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Montana Lawmakers Consider Regulatory Takings Bill

Sen. Steve Fitzpatrick (R) - SD 10
Montana Legislature
Sen. Steve Fitzpatrick (R) - SD 10

A bill moving through the Montana Legislature would allow property owners to claim compensation from the state if they incur losses due to state regulations. Supporters say businesses deserve the reimbursement, while opponents say it’ll leave a massive hole in the state’s budget.

Senate Bill 260 would require the state to compensate property owners who see a 25% decline or more in property value in relation to state regulations or rules. It would also broaden the definition of property. 

The policy has already been endorsed by the Senate and was heard in the House Business and Labor Committee Tuesday. 

Sen. Steve Fitzpatrick, a Republican from Great Falls, is the bill’s sponsor and said the COVID-19 pandemic highlighted why the policy is needed. 

"Orders came in, they destroyed peoples' businesses, they put people out of work and there's nothing you can do about it. So what this bill does is it restores a little bit of balance so that you are not losing your business, or friends and neighbors aren’t being run out of business by government regulation."

A similar bill passed the state Senate in 2009 and later died on a tie vote in the House. 

The Governor's budget office released two notes to try to analyze how much the bill will cost the state, but neither could give it a price tag, saying there are too many variables to calculate.

Representatives of industry and business ardently support the bill, saying they need further protection from government regulation and deserve the compensation. 

Opponents like the Montana League of Cities and Towns, Montana Environmental Information Center and the Montana Wildlife Federation say the bill could discourage the state from enforcing regulations, like those that protect the environment or public health. 

Kate McMahon, a former land use planner from Whitefish, testified that the bill’s language is too vague.

"This bill does not specify that the diminution in value should be uniquely and specifically attributable to the actual regulation."

McMahon said she worries that’ll lead to the state making payments on unfounded claims and delays in city development.

The Senate endorsed the bill on a party-line vote. The House Business and Labor Committee has not yet taken action on it.

CORRECTION: The original broadcast of this story incorrectly stated the Legislative Fiscal Division releases fiscal notes. The story has been corrected to say the Governor's budget office releases fiscal notes. 

Copyright 2021 Montana Public Radio. To see more, visitMontana Public Radio.

Shaylee is a UM Journalism School student. She reports and helps produce Montana Evening News on MTPR.