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2025 Legislative Session Update - End of Session

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!


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. 
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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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