Senate bill would recategorize lodging‑tax buckets, add 2.5% for emergency lodging and recovery for victims

Sen. Daniel Zolnikoff (Billings) opened Senate Bill 409 by describing a rewrite of lodging/use‑tax distributions that, he said, replaces a vague single line in statute with explicit spending “buckets” and reduces an auditing problem created by last session’s language.

"We got rid of that 63% and did the adjustment of the percentages," Zolnikoff said, explaining the bill moves the allocation point to receipt and enumerates shares for tourism marketing, heritage preservation, state parks and other programs. Under the proposal, 24.5% would go to the Department of Commerce for tourism media and advertising; other buckets include agritourism, rural/under‑visited area pilot projects, heritage preservation and a 2.5% set‑aside for emergency lodging and recovery for victims of domestic violence and human trafficking.

Mandy Rambo, deputy director and acting director of the Montana Department of Commerce, told the committee the agency supports SB 409 and its fiscal note. "The department of commerce supports this bill and would ask for a do pass," she said, adding that the change is a modest overall reduction for Commerce but a roughly $500,000 increase to the Montana Heritage Commission’s biennial funding under the bill.

Industry and victim‑services groups also testified in favor. Chris Averill of the Montana Lodging and Hospitality Association said the bill helps direct tourism dollars toward under‑visited communities and supports historic‑preservation projects; he cited statewide tourism spending and job figures in support of the policy. Kelsen Young of the Montana Coalition Against Domestic and (redacted) Violence and Stephanie Baucus, co‑chair of a human‑trafficking task force, said the expanded lodging/recovery pool would assist short‑term shelter and recovery for victims and complements the emergency lodging fund already administered through DOJ.

Committee members focused questioning on where specific dollars would be shifted. Commerce and bill staff pointed to the fiscal note and HJ 12 as the baseline for calculations: Commerce staff said HJ 12 estimates $64,144,000 will be the base amount sent for distribution in the next fiscal year. Acting director Rambo and staff said an approximately $890,000 reduction in one Commerce line would be realized by trimming wayfinding/signage and tourism marketing line items and by capturing cost savings through a more targeted, in‑state marketing vendor; they emphasized popular programs such as the Made in Montana and Main Street efforts would not be cut.

Shauna Lyons, Director of Budget and Planning for the Office of Commissioner of Higher Education, said the Institute for Tourism and Recreation Research (ITRR) would see about a $300,000 reduction in funding and would be required to prioritize which projects to continue. Zolnikoff and other supporters said the bill is intended to seed projects across rural and tribal Montana and to remove statutory duplication and runaway percentage growth that can outpace actual need.

No vote was taken on SB 409 at this hearing; the committee asked Commerce to produce a clear bucket‑by‑bucket chart and scheduled executive action for the following day.

What’s next: The Senate Finance and Claims committee will receive a Commerce‑prepared allocation chart before executive action on SB 409; committee members indicated they will press for technical clarifications and potential drafting tweaks prior to any final recommendation.