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Legislative Update
This legislative session, your advocacy team has been working overtime to defend Montana’s tourism economy. Thanks to a strong coalition, strategic lobbying, and outstanding testimony from our members, we successfully defeated several harmful proposals that would have raided bed tax revenues and deregulated short-term rentals. Here’s a detailed look at the key bills, the battles we fought, and the wins we secured for our industry and the communities it supports.
Bed Tax
After amending SB 90 in January in Senate Local Government so that the bill only uses the portion of the bed tax that goes to the general fund for property tax relief, your lobbying team has had to defeat several bills that raid the bed tax for other purposes. These bills included:
HB 887, offered by Rep. Jane Gillette (R-Three Forks), would cap the funding that the Department of Commerce receives for tourism promotion and then index that amount for inflation. The rest of the bed tax would go towards property tax relief, unless SB 90 fails, in which case it would be allocated to counties for road maintenance and other purposes. The bill was heard in House Local Government and was defeated by a vote of 3-14, with Rep. Ed Staffman (D-Bozeman), Rep. Peter Strand (D-Bozeman), and Rep. Kelly Kortum (D-Bozeman) voting in favor.
HB 914, offered by Rep. Scott Rosenzweig (D-Bozeman), would allocate part of the bed tax used for tourism promotion to counties for road maintenance. This bill was heard in the House Taxation Committee and was defeated by a vote of 3-18, with Reps. Paul Fielder (R-Thompson Falls), Sherry Essmann (R-Billings), and Neil Duram (R-Eureka) voting in favor.
HB 916, offered by Rep. Mike Vinton, would redirect the 1% added to the Lodging Sales Tax to build the Heritage Center, which was previously allocated to the Department of Commerce for tourism promotion. This year, the funds would be used for property tax relief. This bill was heard in the House Taxation Committee and was defeated by a vote of 6-15, with Reps. Paul Fielder (R-Thompson Falls), Sherry Essmann (R-Billings), Neil Duram (R-Eureka), Katie Zolnikov (R-Billings), and Larry Brewster (R-Billings) voting yes.
HB 946, offered by Rep. Terry Falk (R-Kalispell), would increase both bed taxes by 1% and use the revenue for property tax relief. That bill was heard in the House Taxation committee and was defeated by a vote of 2-19, with Reps. Neil Duram (R-Eureka) and Katie Zolnikov (R-Billings) voting yes.
Collectively, on these four bills, there were 66 votes against the raids on the bed tax and 14 votes in favor. Special shout-out to Shelli Mann, Chantelle McDuffie, and Larry Lambert for doing an excellent job testifying against these bills.
Short Term Rentals (STRs)
The Short-Term Rental (STR) industry was out in full force this session, trying to pass several bills that would ease regulation and hamper local government regulation of STRs. Thanks to a strong coalition with the League of Cities and Towns, affordable housing advocates, a strong assist from the American Hotel & Lodging Association (AHLA), MLHA Board Members Shelli Mann’s and Chantelle McDuffie’s excellent testimony, and some behind the scenes maneuvering we were able to defeat all bills and amendments seeking to deregulate STRs, including:
SB 336, offered by Sen. Greg Hertz (R-Polson), would define STRs as a residential use of property and limit local government’s ability to ban and regulate STRs. This bill gained momentum with an 11-0 vote in the Senate Local Government committee and a 36-14 vote on both second and third reading in the Senate. Senators found testimony from the parade of Montanans that proponents brought to the hearing, who claimed they couldn’t afford their homes and second homes without being able to offer them as short-term rentals (STRs). On the House side, we focused our efforts on killing the bill in House Local Government. AHLA activated efforts to mobilize grassroots supporters and hired an additional lobbyist to help with our efforts. We were able to defeat the bill by a vote of 6-11, with all Democrats plus Reps. Sherry Essmann (R-Billings), Steve Fitzpatrick (R-Great Falls), Linda Reksten (R-Kalispell), and Curtis Cochran (R-St. Regis).
HB 524, offered by Rep. Caleb Hinkle (R-Belgrade), would remove the definition of boarding and rooming houses from the part of the law that governs state health and safety regulations of lodging facilities. The main proponents of the bill were the Montana Landlords Association, which was very active this session in supporting STR deregulation bills, raising our hackles about this bill. The proponents were unable to communicate effectively the purpose of this bill to the House Business and Labor Committee. That, coupled with opposition from Missoula County, which raised concerns about potential unintended consequences and working the halls, led to a substitute motion to table the bill with a positive vote.
HB 594, offered by Rep. Kerri Seekins-Crowe (R-Billings), would restrict local governments’ ability to require additional licensing and permitting. After seeing in the House that all the supporters of this bill were STR owners, we engaged with the bill on the Senate side. Working with the sponsor and the League of Cities and Towns, we were able to add an amendment to Senate Local Government that would restrict the restrictions to occupational licensing only. But STR supporters tried to strip that amendment out on the Senate floor. Still, we were able to get Sen. Chris Pope (D-Bozeman), an amendment sponsor, and Senate Local Government Chairman Forrest Mandeville (R-Columbus) to oppose it. The amendment failed by a vote of 17-33, and then the body killed the bill on 2nd reading by a vote of 10-40.
HB 802, introduced by Rep. Shannon Maness (R-Dillon), would limit local governments’ ability to regulate and ban short-term rentals (STRs). This bill was introduced late in the session, and in testimony, the League of Cities and Towns urged the Committee to table the bill, as everyone was already working on SB 336. The bill was tabled by a vote of 3-18, with Reps. Courtenay Sprunger (R-Kalispell), Kerri Seekins-Crowe (R-Billings), and Greg Overstreet (R-Stevensville) voting yes.
SB 363, offered by Sen. Daniel Zolnikov (R-Billings), would change the definition of a tourist home. While seemingly innocuous, with all supporters being the same cast of characters supporting every other STR bill, we became concerned about this bill as it made its way through the process. It was tabled in House Local Government by a vote of 12-5, with Reps. Larry Brewster (R-Billings), Courtenay Sprunger (R-of Kalispell), Kerri Seekins-Crowe (R-Billings), Steve Gist (R-Great Falls), and Greg Overstreet (R-Stevensville) voting no.
SB 532, offered by Sen. Forrest Mandeville (R-Columbus), was not a STR bill but a bill about ADUs in county zoning. However, STR supporters tried to introduce an amendment to the bill in House Local Government that would have prevented counties from prohibiting the use of ADUs and STRs. That amendment failed by a vote of 7-10 with Reps. Sherry Essman (R-Billings), Linda Reksten (R-Polson), and Marta Bertoglio (R-Clancy) joined Democrats in voting no.
SB 409, the SB 540 Cleanup Bill
SB 409, offered by Sen. Daniel Zolnikov (R-Billings), a cleanup bill from last session’s SB 540, sailed through the Senate, House Taxation, and second reading on the House floor. We ran into some trouble in House Appropriations, with some amendments. Rep. Jane Gillette (R-Three Forks) brought forward an amendment that required some onerous reporting by the Department of Commerce. Rep. Terry Falk (R-Kalispell) offered an amendment that would have capped the funding going to Commerce for tourism promotion. We were able to defeat both amendments, and then the bills passed out of Committee by a vote of 14-9. It then passed 3rd reading in the Senate by a vote of 93-5. It just needs to go back to the Senate for concurrence on the House amendments, and then it will be sent to the Governor.
Thank You for Standing With Us
Our success this session would not have been possible without the powerful testimony, behind-the-scenes work, and unwavering support of our members and partners. Every hearing, amendment, and vote was a reminder of the critical role you play in protecting Montana’s tourism and hospitality industry. We’ll continue to keep you informed as the session wraps up and look forward to working with you to build on these victories. Thank you for being part of this important work!
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