stated that “the governor has substantial concerns about Senate Bill 442.”

The Senate passed SB442, sponsored Sen. Mike Lang’s (R), 48-1. This is usually the final step for any legislation, but it may have to vote again to override an eventual veto.

SB442 allocates 20 percent of marijuana tax revenues to county road construction and maintenance, 20 percent to the new Habitat Legacy Fund, 12 percent to state parks, trails and facilities, and 5 percent to the HEART Fund. SB442 allocates 20 percent of the marijuana tax revenue to county road construction and maintenance; 20 percent to a new Habitat Legacy fund; 12 percent toward state parks, trails, facilities and nongame accounts; 11 per cent towards the HEART fund; five per cent to veterans and surviving spouses.

If the bill does not reach the governor until after the end of the legislative session next week and if he vetoes it, the lawmakers will be sent polls so they can vote to override Gianforte. The measure would be considered defeated if the voter did not return the ballot. To override a vote, two-thirds of each chamber would need to agree.

Lang, other legislators from both parties and nearly 100 business and organizations across all political and business spectrums, support the Malta Republican’s bill.

At noon on Monday, several of these groups, as well as lawmakers from both sides, held a press conference to urge Gianforte to sign the bill, an hour before it was sent to him by the Senate.

Lang said to the dozens of people gathered in the former Supreme Court Chambers of Capitol that “we have overwhelming support in both this room and in both chambers.” The good thing is that it highlights many Montanans – ranchers, farmers and county commissioners as well as hunters, anglers and hikers. It also features veterans, home healthcare providers, energy workers, and many other people who were instrumental in moving this through the Montana Legislature.

Last-minute changes made to another bill last week included competing language around what was in two bills that were killed by lawmakers in the past two month. This drew the ire of members from both parties who supported Lang’s bill, and opposed continuing to find ways to reallocate revenue to the governor’s priorities or other legislators’ priorities.

Rep. Mike Hopkins, R., who sponsored the 2021 legislation that established the revenue streams for the industry and laid the foundations for it said: “This amendment removes that conversation.”

Rep. Katie Sullivan, a Democrat from Massachusetts, said that the changes made at the last minute left her feeling as if there were “shenanigans” going on. She called the bill and its late amendments a “vehicle for dishonesty.”

She said, “I am very worried that if we send this bill out we will see it come back with policy and revenue options we don’t like.” “Enough of the nonsense; let’s return to serious business,” she said.

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The actions of Monday were planned for about three months.

While House Republicans were pushing to have more marijuana tax revenues go towards the general fund, and the Department of Justice , some of them argued, that citizens had already appropriated money through the I-190 initiative ballot in 2020, despite the fact that the legislature set up the current framework for the 2021 session. Lang’s bill was a new vehicle of compromise between groups who support the Habitat Montana Program, other conservation programs and trails, county roads and the Governor’s HEART Fund.

The Senate Finance and Claims Committee , where Lang is a member, modified his bill in late March to bring it closer to the current position. The bill was unanimously approved by the committee.

On April 4, the Senate passed the bill to the House with a 49-1 majority. The Senate sent the bill to the House in a 49-1 vote on April 4.

The committee approved the bill with a vote of 17-6 after adding an amendment requested from the Department of Fish, Wildlife and Parks. The bill was then supported by 84 House Members on the second reading.

SB442 was then sent to the House Appropriations Committee where several members backed Lang’s theory, that citizens had illegally appropriated money through initiative. Rep. Bill Mercer, R, whose House Bill 66 was a main competitor to Lang’s bill as it aimed at putting all the money into the general fund beginning in 2025.

Fitzpatrick, who has spent 40 years in the Capitol, said that despite the fact that he and his fellow committee member, Rep. John Fitzpatrick, had written amendments to the measure, it was the first time he thought he’d ever seen a bill receive so much public input.

He said, “Constituents at home like the bill just as it is.” “That’s where I am.”

Rep. David Bedey, who was part of the group that backed Mercer’s legislation, told the committee he shared the same opinion as Fitzpatrick. “I think this bill should be moved exactly as is,” he said.

The bill was approved by House Appropriations with a vote of 17-6, and then passed through third reading 82-17 in the House on April 26, paving the way for its arrival at the Governor’s desk. This is due to a friendly amendment in the House as well as the wide support from the Senate.

According to several lawmakers and lobbyists involved in the bill, there was still tension about what would happen to the marijuana revenue. Senate Finance and Claims sat for eight days on Mercer’s bill to take executive action before it finally voted unanimously against the bill on April 26, 2019.

Even that wasn’t the end of the marijuana revenues saga. After Mercer’s bill was introduced, similar language from another bill, Senate Bill 538, “Revise marijuana laws generally,” was proposed by Sen. Chris Friedel.

The original bill did not mention the distribution of marijuana tax revenues. The House Appropriations Committee amended SB538 on the same day that Finance and Claims tabled Mercer’s bill. They added language from Mercer’s bill and a bill by Rep. Marta Bertoglio, which attempted to take money from Habitat Montana and give it to law enforcement and general fund. In late February, hundreds rallied in front of the Capitol to defend the marijuana tax revenue that funds Habitat Montana.

Bob Carter, a Democratic Representative, told the Senate that he no longer recognized SB538 when it reached the Senate floor.

It’s not a bill that was passed by Business and Labor. “I can’t and don’t recommend that you do either,” he said to the body.

A 49-50 vote narrowly defeated the bill on its second read. Hopkins, however, asked for the bill to be reconsidered shortly afterwards, stating that it was a part of the ongoing conversation on marijuana policy and revenue. The House voted to reconsider the bill 50-47.

Lang expressed concern about SB442 and SB538 during a Senate Republicans Caucus meeting last Friday.

You know the Governor’s Office’s position. Fitzpatrick replied, “It’s obvious they’re going veto this bill; they have said that many times.”

He and Ellsworth stated that three bills were needed–House Bills 128, 903 and SB538, each of which made marijuana statute changes in order to support HB701 — to prevent the collapse of the current system and the proliferation marijuana businesses throughout the state.

Ellsworth thought that “we were going to end up at conference committee”, as SB538 and SB442 returned to the Senate.

The Senate passed the amended version SB442 on Saturday with 48-2 votes, setting up a third-reading vote for Monday.

The House considered Monday an amendment to HB538 that would strip away all of the changes made to it by Appropriations, restoring it to its original form as it left the Senate, removing all revenue allocations.

Rep. Tanner Smith, who is opposed to legalized marijuana expansion in Montana, also agreed. He said that no one understood what was happening behind the scenes, and there were “stinky things” being passed through the legislature in its final days, which should end by Friday.

Initially the amendment seemed to be headed for failure, reaching a 48-50 vote briefly before what was described by several legislators as a “computer bug.” A second time the body voted to remove the language regarding revenue streams.

After Hopkins’ brief closing, in which he said that he wasn’t trying to hide what was going on between the two bills, the House voted 38 to 62 to put SB538 back on the table, where it is expected to remain, according to lawmakers and lobbyists. Just over half the House Republican caucus voted for it.

A bill with a broad title, house Bill 229 was passed out of a conference committee on Monday, without any changes, contrary to what some thought would happen. The governor could make changes to the distribution of the $110 million estimated revenue for the next biennium if lawmakers fail to find a bill that fits the competing language. Most legislators want to go home and sine die this week.

Lang thanked the citizens, legislators, and lobbyists who attended the press conference on Monday about the bill for their kind words. He praised the bill’s impact in a wide range of areas across the state.

He said, “This bill is worthy of our Governor’s signature.”

The story was originally published by Daily Montanan.