Senate committee hears bill to re-bucket lodging-tax dollars, sharply expands emergency lodging for trafficking and domestic-violence victims

Senate Finance and Claims on Thursday heard testimony on Senate Bill 409, which would change how Montana’s lodging facility use tax is split among the Department of Commerce, historic preservation, university research and a new recovery fund for victims of domestic violence and human trafficking.

Sen. Daniel Zollnikov, R-Billings, the bill’s sponsor, told the committee he reworked last session’s language because the prior approach created auditing problems and left too little direction for how Commerce should spend the money. “So instead, I put together … and then kinda created buckets, and then created new buckets, and tried to put a little bit of direction in place,” Zollnikov said.

The bill replaces the 2023 scheme that routed a large share of lodging-tax revenue through a 60–63% “commerce purse” that was then internally allocated. Zollnikov said that structure became “an audit nightmare.” Under SB 409 the bill distributes named percentages directly from receipts, clarifying that Commerce may use funds for Montana promotions, Main Street programs, wayfinding and signage, trade-office support, and targeted “real tourism” pilot projects.

Why it matters: The measure redirects millions in lodging-tax revenue. Committee members and Commerce officials said the change shifts funding among well-known programs — marketing and wayfinding, the University of Montana’s Institute for Tourism, Recreation and Research (ITRR), the Montana Heritage Commission and a new recovery-and-lodging program administered through the Department of Justice. Supporters say the change gives Commerce clearer authority to seed rural and tribal tourism and to relieve pressure on law-enforcement and victim-services systems.…