Ochenski: When Your Deal Goes Down 

Freshman lawmakers wage legal challenge to 11-hour energy bill

If two freshman legislators and one of the state’s outstanding Constitutional lawyers are right, the Republicans’ energy deal made in the last minutes of the 2001 legislature may be going down. Should we be surprised? HB 474, sponsored by House Majority Leader Paul Sliter (R-Kalispell), was significantly amended, cobbled back together, and kicked out of a Free Conference Committee in the final hours of the session. As soon as the bill could be printed on the last day of the 90-day legislative session, it was unleashed on baffled legislators, and like the original 1997 deregulation bill all over again, it was stuffed through against stringent opposition on the muscle of the Republican majorities. No one could explain how the bill would work, and there’s a good reason for that: It doesn’t.

Comes now Rep. Michelle Lee, a red-haired ball of energy, newly elected to the Legislature by the good people of Livingston. If the “stuff job” on the energy legislation was painfully apparent to the public and press, it was even more painful for Rep. Lee, who was sitting on the minority side of the House of Representatives. Repub rhetoric lauding the energy deal to the contrary, this young, single mother of two didn’t think a 50% increase in utility bills sounded like a very good deal for either herself or the people she represents. Her objections, and those of many of her fellow legislators, were ignored and the bill was steamrolled through.

Not one to go down without a fight, shortly after the session ended the spunky freshman put together a referendum to repeal the energy bill. Much to her dismay however, Attorney General Mike McGrath’s office ruled that HB 474 could not be put to a vote of the people because it was an appropriation bill and was not properly the subject of a referendum.

“Not so,” said Rep. Lee, and set off to find herself a good lawyer. She found one, too, in Jim Goetz of Bozeman, and together with Lee’s fellow legislator, Rep. Christopher Harris (D-Bozeman), they are going to court to either have HB 474 ruled unconstitutional or reverse the AG’s opinion and put the measure to a vote of the people.

According to Goetz’s complaint, “the act is a hodgepodge of provisions relating to electrical energy” that purport to appropriate up to $100 million from revenue derived from the “Electrical Energy Excess Revenue Tax.” As you may remember, this tax was supposed to be levied on Montana-produced power that was sold out of state. The Republican leadership was sure that the Legislature and governor could use this tax threat to leverage the utilities to negotiate a deal. Only one problem: Right at the end of the session, as part of the last-minute “deal,” SB 512, the bill that would have established the “Electrical Energy Excess Revenue Tax,” was supposed to die. And die it did in a most ignoble fashion. As detailed in the complaint, Rep. Dave Gallik (D-Helena), tried to get the House to take action on the tax bill prior to consideration of the energy bill.

Instead, wielding the power of his majority, Rep. Sliter moved that SB 512 be “passed for the day.” In the arcane terminology of the Legislature, this means that discussion on the bill is postponed to the next day. Sliter’s motion was successful. One more problem: It was the last day of the session, so SB 512 wasn’t just "passed for the day," it was dead. Which means, if Goetz is right, that there is no appropriation because there is no funding mechanism. Further, Goetz and company say even if HB 474 is determined to be an appropriation bill, it would then be unconstitutional because it spends up to $100 million a year that the state doesn’t have—since the legislature killed the tax measure—thus violating the Constitutional requirement for a balanced budget. The bill was bogus and the worst part, according to the complaint, was that the Legislature knew it. “At the time HB 474 was passed, the Montana House of Representatives had full knowledge that the purported statutory appropriation in that measure could not be funded and that it was therefore superfluous and void.”

The complaint sums it up pretty well: “The holding of public office is not a matter of right but a sacred trust and such trust must be exercised for the benefit of the people. The acts of the majority of the members of the House of Representatives of the Montana Legislature on the last day of the 2001 legislative session violated this trust and constitute a breach of fiduciary duty. HB 474 was substantially amended on the last day of the legislative session, through tactics which avoided the regular legislative process, was rushed, and was not adequately considered. The net result of these actions was that the legislative majority was more responsive to the needs of several large utility corporations, than to the needs of the people of Montana.”

No lawsuit is a sure thing, but Goetz regularly appears before the Supreme Court and has a long record of winning. If the two freshman legislators and their highly-regarded barrister are right this time, the 2001 legislature’s premier piece of energy legislation may go down. Considering the spurious fashion in which it was crafted and passed, that would be nothing but poetic justice. The larger lesson, however, is that it is simply bad public policy to jam through massive, last-minute legislation without the opportunity for public scrutiny and appropriate legislative hearings and debate. Given the way the dereg bill was done in 1997—and the disastrous results now assailing the state—you would think this is a lesson our so-called political leaders would have learned by now.

When not lobbying the Montana Legislature, George Ochenski rattles the cage of the political establishment as a political analyst for the Missoula Independent.

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