By Darrell Ehrlick, Daily Montanan
A bill being considered by the Montana Senate would upend the finances of nonprofit groups that bring a lawsuit against the state for violations of environmental and natural resources law.
Senate Bill 524, sponsored by Sen. Greg Hertz, R-Polson, would subject any nonprofit group to paying Montana business tax — equivalent to 6.75% — on any cost associated with litigation against the state for a host of natural resources and environmental law. The legislation would also turn state taxation on its head by taxing an expense or expenditure instead of income.
At a hearing last week, Hertz defended the measure, saying that nonprofits don’t have litigation as part of their missions, and nothing in the law stops them from filing suit.
“These 501(c)3 groups are disrupting our lifestyles and economy, and they want to make changes to our way of life in Montana,” Hertz said in committee. “If the IRS would be doing its job like it should be doing, we have a number of nonprofits and 501(c)3s that are operating outside of their scope and mission.”
The bill is narrowly tailored to only nonprofit groups that sue under certain areas or title of Montana law. The legislation would not change a nonprofit status, although Hertz said that was an option he could have contemplated. The bill passed second reading in Senate, 34-16, on Monday.