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2025 Legislative Session Update - February

February Update 
As the Montana Legislature moves deeper into the session, your MLHA team remains fully engaged in monitoring and advocating for policies that impact our industry. The political landscape in the Senate has become increasingly complex, with internal conflicts slowing the progress of key legislation. Despite this, we continue to track important bills, defend the integrity of the bed tax, and collaborate with industry partners to protect Montana’s lodging and tourism sector. 
SB 90 – Property Tax Relief & Bed Tax Threats 
SB 90 was heard on the floor of the Senate for second reading on Wednesday, February 26. As originally written, SB 90 raided all bed tax funds to pay for property tax relief. Your lobbying team was successful in getting this bill amended in Committee with a unanimous vote to only utilize the portion of the bed tax that goes to the general fund – leaving the tourism promotion funding intact. Leadership spent several weeks whipping the votes for this bill while we watched for potential amendments that would revert it to its original form. The only amendment on the floor was to reduce the threshold for claiming the property tax relief by reducing it to homes valued at $1 million or less. That amendment passed by a vote of 45-5, and then the bill passed 50-0 with some discussion clarifying that in its current form, it only affects the portion of the bed tax that feeds the general fund. The bill was heard in Senate Finance and Claims on Thursday, February 27, where the sponsor and the Montana Taxpayer's Association suggested other sources of revenue (including the lottery and/or insurance premium tax) to increase the overall tax relief. We will continue to monitor it for amendments that may affect tourism promotion funding. MLHA remains committed to protecting the bed tax from reallocation and is coordinating with the Travel Association to engage with Legislators as discussions evolve and votes are taken. 

SB 409 – SB 540 Clean Up Bill 
Your lobbying team has been working hard behind the scenes on legislation to update/clean up SB 540 from last session. As you know, that bill changed how Montana funds tourism promotion to disseminate tourists to all of Montana and help mitigate the impacts of tourism on busier areas. The Department of Commerce needed a cleanup bill to make some structural changes to ensure it was clear how the funding was flowing to several buckets of grant programs. However, early drafts of the bill included a 30% across-the-board cut to the tourism promotion funding and removing the statutory appropriation, which would force tourism advocates to fight for our funding every legislative session through the HB 2 budget. Your lobbying team negotiated changes to the bill and removed those two provisions. We will need to watch this bill closely for any amendments and attempts to divert the portion of the bed tax that funds tourism promotion.  

SB 336 – Short-Term Rental Regulation 
Senator Greg Hertz’s SB 336, which would classify short-term rentals as residential and preempt local government regulation, was heard on Tuesday, February 25. MLHA opposed the bill alongside a broad coalition, including the American Hotel & Lodging Association and Montana’s League of Cities and Towns. We are actively working with partners to amend or defeat the bill to ensure fair regulation and taxation. 

Immigration & Business Regulations 
Three immigration-related bills are moving through the session. The business community has rallied behind HB 226 from Rep. Courtney Srunger, which doesn’t include additional mandates on businesses and allows employers to use either I-9 paperwork (already required under federal law) or e-verify. The bill also gives the Department of Labor enforcement and inspection authority 72 hours’ notice. That bill has passed the House and is awaiting a hearing in the Senate.  

Two other bills that go much further are also moving through the process. HB 536 was brought by Rep. Lucas Shubert, and SB 329 by Sen. Forrest Mandeville. Both bills mandate e-verify, give the Department of Justice enforcement authority, and impose hefty fines. HB 536 goes even further and includes a private right of action for businesses to sue each other over violations and provisions that business can lose their business license and individuals can lose hunting, driver, and other licenses. These two bills have not passed out of Committee but need to be transmitted to the other body before the transmittal deadline on March 7.  
MLHA’s Ongoing Legislative Engagement 
With Senate procedural delays and heated political dynamics, the legislative process is unpredictable. However, MLHA remains proactive, ensuring that lodging and tourism voices are heard. We continue to push for fair regulations, defend critical funding sources, and advocate for policies that sustain a thriving tourism economy.

Stay tuned for updates and be ready to engage when action is needed. Your involvement makes a difference in protecting Montana’s hospitality industry!

January Update
The 69th session of the Montana Legislature officially began on January 6, 2025, and your MLHA lobbying team is already hard at work identifying potential threats and opportunities for the lodging and tourism industry. On January 13, 2025, we proudly joined industry partners at "Travel Industry Rotunda Day," where members of our board of directors engaged directly with legislators to discuss the importance of tourism in Montana and our shared concerns over a proposal to redirect bed tax dollars.
 
SB 90, introduced in the 2025 Montana Legislature, seeks to reallocate critical funding generated by the lodging sales tax and facility use tax, commonly known as the “bed tax.” These taxes, collected by Montana’s lodging industry, are vital to supporting essential programs that benefit every corner of our state. They fund the general fund, local tourism infrastructure, historic preservation grants, public safety enhancements, and initiatives that promote tourism in rural areas.
 
Past legislative compromises have successfully allocated bed tax dollars to meaningful projects. Under SB 338 (2019), funding was directed toward constructing the Montana Heritage Center and supporting historic preservation through competitive grants, helping protect Montana’s unique history. SB 540 (2023) increased funding for local communities, enabling public safety improvements and emergency services, with $1.4 million already awarded to 26 safety agencies statewide. These carefully crafted policies reflect the collaborative approach that has made Montana’s tourism economy thrive.
 
Tourism remains a cornerstone of Montana’s economy, attracting 12.5 million visitors annually who contribute $5.45 billion to the state economy and generate $414 million in state and local taxes. This offsets the tax burden for Montana households by an average of $930 annually while supporting over 66,000 jobs—1 in every 12 Montanans. SB 90 threatens to disrupt this successful framework, jeopardizing the economic and community benefits that tourism provides.
 
MLHA is committed to opposing SB 90 to protect this vital funding mechanism and ensure Montana remains a world-class destination. We will keep you informed through Legislative action alerts as opportunities arise to engage on this critical issue.
 
Be ready to testify, send letters, and talk to your legislators about why preserving the bed tax framework is essential for Montana’s economy, communities, and heritage. Together, we can make our voices heard and safeguard the future of Montana’s tourism industry

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