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Full text of "Voter information pamphlet"

MONTANA 
STATE 




This "cover" page added by the Internet Archive for formatting purposes 



324.786 

S2v 

1986 



1986 Vd 



^.i^OWM 



amphlet 



Introduction 



On November 4, you will have the opportunity to vote on seven state ballot issues along with the 
federal, state and local offices which will appear on your general election ballot. This pamphlet con- 
tains information about each of the ballot issues. It is being sent to you, and all other registered 
voters of Montana, as required by law. It is printed to assist you in making informed decisions on 
these very important ballot questions. 

The first section contains just the basic information on each issue — including: the official ballot 
titles and explanatory statements for each issue as prepared by the Legislature and Attorney Gen- 
eral; "How the issue will appear on the Ballot"; and the arguments "for" and "against" each issue as 
prepared by duly appointed committees of proponents and opponents. Then, the complete text of 
each measure is printed separately toward the end of the pamphlet. 

As Secretary of State of the State of Montana, I certify that the text of each proposed issue, ballot 
title, explanatory statement, statement for and against, and the rebuttal statement which appears in 
this pamphlet is a true and correct copy of the original document filed in my office. 



STATE DOCUMENTS COUECTIONI 

OCT 7 - 1986 

MONTANA STATE LIBRARIfl 

1515 E. 6th AVE. 
HELENA, MONTANA 59620 




U/^L^&*w.<^^r^ 



Jim Waltermire 
Secretary of State 




TABLE OF CONTENTS 

CONSTITUTIONAL AMENDMENTS Arguments 

No. 15 2,3 

No. 16 4, 5 

CONSTITUTIONAL INITIATIVES 

No. 27 6, 7 

No. 30 8, 9 

LEGISLATIVE REFERENDUM 

No. 100 10, 11 

INITIATIVES 

No. 104 12, 13 

No. 105 14, 15 



Text 

16 
16 

16 
16 

17-20 



20-23 

23 




CONSTITUTIONAL 
AMENDMENT NO. 15 



AN AMENDMENT 

TO THE CONSTITUTION 

PROPOSED BY THE LEGISLATURE 



OFFICIAL BALLOT TITLE 

vJ ACT TO SUBMIT TO THE QUALIFIED ELECTORS OF MON- 
i/\NA AN AMENDMENT TO ARTICLE 11, SECTION 14, OF THE 
MONTANA CONSTITUTION TO PROVIDE THAT THE PEOPLE OR 
THE LEGISLATURE MAY ESTABLISH THE LEGAL AGE FOR PUR- 
CHASING. CONSUMING. OR POSSESSING ALCOHOLIC BEVER- 
AGES: AND PROVIDING AN EFFECTIVE DATE. 



Attorney General's Explanatory Statement 

The Legislature submitted this proposal for a vote. It would amend the 
Montana Constitution to remove the legal drinking age of 19 years from 
the Constitution and allow the legal drinking age to be established by stat- 
ute or initiative. Currently the Constitution requires that the minimum age 
for consuming or possessing alcoholic beverages may not be more than 19 
years. This proposal would not only remove the reference to 19 years of 
age, but would also establish that the legal age pertains to the purchase, as 
well as the consumption or possession of alcoholic beverages. 



Argument For 
Constitutional Amendment No. 



15 



At the present time. Article II, Section 14 of the Constitu- 
tion establishes the legal drinking age in Montana at 1 9 years. 
This constitutional amendment would remove the age limit 
from the Constitution, and allow the legal age to be set by the 
legislature or by the voters of Montana through an initiative. 

This amendment is necessary so that the legislature can re- 
spond to a statute passed by the United States Congress. This 
statute requires all states to have a law prohibiting the pur- 
chase or public possession of alcoholic beverages by persons 
under 2 1 years of age. Any state that does not enact such a law 
will lose 5% of its federal aid highway funds in the fiscal year 
1 987 and 10% each fiscal year thereafter. Failure to pass this 
amendment would result in the loss of up to $ 1 million per 
year of federal-aid highway funds. Montana's highway pro- 
gram cannot afford to lose these funds. 

There are additional reasons as to why the legislature 
should be allowed to examine the drinking age issue. The cur- 
rent 1 9 year drinking age is creating problems for educational 
institutions in the state of Montana. High schools throughout 
the stale have encountered problems involving the availabil- 
ity of alcohol to their students. Not only do some 1 9 year olds 
attend high schools, graduated 19 year olds are often part of 
the peer group of younger high school students. While raising 
the drinking age to 2 1 years will not eliminate all these types 
of problems, it will make alcohol less available to high school 
age students. 

An increased drinking age should also reduce the number 
ofaulomobile accidents involving Montana youngsters. Cur- 
rently, a significant percentage of the fatal accidents involv- 
ing teenagers in Montana involve alcohol. 

The passage of this Amendment will not automatically 
change the drinking age. It will, however, allow the legislature 
to examine the issues and determine whether the 2 1 year old 
limit is appropriate. 

Passage of Constitutional Amendment 1 5 is not only in the 
best interest of the youth of Montana, it makes good fiscal 
sense. 



This Argument Prepared by: Senator Les Hirsch, Miles 
City : Representative Gary Spaeth, Joliet; and Karen Doolen, 
Billings. 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 
CONSTITUTIONAL AMENDMENT NO. 15 



D 
D 



FOR removing the legal drinking age of 1 9 years from the constitution and allow- 
ing the legal drinking age to be established by statute or initiative. 

AGAINST removing the legal drinking age of 19 years from the constitution and 
allowing the legal drinking age to be established by statute or initiative. 



NOTE: The ballot title was written by the Legislature and the explanatory statement by the Attorney 
General as required by state law. The complete text of Constitutional Amendment No. 1 5 appears on 
page 16. 



Argument Against 
Constitutional Amendment No. 15 

Committee to write the argument against Constitutional 
Amendment No. 1 5 failed to tile a statement by the statutory 
deadline. 



Rebuttal of Argument For 
Constitutional Amendment 15 

The federal government takes money from us but won't 
give it back (as highway funds) unless we follow a law Con- 
gress could not otherwise force us to follow. This is poor pub- 
lic and constitutional policy and an improper ordering of 
federal-state relations. If you vote for this amendment you 
will be giving the Legislature the power to give in to federal 
blackmail and raise the drinking age to 2 1 . 

It might make sense to raise the drinking age to 21 if per- 
sons under 2 1 had a higher alcohol-related motor vehicle ac- 
cident rate. They don't. In Montana, drivers under 2 1 have a 
lower alcohol-related accident rate than older drivers. Of 
75,000 Montana drivers under 21 in 1985, only 334 had a 
motor vehicle accident involving alcohol use, and they were 
not always found at fault. Because of the actions of 334, we 
would penalize almost 75,000 people. These facts are con- 
tained in studies done by the Montana Highway Patrol and 
the National Highway Traffic Safety Admininstration. 

Further, when the drinking age went from 18 to 19 in Mon- 
tana, fatal alcohol-related nighttime accidents involving per- 
sons 1 8 or younger actually increased. This may indicate that 
raising the drinking age to 21 will "get them out of the bars 
and into the cars". 

If you're old enough to fight and die for your country, 
you're old enough to enjoy a beer if you wish. 

Where is the evidence that raising the drinking age will 
limit the availability of alcoholic beverages to our youths? 



This .Argument Prepared by: Senator George McCallum, 
Plains; Representative Dave Brown, Butte; Senator J. D. 
Lynch, Butte. 




CONSTITUTIONAL 
AMENDMENT NO. 16 



AN AMENDMENT 
TO THE CONSTITUTION ' 
PROPOSED BY THE LEGISLATURE 



OFFICIAL BALLOT TITLE 

AN ACT TO SUBMIT TO THE QUALIFIED ELECTORS OF MON- 
TANA AN AMENDMENT TO THE MONTANA CONSTITUTION TO 
REPEAL ARTICLE XIII, SECTION 3, THEREOF. WHICH REQUIRES 
THE LEGISLATURE TO CREATE A SALARY COMMISSION TO 
RECOMMEND COMPENSATION FOR THE JUDICIARY AND 
ELECTED MEMBERS OF THE LEGISLATIVE AND EXECUTIVE 
BRANCHES. 



Attorney General's Explanatory Statement 

The Legislature submitted tiiis proposal for a vote. It would amend the 
Montana Constitution to abolish the Montana salar>' commission. Cur- 
rently the Constitution requires the Legislature to create a salary commis- 
sion to recommend compensation for members of the judiciary, members 
of the Legislature, and elected members of the executive branch of state 
government. 



Argument For 
Constitutional Amendment No. 16 

Approval of this amendment would strike from the Con- 
stitution the requirement for a Salary Commission, which 
has proved totally ineffective in recommending compensa- 
tion for elected state officials. The legislature must enact all 
changes in salaries, and it has consistently ignored all recom- 
mendations of the Salary Commission by approvmg of sala- 
ries substantially lower than recommended. If this amend- 
ment is approved, the statutory repeal of the Salary 
Commission law, enacted by the 1985 Legislature with a de- 
layed effective date, will become effective July 1 , 1 987. when 
the authorization for the establishment and functionmg of 
the Salary Commission will expire. 



Rebuttal of Argument Against 
Constitutional Amendment No. 16 

The opponents argue that without the Montana Salary 
Commission there would be no objective analysis of the sal- 
ary schedules appropriate for elected officials in Montana, 
nor would there be an opportunity for citizen review. This is 
simply not the case. 

If the Salary Commission was abolished, the legislature 
would adopt salary schedules only after recommendations 
for salary changes had been subjected to the full hearing proc- 
ess required in House and Senate rules. Citizens would have 
ample opportunity to express their concerns and opinions 
and the media would play a critical role in disseminating pro- 
posed salary changes to the public for their review. 

Continuation of the independent salary commission is a 
duplication of effort and an unnecessary waste of taxpayer 
dollars. The Montana Salary Commission was a good idea at 
the lime it was proposed and adopted, but the fact remains 
that it simply has not been an effective means of providing 
the legislature with necessary salary recommendations for 
elected officials. 



These Arguments Prepared by: Senator Mike Halligan, 
Missoula: Representative Bob Marks, Clancy; and Dave 
Byerly, Lewistown. 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 
CONSTITUTIONAL AMENDMENT NO. 16 



I I FOR abolishing the Montana salary commission 
I I AGAINST abolishing the Montana salary 



commission. 



NOTE: The ballot title was written by the Legislature and the explanatory statement by the Attorney 
General as required by state law. The complete text of Constitutional Amendment No. 16 appears on 
page 16. 



Argument Against 
Constitutional Amendment No. 16 

The Montana Salary Commission was created by the peo- 
ple of Montana when they adopted the 1972 Constitution. 
The Commission was intended to be an independent, objec- 
tive group of citizens who could recommend fair and reason- 
able compensation for legislators and other elected state offi- 
cials. It was designed to be free of political or personal 
considerations in recommending salaries appropriate for the 
education, experience, and effort required for each office. 

The Salary Commission is an 8-member, bipartisan board 
appointed by the Governor, the state supreme court, and the 
majority and minority leaders of the house and senate. It 
meets twice each biennium. 

While the legislature has not closely followed the Commis- 
sion's recommendations, there are several important reasons 
a functioning Salary Commission should be maintained. 

First, citizens should continue to be involved in establish- 
ing salaries for elected officials. If there were no Salary Com- 
mission, the legislature would have to set its own salaries 
without an objective, impartial review to ensure that com- 
pensation is neither unreasonably high nor unreasonably 
low. 

Second, our Salary Commission reviews the whole area of 
adequate compensation, so that Montanans will continue to 
have a legislature with broad citizen representation rather 
than one that includes only people of independent means. 

Past history has shown that legislators generally are reluc- 
tant to appropriate adequate compensation for themselves. 
Inadequate compensation has eliminated some potential 
candidates who lacked sufficient financial resources to sus- 
tain them during a term of office. Incumbent legislators also 
experience financial hardship, and as a result many compe- 
tent, experienced legislators have decided not to seek re- 
election. The Salary Commission was created to study this 
problem and recommend compensation that will not prevent 
people from running for public office. 

Third, the Commission provides legislators with informa- 
tion on salary levels in other states similarly situated and on 
salaries paid in the private sector for similiar work and re- 
sponsibilities. This infgrmation is needed for responsible de- 
cision making. 

Proponents of abolishing the Salary Commission argue 
that it is ineffective, because its recommendations have 
largely been ignored. The Commission was created as an ad- 
visory body only. The legislature receives recommendations 
from many advisory groups and seldom accepts all of their 
recommendations. 



Recent legislatures have been conservative in making ap- 
propriations for all sectors of government, so it is not surpris- 
ing that they have been reluctant to increase their own sala- 
ries and those of other elected officials. It is important, 
however, that the legislature continue to receive objective, 
unbiased information and recommendations from an inde- 
pendent commission of responsible citizens. Only with this 
kind of assistance can the legislature establish appropriate 
levels of compensation for elected officials. 



Rebuttal of Argument For 
Constitutional Amendment No. 16 

Even though the legislature has not enacted the salary lev- 
els recommended by the Salary Commission in the past, it 
should have the benefit of the Commission's recommenda- 
tions in the future. The Commission represents a citizen's 
view of fair and reasonable compensation, based on objec- 
tive research. 

The Commission developed its recommendations to the 
1985 Legislature at a cost of $1,800 for the 1983-84 bien- 
nium. This is a small price to pay for a safeguard against 
abuse of the legislature's power to establish salaries for them- 
selves and other elected officials. 



These Arguments Prepared by: Senator Dorothy Eck, Bo- 
zeman; Representative Joan Miles, Helena; and Mae Nan El- 
lingson, Missoula. 




CONSTITUTIONAL 
INITIATIVE NO. 27 



AN AMENDMENT 

TO THE CONSTITUTION 

PROPOSED BY INITIATIVE PETITION 



OFFICIAL BALLOT TITLE 

AND 

Attorney General's Explanatory Statement 

THIS INITIATIVE WOULD AMEND THE MONTANA CON- 
STITUTION TO ABOLISH TAXES ON REAL AND PERSONAL 
PROPERTY. THE INITIATIVE WOULD ALSO AMEND THE 
CONSTITUTION TO REQUIRE THAT A SALES TAX COULD 
NOT BE IMPOSED WITHOUT VOTER APPROVAL, EITHER 
BY INITIATIVE OR REFERENDUM. ANY INCREASE IN A 
SALES TAX OR PERSONAL INCOME TAX WOULD ALSO RE- 
QUIRE VOTER APPROVAL. 



Argument For 
Constitutional Initiative No. 27 

Your vote for CI-27 is a vote for a desperately needed 20% 
reduction in government spending. 

Our state and local governments took in and spent more 
than Five Billion Dollars in the 1984-85 biennium. That 
amounted to $294 in revenue for each $1,000 of personal in- 
come we earned in 1 984 — a 43% higher rate than the $206 
average in the 48 contiguous states! 

Eliminating property taxes will still leave government 
treasuries with $237 per $ 1 ,000 of our income — 1 5% more 
than average, even more than in California and Massachu- 
setts after Propositions 1 3 and Vh. There will still be plenty 
of revenue to provide essential services. Officials who cannot 
provide those services with a 1 5% higher-than-average rate of 
revenue should step aside for those who can. 

Property taxes are unfair, complicated, and expensive to 
collect. They arc unrelated to income or ability to pay, espe- 
cially for homeowners on fixed incomes. When we are pre- 
vented by illness, old age, or unemployment from paying the 
tax bill we can be "evicted" from our own homes. 

CI-27 will make it possible for us to truly own our homes 
and other property. It will allow us to remodel and improve 
our homes without being penalized with a higher tax bill. 
Landlords will similarly have greater incentive to keep apart- 
ment houses in good repair for renters, and less reason to 
raise rents. Our homes will become more valuable because 
buyers will be willing to pay more for a house that is not en- 
cumbered with property taxes. Money presently used to pay 
property taxes can be used to repay mortgages and other 
debts. 

California and Massachusetts have prospered since 
sharply cutting property taxes. Massachusetts went from the 
third slowest to third fastest-growing economy in the nation. 
The number of jobs in both states mcreased in 1980-84 by 
more than 7% — a much faster rate than in either Montana 
or the rest of the nation. 

Montana will also prosper by eliminating property taxes. 
There will be greater incentive for businesses and industries 
to stay in Montana and expand and for new ones to move 
here, truly "Buildmg Montana." Our near-bankrupt agricul- 
tural industr> will receive desperately needed financial relief 

All this and more can be accomplished without sacrificing 
essential ser\ices. Schools, police and fire protection, and 
other important services that rely heavily on property taxes 
can be aided by state rcvenue-sharmg and the savings from 
cutting nonessentials at all levels, as in California and Massa- 
chusetts. 



While Montana's economy has been stagnating and house- 
holds and businesses alike have had difficulty making ends 
meet, state and local governments have continued to grow 
and spend. It's time for some serious budget-trimming and a 
reordering of priorities. This will be done only if we, the peo- 
ple, demand it by passing CI-27. 

We do nol need a sales tax. We do nol need increases in 
income taxes or other taxes. We do need a 20% reduction in 
government excess and waste. 

Vote FOR Constitutional Initiative 27. 



Rebuttal of Argument Against 
Constitutional Initiative 27 

The claim by the opponents that CI-27 would stop "one- 
half of present services" is totally absurd. They correctly note 
that property taxes make up nearly half of general laA reve- 
nue. But they neglect to mention that general lax revenue ac- 
counts for less than half (42%) of Mai government revenue. 
Revenue sources they overlook include user fees, interest in- 
come, utility taxes, liquor store profits, rent and royalty pay- 
ments, federal funds, etc. These additional revenue sources 
amounted to $ 1 .4 Billion in 1 984 — 58% of total government 
revenue! 

By comparison, property taxes accounted for less than 
20% of government revenue in 1984. Therefore, abolishing 
property taxes will cause less than a one-fifth reduction in 
govern rnent revenue, a far cry from the one-half claimed by 
the opponents. 

The threat of drastic cuts for schools and local govern- 
ments is just as ridiculous. Essential services can operate 
more efficiently, nonessential services can be reduced or 
eliminated, and the state can increase revenue sharing to 
schools and local governments. 

It's also unreasonable to expect that Montana bonds, 
backed by leaner, more efficient governments, will be less 
saleable. Government bond ratings in California and Massa- 
chusetts are as good today as they were before voters in those 
states enacted Propositions 1 3 and 2 '/j. And Prop. 1 3 slashed 
California's revenue by. 30%! 

Montana will still be a big-government state after the vot- 
ers approve CI-27. But our officials will at least begin to face 
the same budget constraints that we taxpayers have had to in 
these difficult times. 



These Arguments Prepared by: Naomi Powell, Corvallis; 
Carol Bancroft, Corvallis; and Grant Bierer, Hamilton. 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 

CONSTITUTIONAL INITIATIVE NO. 27 

FISCAL NOTE 

THE TAXES AFFECTED BY THE PROPOSED INITIATIVE ARE PROPERTY TAXES ON 
REAL AND PERSONAL PROPERTY. THE 1 988-89 BIENNIUM DECREASE IN STATE AND 
LOCAL REVENUES WOULD BE A MINIMUM OF $ L3 BILLION. 



D 

D 



FOR amending the Montana Constitution to abolish property taxes and to require voter ap- 
proval before imposing a sales tax or increasing sales or income taxes. 

AGAINST amending the Montana Constitution to abolish property taxes and to require 
voter approval before imposing a sales tax or increasing sales or income taxes. 



NOTE: The ballot title and explanatory statement was written by the Attorney General as required by state law. The 
complete text of Constitutional Initiative No. 27 appears on page 16. 



Argument Against 
Constitutional Initiative No. 27 

If this initiative were adopted, Montana would suffer its great- 
est revenue shortfall in history, and public services provided by 
state, county, city and school agencies would be severely cur- 
tailed. Its negative impact would be felt in every school building, 
pohce and fire station, sheriffs office, judge's chambers, and pub- 
lic health department. We urge a vote AGAINST this irresponsi- 
ble measure. 

The property tax is Montana's main revenue source. It ac- 
counts for nearly one-half of all taxes collected, a total for the state 
of $572,000,000.00 in 1985. Only one-fourth of the property tax 
burden is carried by residential property owners, and nearly one- 
half is collected from utilities or extractive industries. Revenues 
from property taxes in 1983 were distributed as follows: 

Schools - 57% 

State - 3% 

Counties - 22% 

Cities, S.I.D.'s -12% 

Special Districts - 6% 

To replace revenue lost from abolishing property taxes would 
require a sales tax estimated at 1 3 or 1 4 percent, or an increase of 
320 percent in income tax rates. If adopted, the proposed initia- 
tive would not allow the legislature to enact either tax without a 
voter referendum. The initiative would end property taxation 
July 1, 1987, and, without a replacement tax, would create an 
enormous revenue void of uncertain duration. The legislature, 
without its constitutional authority over taxation, would be pow- 
erless to fund services, and representative government would be 
placed in jeopardy. 

The impact of the initiative on schools, which receive 60 per- 
cent of their funds from property taxes, and upon counties, which 
derive 73 percent of tax funds and nearly one-half of all funds 
from property taxes, would be disastrous. Cities would lose about 
50 percent of their general fund budget source. Public safety, pub- 
lic health, and street and road maintenance would suffer deep 
cuts. At least one-half of school and county employees would be 
terminated. Without taxing authority, cities and schools could no 
longer discharge their local responsibilities. Grass roots democ- 
racy would wither. 

The state would lose the six-mill levy, an important component 
of university system funding, and predator control and agricul- 
tural promotional programs would be eliminated. Since late July, 
investors have been unwilling to buy Montana bonds. Uncer- 
tainty about Constitutional Initiative 27 has caused national 
bond rating agencies to withhold ratings on Montana bonds. 

Montana's tax system must be reformed. But Constitutional 
Initiative 27 is not the answer. Responsible reform requires re- 
search, study, and debate, all missmg in this initiative's prepara- 
tion. We want reform, not chaos, and restructure, not collapse. 



Before marking the ballot, each voter must ask: "Which one- 
half of present services do I want stopped?" or "Do I prefer a 1 3 
percent sales tax or a 320 percent income tax increase?" and " Do I 
want to live in a state that cannot sell its bonds?" 

No state has ever adopted anything like Constitutional Initia- 
tive 27. Each of the fifty states levies property taxes. Adopting this 
initiative would place an insurmountable obstacle on the ability 
of schools and local governments to function. Vote for yourself, 
your family, your state! Vote AGAINST Constitutional Initiative 
27. 



Rebuttal of Argument For 
Constitutional Initiative No. 27 

Proponents have substituted myth for reality. Six of their 
myths are listed here. 

1 . $5 billion revenue mvth. This figure is inflated by including 
proprietary funds, federal funds that must be matched, funds that 
cannot be diverted (e.g., highway), and earmarked state, local, 
and school funds. No unit of government can shift these moneys. 

2. Unfairness of property tax myth. The national average 
property tax rate was 1.23 percent of full market value in 1984 
compared to 1.14 percent in Montana. One-half of total taxable 
value of property in Montana is assessed against utilities or ex- 
tractive industry. Residential taxpayers bear one-fourth of the 
burden. 

3. Myth that California an d Massachusetts prospered bv cut- 
tin g property taxes. Nonsense! Those states are home to high tech- 
nology industries whose prosperity is unrelated to property tax re- 
duction. 

4. Myth that abolishing property taxes will bring prosperity. 
Good schools, competent governments, and quality environment 
attract industry. Without tax support these attributes will be in 
peril. 

5. Myth that essential services will be unaffected. Proponents 
have not defined essential services. Education, roads, welfare, 
public health, and law enforcement receive 75 percent of public 
funds. One-half of their tax support comes from property taxes. 

6. Myth that Montana governments have expanded during ec- 
onomic stagnation. Actually, state and local expenditures have 
not kept pace with inflation. The legislature recently cut 
$100,000,000.00 from the state biennial budget. Local govern- 
ments face the loss of revenue sharing. Teacher salaries are well 
below national averages. 

CI-27 spells disaster. Vote AGAINST CI-27. 



These Arguments Prepared by: Ardi Aiken, Great Falls; Repre- 
sentative Gene Donaldson, Helena; Eric Feaver, Helena; Thomas 
Payne, Missoula; and Representative J. Melvin Williams, Laurel. 




CONSTITUTIONAL 
INITIATIVE NO. 30 



AN AMENDMENT 

TO THE CONSTITUTION 

PROPOSED BY INITIATIVE PETITION 



OFFICIAL BALLOT TITLE 
AND 

Attorney GeneraFs Explanatory Statement 

THIS INITIATIVE WOULD AMEND THE MONTANA CON- 
STITUTION TO AUTHORIZE THE LEGISLATURE TO DE- 
TERMINE THE RIGHTS AND REMEDIES FOR INJURY OR 
DAMAGE TO PERSON. PROPERTY. OR CHARACTER. CUR- 
RENTLY THE CONSTITUTION DOES NOT PERMIT LIMITS 
ON THESE RIGHTS AND REMEDIES. A TWO-THIRDS VOTE 
OF EACH HOUSE OF THE LEGISLATURE WOULD BE RE- 
QUIRED TO SET DOLLAR LIMITS ON DAMAGES FOR ECO- 
NOMIC LOSS RESULTING FROM BODILY INJURY. 



Argument For 
Constitutional Initiative No. 30 

Supporters of Initiative 30 see aspects of the Montana 
court system that cry out for reform. Unreasonable and ex- 
cessive jury awards are now common. All Montana is threat- 
ened by this chaos in our courts. If insurance coverage can be 
found, premiums are often excessive. 

Initiative 30 addresses the "liability crisis'" by clarifying 
the power of the Montana Legislature. Only the Legislature, 
whose power is in doubt today as a result of court decisions, 
can be expected to pass the reforms that are sorely needed. 

The effects of this crisis are visible everywhere. Taxes are 
increasing to pay for government self-insurance. Capable 
Montanans are declining to serve in public office and on the 
boards of non-profit corporations because they are afraid to 
risk their personal assets. Goods and services are being with- 
drawn because the risk of huge losses from lawsuits is unac- 
ceptably high in this slate. 

Insurance companies have left Montana, and many are 
simply refusmg to write new policies here. The risk of doing 
business here exceeds any profits that could possibly be 
earned in the limited Montana insurance market. 

New judge-made laws governing contracts plague all busi- 
nesses, large and small alike, and make business decisions a 
guessing game. All employers, including farmers, ranchers 
and labor unions, are subject to suit when they terminate em- 
ployees, and defense costs and damages are staggering. 

Defendants with assets, particularly government units, are 
often liable for an entire judgment, even though their own 
responsibility for an injury is minimal. Injured parties may 
be compensated several times over for their damages. 

Small businesses across the state are suffering from this 
crisis. While desperately-needed economic development and 
new jobs are on everyone's mind, the reality is that our exist- 
ing economy is being severely eroded by this crisis. 

Man> of these problems are not unique to Montana. What 
is unique is that our legislators' hands are tied by the courts 
when they try to fix the problems. 

Initiative 30 is a start to cure these abuses in the courts and 
to sol\ e our problems. Initiative 30 makes clear that our leg- 
islators have the authority to pass the kinds of solutions that 
legislatures in other states have already adopted. 



Rebuttal of Argument Against 
Constitutional Initiative No. 30 

Exaggerate. Paint your opponent as evil. Incite the emo- 
tions of your listeners. These are all familiar ploys of the trial 
lawyers. 

These ploys have been working well in Montana lately, 
judging from the size of the jury awards that trial lawyers 
have been winning. The opposition statement now moves 
these ploys out of the courtroom and into the initiative proc- 
ess. 

But, these arguments are inaccurate and misstate the real- 
ity of Initiative 30. 

The opponents argue that this amendment destroys the 
Montana Constitution. It doesn't. Rather, it provides an im- 
proved constitutional framework under which the Legisla- 
ture can address the abuses in our courts. 

In considering the opponents' exaggerations, voters 
should keep in mind the history of the interpretation of this 
section. The sole effect of Initiative 30 is to restore the inter- 
pretation consistently followed prior to 1 98 1 . 

The pre- 198 1 interpretation of the Constitution protected 
Montanans. .At that time, Montanans enjoyed the full protec- 
tion of their stale Constitution, as well as the federal Consti- 
tution. The argument that all protections are rendered mean- 
ingless by this Initiative is unrealistic. Initiative 30 is the 
essential first step in the process of correcting imbalances in 
the judicial system that unfairly favor those who bring suit. 
This process, called tort reform, is well under way around the 
country. 

The trial lawyers rely entirely on legalisms and emotions. 
Supporters of the Initiative rely on common sense. 

Your interests are better served by keeping Montana busi- 
nesses open than by permitting huge awards for nonexistent 
injuries. 



These .-Arguments Prepared by: Tim Babcock. Helena; Kay 
Foster. Billings,; and Marie Durkee, Helena. 



8 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 
CONSTITUTIONAL INITIATIVE NO. 30 



I — I FOR amending the Montana Constitution to authorize the Legislature to deter- 
' — ' mine the rights and remedies for injury or damage to person, property, or charac- 
ter. 

I — I AGAINST amending the Montana Constitution to authorize the Legislature to 
— determine the rights and remedies for injury or damage to person, property, or 
character. 



NOTE: The ballot title and explanatory statement was written by the Attorney General as required by 
state law. The complete text of Constitutional Initiative No. 30 appears on page 16. 



Argument Against 
Constitutional Initiative No. 30 

Only our Constitution provides the necessary shield and 
stability to protect Montana residents from the never ending 
attempts by misguided persons and special interest groups to 
bvpass the protections that we believe to be inviolate. These 
protections are guaranteed by our Constitution. The initia- 
tive would effectively destroy the Constitution and deprive 
all of us of the Ml legal redress and protection of our civil 
justice system which is one of the strongest and best any- 
where. 

The proponents of this attempt to effectively destroy our 
right to full legal redress as guaranteed by our Constitution, 
together with the basic protections it affords us all. are led by 
the wealthiest entities in this country. 

The Montana Constitution is a document designed solely 
for the benefit and protection of the people of this state. It is 
free of special interest provisions. It is carefully designed to 
protect all Montanans from the emotional and hysterical out- 
cries which we have ail observed. 

If the legislature does not have the restraints imposed by 
our Constitution, we will have lost our system of checks and 
balances which has forged the greatest strength of our demo- 
cratic society. The consequences of this initiative would af- 
fect ever> facet of our lives. No one branch of government 
should rule supreme, which would be the immediate result of 
a legislature unfettered by constitutional restraints. Those 
who hope to be benefitted will largely be the victims. 

The insurance industry has spent millions of dollars in this 
attempt to destroy our Constitution, and the basic protec- 
tions it affords us all, by saying that the legislature should not 
work within the framework of the Constitution. The propo- 
nents would deprive us of full legal redress, and our civil 
rights, remedies and claims for relief of nearly every kind 
would then be set by a bare majority of the legislature, free of 
constitutional restraints. This includes the right of privacy, 
the right to open meetings, the right to private property and 
ownership as well as other important rights. 

Imagine what special interests would then do to further 
undermine our individual protections. 

The proponents attempt to justify this attack on our Con- 
stitution by the suggestion that we may get lower insurance 
rates or that insurance may be more available. Even if true, 
the price is unacceptable. However, it is untrue and known 
by the proponents to be untrue. 

This is the most onerous proposal ever presented to the 
voters of this state. The choice is clear — Trust our Constitu- 
tion or trust the insurance industry. 



Rebuttal of Argument For 
Constitutional Initiative No. 30 

U. S. Supreme Court Justice Black, said in 1940; 
"Under our constitutional system, courts stand 
as a ... refuge for those who might otherwise 
suffer because they are helpless, weak, outnum- 
bered or because they are victims of prejudice 
and public excitement." 

This year the insurance industry started a $6.5 million ad- 
vertising campaign to sell "the lawsuit crisis" — to create 
such prejudice and public excitement. 

But this so-called "liability crisis" is a myth according to 
Consumer Reports, August, 1986, the Wall Street Journal, 
the National Center For State Courts, the National Associa- 
tion of Attorneys General, the U. S. Government Accounting 
Office, and others. 

The fact is that the insurance industry is making billions 
while court filings are significantly lower in Montana and the 
average verdict adjusted for inflation has not changed for the 
last twenty years. 

Proponents say we must sacrifice our Constitutional rights 
because insurance premiums are too high. But premiums \yill 
not go down even if we give up our rights. In the states which 
have passed laws demanded by insurers, premiums have 
gone up or remained the same. 

Also, the legislature already has the power to pass such 
laws if it wants. What the legislature cannot do under the 
present Constitution is treat one Montanan differently from 
another in passing laws. Initiative #30 would authorize such 
discrimination. 

Ask yourself; do you have a lobbyist on your personal pay- 
roll to continually protect your fundamental rights? If you do 
not. don't destroy your Constitution. Vote no on Initiative 
#30. 



These Arguments Prepared by: James P. O'Brien, Mis- 
soula; Representative Dorothy Bradley, Bozeman; John 
Hoyt, Great Falls; Sharon Morrison, Helena; and Karl 
Englund, Missoula. 




LEGISLATIVE 
REFERENDUM 
NO. 100 



A LAW PROPOSED 
BY THE LEGISLATURE 



OFFICIAL BALLOT TITLE 

AN ACT TO ESTABLISH A STATE LOTTERY AND PROVIDE 
FOR ITS ADMINISTRATION; AMENDING SECTION 23-5- 
202, MCA; PROVIDING EFFECTIVE DATES; AND PROVID- 
ING THAT THE PROPOSED LOTTERY LAW BE SUBMITTED 
TO THE ELECTORS OF THE STATE OF MONTANA. 



Attorney General's Explanatory Statement 

The Legislature submitted this proposal for a vote. It would estab- 
lish a state lottery and provide for its administration. Players could 
purchase from the state chances to win a prize. The lottery would be 
administered by a state lottery commission. 



Argument For 
Legislative Referendum No. 100 

Montanans will finally be given the opportunity to ap- 
prove a stale lottery when you cast your ballots in favor of 
Legislative Referendum 1 00. The Montana State Lottery will 
offer a new revenue source to provide direct property tax re- 
lief for Montana citizens. The Stale Lottery provides a form 
of entertainment for those that play and is a way to support 
unfunded local government services for those that don't par- 
ticipate. It is a painless procedure to raise needed revenue 
and is strictly a voluntary action. In fact, if you don't play 
then you don't pay. 

When studying the results of recently established state lot- 
teries it can be clearly shown that the Montana State Lottery 
could anticipate sales of $50 per capita within three years of 
initiation. Based on the experience of neighboring state lot- 
teries it can be projected that first year net revenue for Mon- 
tana citizens tax relief could be approximately $ 10 million. 

The Montana State Lottery revenue is to be divided as fol- 
lows: 40% is distributed for public school retirement equali- 
zation aid to reduce required local property tax levies; 45% is 
for prizes that will be divided among thousands of winners; 
5% is to be paid as commissions for the sale of lottery tickets; 
and 1 0% is for operation of the lottery which is self-sustaining 
and must exist within its budget or cut back expenses. 

Legislative Referendum 100 guarantees the lottery will be 
run honestly and controlled tightly and will continue the per- 
fect record established by the other 24 state lotteries of total 
freedom from organized crime infiltration. The Montana 
Stale Lottery will be attached to the Department of Com- 
merce and is guided and operated by five commission mem- 
bers and a director, all of whom are appointed by the Gover- 
nor. 

Lottery tickets are purchased predominantly by middle in- 
come people and no tickets may be sold or prizes awarded to 
anyone under age 1 8. Numerous studies disprove claims that 
the poor buy more than their proportion of tickets; actually, 
they buy less. 

State lotteries have been in existence for over 22 years and 
well over half the population of the United States have access 
to a lottery. State lotteries are the third major revenue source 
for governments and now Montanans will have the opportu- 
nity to take advantage of this revenue enhancement source. 
With our present loss of jobs and critical tax revenues from 
our major industries of agriculture, lumbering, mining, and 
oil and gas production, the income generated from the Mon- 
tana State Lottery will help offset these losses. In addition, 
the lottery will provide jobs for the private sector through the 
additional income generated from commission sales. 



Purchasing a lottery ticket is a voluntary act which helps 
brighten Montana's financial future and at the same time 
gives the people some entertainment. Montanans want and 
should have an opportunity to act on their right to voluntar- 
ily participate or not. Vote yes on Legislative Referendum 
100 to approve the Montana Stale Lottery. 



Rebuttal of Argument Against 
Legislative Referendum No. 100 

The opponents to the Montana Lottery (Legislative Refer- 
endum 100) claim that in the name of the Lottery the state 
can promote any form of casino gambling. This is simply not 
true. 

The truth is that the Lottery law itself specifically guards 
against this in Section 2 (3) (a) and (b) that the state lottery 
may not operate a slot machine or carry on any form of gam- 
bling prohibited by the laws of this state; or carry on any form 
of gambling permitted by the laws of this state but which is 
not a lottery game within the scope of this section and within 
the definition of "lottery game". 

The Lottery in Montana, based on all valid statistics and 
experience, will produce $ 1 million and this is money which 
would not otherwise be received and is voluntarily contrib- 
uted. 

The Montana State Lottery is a grass roots effort with a tax 
reduction program directly benefiting the people who make 
the final decision. Lottery ticket purchases are voluntary; if 
you don't play, you don't pay. 

The 24 states that currently have a lottery have been suc- 
cessful in generating monies to ease the tax burden of their 
citizens. The lottery can provide needed cash for Montana 
projects that would otherwise add to the burden of our tax- 
payers. IN NOVEMBER, VOTE YES ON LEGISLATIVE 
REFERENDUM 100 TO ESTABLISH THE MONTANA 
STATE LOITERY. 



These Arguments Prepared by: Senator Lawrence G. 
(Larry) Stimatz, Butte; Representative Robert J. (Bob) 
Pavlovich, Butte; and Murdo Campbell, Helena. 



10 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 

LEGISLATIVE REFERENDUM NO. 100 

FISCAL NOTE 

THIS MEASURE WOULD GENERATE APPROXIMATELY $2.9 MILLION DURING A 
NORMAL OPERATING YEAR. THIS REVENUE WILL BE DISTRIBUTED FOR PUBLIC 
S(™OL RETIREMENT EQUALIZATION AID TO REDUCE MANDATORY PROPERTY 
TAX LEVIES IT WILL TAKE 8 MONTHS FOR A LOTTERY TO BE FULLY OPERATIONAL 
AFTER THE MEASURE IS APPROVED. 



D 
D 



FOR establishing a state lottery. 
AGAINST establishing a state lottery. 



NOTE: The ballot title was written by the Legislature and the explanatory statement was written by the Attorney 
General as required by state law. The complete text of Legislative Referendum No. 100 appears on pages 17-20. 



Argument Against 
Legislative Referendum No. 100 

If you think the proposed Lottery is to be a simple weekly 
or monthly drawing of a ticket stub from a big pot, you are 
sadly mistaken. Read the definition of "Lottery" given in 
Section 3, paragraph 4 of the referendum: 

"Lottery game means any procedure, including 
on-line or other procedure using a machine or 
electronic device . . . but is not limited to weekly 
(or other longer time period) winner games, in- 
stant winner games, daily number games, and 
sports pool games ..." 
In the name of the "lottery" the state can promote any 
form of gambling that any casino could employ in Montana. 
If this lottery referendum passes, the state of Montana will no 
longer simply allow gambling; the state will promote gam- 
bling. And this is a crucial change of our tradition. 

We do not want Montana to be in the business of promot- 
ing gambling. Good government and gambling don't mix! 

A LotterN in Montana would follow the same pattern of 
other state operated lotteries. They usually begin with some 
form of weekly drawing. Because of the novelty, any individ- 
uals who do not usually gamble are attracted and try it. As the 
novelty wears off, and as most people continue to lose, the 
amount of money generated declines. Another form of lot- 
tery is introduced, usually in "instant" form which involves a 
ticket with a rub-off square. Since almost everyone loses, in- 
terest again declines. Then, the lottery introduces some form 
of the "numbers", or player selection game. The bettor 
chooses some combination of numbers, and winners are se- 
lected on a daily basis. And this form of lottery is the only one 
that has sustained any momentum among the different forms 
of state-operated lotteries, the old numbers racket. 

A Lotter>' would put state government in the position of 
advertising lottery games at public expense. Most of those en- 
ticed to play would always lose. The purpose of government 
is to protect citizens not exploit them. A strong Montana so- 
ciety is built on hard work, patience and sustained effort. In 
contrast lotteries sell fantasy values and take advantage of 
human weaknesses. 

Property owners should not be misled to believe that lot- 
tery revenue will significantly reduce their taxes. Using reve- 
nue generated by the Maine state lottery as a basis for com- 
parison, a Montana lottery would bring in enough revenue to 
reduce property taxes in our state by '/z of 1 percent. 

A state lotter>' would be more trouble that it is worth. Le- 
gitimate business would lose the income which will go into 



lottery tickets instead of consumer goods. Wage earners can't 
spend the same money twice. The poorer people would lose 
proportionately much more than they can afford to in the 
state run sucker games. And the state will lose in terms of 
character of a new generation of citizens raised with the new 
gambling ethic. The "L" in Lottery stands for losers. 

We don't have to allow it to happen here. Montana can be 
the state where the "Lotterization of America" is turned 
back. 



Rebuttal of Argument For 
Legislative Referendum No. 100 

So, for the price of a little voluntary entertainment Mon- 
tanans can all reap a windfall in property tax relief If you be- 
lieve that there is a bridge you might want to consider buying 
in Brooklyn. 

The games proposed in the referendum, like all gambling, 
would create no new wealth. They would simply transfer in- 
come from losers to winners with the state taking a rake-off. 
Those hurt most by losing would be low income families. The 
consistent big winners would be the manufacturers and mar- 
keters of the electronic and mechanical devices the state 
would buy or lease to conduct its gambling operations. 

But what about tax relief? Proponents of Referendum 100 
say their games will bring in $ 1 million to be used to relieve 
property taxes. The $ 1 million figure appears to be based on 
the experiences of "neighboring states" and on the assump- 
tion that Montanans would spend a yearly average of $50.00 
per person on the state run games. We doubt that they would. 
Even if they were to do so, however, when applied to the total 
state property tax bill of $1.3 billion, $10 million would 
result in a property tax reduction of less that 8/10 of 1%. 

What is being proposed to you in this referendum is the 
placing of state government directly in the business of gam- 
bling and the creation of a new bureaucracy for that purpose. 
The benefit would be tax relief almost too small to measure. 
Do you really think it's worth it? 



These Arguments Prepared by: Senator Bob Brown, 
Whitefish; Representative John Harp, Kalispell; and George 
Harper, Helena. 



11 




INITIATIVE 
NO. 104 



A LAW PROPOSED 
BY INITIATIVE PETITION 



OFFICIAL BALLOT TITLE 
AND 

Attorney General's Explanatory Statement 

THIS INITIATIVE WOULD PROHIBIT THE STATE FROM 
REGULATING THE WHOLESALE, JOBBER, AND RETAIL 
PRICES OF MILK. THE STATE WOULD RETAIN THE POWER 
TO REGULATE THE PRICES AT WHICH MILK OWNED BY A 
PRODUCER IS SOLD IN BULK TO A DISTRIBUTOR. THE 
STATE WOULD LOSE SOME OF ITS POWER TO REGULATE 
THE PROCESSING. STORAGE. DISTRIBUTION, AND SALE 
OF MILK. JOBBERS DEALING IN MILK WOULD NO 
LONGER HAVE TO BE LICENSED BY THE STATE. 



.Argument For 
Initiative No. 104 

When Montanans vote for 1-104, the Milk Price Decontrol 
Act of 1986, they are voting for Montana dairy farmers and 
for lower milk prices in the grocery store. 

1-104 would eliminate government authority to set mini- 
mum prices for milk at the wholesale, jobber, and retail lev- 
els. The Board of Milk Control would continue to set mini- 
mum prices at the farm level. This will ensure Montana dairy 
farmers of a fair price for their milk. 

It is currently illegal to sell a gallon of whole milk for less 
than $2.55. There is no maximum price. States that do not 
control the wholesale and retail price of milk usually have 
regular retail prices 30« to 70C per gallon cheaper than Mon- 
tana's minimum price. It is illegal for stores to put milk on 
sale in Montana. In other states, sale prices are very low, 
sometimes as low as $ 1 .00 per gallon. 

Of the 2 1 states which at one time controlled the wholesale 
or retail price of milk. 1 6 have decontrolled their milk prices. 
Studies have demonstrated that when milk prices are decon- 
trolled, the price drops, and stays lower than before decon- 
trol. 

Many Montana dairy farmers are for 1-104. Lower super- 
market prices will allow them to sell more milk. Experience 
shows that milk consumption increases when prices are 
lower. With the exception of North Dakota, none of Mon- 
tana's neighboring states control wholesale or retail prices, 
yet the dairy industry flourishes and consumers have a safe 
and adequate supply of milk at lower prices than Montana's. 

In surrounding states, milk is available at prices 30C to 40c 
per gallon cheaper at the wholesale level than Montana's le- 
gal minimum. The Board of Milk Control cannot stop stores 
from buying this cheap out-of-state milk, and then selling it 
in Montana at our high controlled retail price. In order to 
preserve jobs, the Montana dairy industry needs the freedom 
to meet the competition from out-of-state milk. Wholesale 
and retail price controls are a detriment rather than a safe- 
guard to the Montana milk industry. 

Montana milk is currently shipped to Wyoming, where it 
is sold at a lower wholesale price than is legal in Montana. It is 
also sold at a lower retail price in Wyoming. The wholesalers 
manage to make a profit at these lower prices. A yes vote for 
1-104 will eliminate obsolete and detrimental price controls, 
and will allow Montana's milk consumers to share in the ben- 
efits of progress made in milk processing, transportation, and 
improved sales efficiencies. 



Montana consumers pay millions of dollars in excess milk 
costs ever>- year, money which consumers could keep if I- 1 04 
passes. That money, spent throughout Montana's economy 
would create new jobs. As it is. much of that money is sent out 
of state to corporate stockholders. 

We urge you to vote for a healthy Montana economy, ba 
lower milk prices and isti Montana dairy farmers. Vote iiir I- 
104. 

Thank you. 



Rebuttal of Argument Against 
Initiative No. 104 

I- 1 04 was drafted with the help and advice of several Mon- 
tana dairy farmers. On the advice of the Legislative Council, 
we have simplified some language and eliminated redundant 
sections of the old law. The fair trade rule concerning prices 
paid to producers simply restates what is already in the law. 
Section 4 authorizes the Board to set minimum prices. Sec- 
tions 7 and 1 1 give the state the power to enforce minimum 
prices. 

Wyoming and South Dakota have decontrolled their milk 
prices within the last several years. Since that time, the 
amount of milk produced in each state has increased, the 
number of distributors has not been greatly affected, inde- 
pendent jobbers continue to do business, and milk continues 
to be available in all parts of the state at lower prices than are 
legal in Montana. 

A survey of milk prices in surrounding decontrolled states 
was conducted by an independent research group in July of 
1986. They found the average supermarket price of one gal- 
lon of whole milk to be $2.06 in Idaho, $2.15 in South Da- 
kota, and $2.2 1 in Wyoming. 

The main opposition to I- 1 04 is from a multi-billion dollar 
out-of-state corporation which controls 50% of the milk mar- 
ket in Montana, whose loyality is to it's corporate stockhold- 
ers, not Montana's dairy industry. 

I- 1 04 has support from a Montana-based farmer coopera- 
tive with 74 member daio farmers. In addition, many other 
Montana dairy farmers support I- 1 04, including many of 
Beatrice's producers. 

We again urge you to vote for 1-104. 



These .Arguments Prepared by; Steve McGregor, Boze- 
man: Don Doig. Bozeman; and Delbert Kamerman, Man- 
hattan. 



12 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 

INITIATIVE NO. 104 

FISCAL NOTE 

GENERAL FUND REVENUES FROM ANNUAL LICENSING WILL NOT DECREASE SIG- 
NIFICANTLY. IMPLEMENTATION OF THE MEASURE COULD INCREASE ASSESS- 
MENTS AGAINST MILK PRODUCERS BY $89^)50 PER YEAR. INCREASED COMPETI- 
TION MAY ELIMINATE SOME MONTANA PRODUCERS WHICH COULD AFFECT 
PROPERTY TAX REVENUES. THERE MAY BE COST-SAVINGS TO MONTANA INSTITU- 
TIONS THAT PURCHASE MILK. 

I I FOR abolishing state regulation of the wholesale, jobber, and retail prices of milk. 

I I AGAINST abolishing state regulation of the wholesale, jobber, and retail prices of milk. 

NOTE: The ballot title and explanatory statement was written by the Attorney General as required by state law. The 
complete text of Initiative No. 104 appears on pages 20 - 23. 



Argument Against 
Initiative No. 104 

This initiative proposed by the Libertarians and a few dis- 
gruntled dairy farmers in the Bozeman area, is another at- 
tempt to destroy the milk industry in Montana. 

They say they have changed the proposal this time, and 
their proposed Initiative 104 will protect the dairy farmers 
and only decontrol prices at the jobber, wholesale and retail 
levels. 

Nothing could be further from the truth. Initiative 104 re- 
peals all the 'fair trade' rules promulgated by the Board of 
Milk Control, including the rule that makes it a violation of 
the law to pay dairy farmers less than the minimum price as 
fixed by the Board of Milk Control. 

Initiative 104 also repeals the section of the law that in- 
cludes the legislative findings that the milk industry "af- 
fected the public interest". 

Without this provision in the law, the State of Montana 
will be without the authority to invoke the police power of 
the state and therefore, will loose the power to regulate the 
milk industry at any level including prices paid to dairy 
farmers. 

By repealing jobber prices, it immediately puts 8 1 jobbers 
who are independent, small businessmen oiil of business. 
There are two reasons for this. One is that without having a 
price schedule that a jobber pays for milk he buys from a milk 
processor, he becomes unable to compete because he could 
be charged any price the traffic would bear, but he would 
have no protection at the wholesale or retail level and there- 
fore, no margin to continue his operation. 

Repeal of wholesale and retail prices would, within 60 to 
90 days, eliminate the five independent, privately owned 
milk distributors who are left in Montana. With these five 
plants out of business, we lose 1 00 to 200 jobs. We also lose a 
market for approximately 70 dairy farmers who are so re- 
motely located as to make it impractical or uneconomical to 
transport their milk to some other market. This would lose 
approximately another 140 jobs. 

Montana is not by any stretch of the imagination a "dairy 
state". We have approximately 280 dairy farmers scattered 
around the state producing milk for approximately 800,000 
people. These 800,000 people are scattered over 148,000 
square miles or about 5 persons per square mile. This makes 
production and distributing difficult. Passage of Initiative 
104 would eliminate service to most or all of the rural and 
remote areas of Montana. As a matter of fact, some of the 
sponsors of this initiative have already eliminated service to 



many areas who are now being served by jobbers or indepen- 
dent, privately owned dairies. 

The legislature found years ago and have reconfirmed over 
the years that you cannot protect the dairy farmers price for 
his milk unless you can give his market (distributor) protec- 
tion. Passage of Initiative 104 will eliminate at least half of 
our dairy farmers and all of the jobbers. 

A large majority of the dairy farmers in Montana urge you 
to VOTE NO on Initiative 104 to protect a viable industry 
and the consumers of Montana. 



Rebuttal of Argument For 
Initiative No. 104 

When supporters of 1-104 state that if it is passed it will 
bring lower prices is pure speculation. The chances are 
greater that a large segment of Montana consumers in remote 
areas or sparsely populated areas will pay more. 

Supporters of 1-104 allege prices in other states $.30 to 
$ . 70 per gallon less than prices in Montana. What they dOJlQl 
say is that those prices are weekend specials or price war 
prices and are not the prices usually encountered by con- 
sumers in other states. 

Just because other states have decontrolled is no reason to 
decontrol the Milk Industry in Montana. What supporters of 
Initiative 104 do not tell you is that in states like California 
since decontrol, many processors and dairy farmers are now 
bankrupt. 

The supporters of 1-104 allege that stores in Montana can 
buy cheaper milk out-of-state and take advantage of con- 
sumers in Montana. That is one of the Prime functions of the 
Milk Control law to prevent thos e sort of practices. 

Lastly and probably most important is the fact that I- 1 04 is 
so poorly drafted and repeals the authority of Montana to ex- 
ercise the "police power" that regulation of the Milk Industry 
at any level is doubtful at best and more likely impossible. 

A majority of Montana's farmers and the Milk Industry in 
general, urges you to VOTF NO — ON 1-104!! 



These Arguments Prepared by: Senator Ted Neuman, 
Vaughn: Senator Ray Lybeck, Kalispell; K. M. Kelly, Helena: 
James L. Fleming, Kalispell: and George E. Schulze, Kalis- 
pell. 



13 




INITIATIVE 
NO. 105 



A LAW PROPOSED 
BY INITIATIVE PETITION 



OFFICIAL BALLOT TITLE 
AND 

Attorney General's Explanatory Statement 

THIS INITIATIVE WOULD PROVIDE THAT THE AMOUNT 
OF TAXES LEVIED ON PROPERTY CLASSES 3. 4, 6, 9, 12, 
AND 14 COULD NOT EXCEED THE AMOUNTS LEVIED ON 
THOSE CLASSES OF PROPERTY FOR THE TAXABLE YEAR 
1986. THE ACT WOULD TAKE EFFECT ON July 1, 1987, UN- 
LESS PRIOR TO THAT DATE THE LEGISLATURE PASSED 
AN ACT LOWERING TAXES ON THE ABOVE LISTED 
CLASSES OF PROPERTY AND ESTABLISHING ALTERNA- 
TIVE REVENUE SOURCES. 



Argument For 
Initiative No. 105 

Initiative 105 was proposed to help balance our state and 
local tax system. Montana relies too much on property taxes 
and not enough on other sources of revenue. The Billings Ga- 
zellfi recently reported that, as a percentage of income, Mon- 
tana taxpayers pay the second highest amount of property 
taxes in the nation. Initiative 105 deals with this imbalance 
by limiting total property taxes next year to this year's level. 

Initiative 105 is fair. It allows the legislature time to iden- 
tify alternative sources of revenue before taxes on certain 
classes of property are frozen. 

Initiative 105 should not threaten public se^^'ices. The 
sponsors of Initiative 105 have children in our public schools 
and universities. We support public education and local gov- 
ernment services. But we oppose further increases in prop- 
erty taxes. 

Initiative 105 will stop the significant property tax hikes 
experienced in recent years. Over the past six years, property 
taxes in Montana have risen more than 50%. 

Increases in property taxes harm business opportunities in 
Montana. A more balanced approach to taxation will en- 
hance the attractiveness of Montana for job-creating busi- 
nesses. Passage of Initiative 105 should improve our state's 
business climate, thus resulting in greater employment. 

Initiative 105 is a sensible approach to tax policy. It forces 
the Legislature to face the reality of an unbalanced tax system 
that fails to produce adequate revenues to fund government. 

In conclusion. Initiative 105 is designed to improve Mon- 
tana's economy by freezing property taxes, providing balance 
to our tax system, generating alternative forms of revenues to 
fund public services, and stimulating economic development 
and job creation. 



Rebuttal of Argument Against 
Initiative No. 105 

Initiative 105 requires that property taxes be frozen at 
their 1986 level on residential, main street small business 
property and on agricultural property if the 1 987 Legislature 
fails to take action to reduce property taxes and provide alter- 
native sources of revenue for local governments. 

Although Initiative 1 05 does not name every class of prop- 
erty, its intent is certainly not to have anyone's taxes in- 
creased. If the taxes on classes of property not named in Ini- 
tiative 105 are increased it will be another poor decision by 
the Legislature, not the Initiative. The Legislature must be 
forced to place tax reform at the top of the list of issues to be 
addressed by the 1987 session. 

The Equal Protection Clause allows properly to be placed 
in separate classes and taxed at different rates. Initiative 105 
would continue to treat property within each class the same 
and, therefore, does not conflict with the Equal Protection 
Clause. 

Montana's property taxes on all classes of property must 
be decreased in order to impro\ e the business climate. The 
Legislature is the proper body to accomplish this goal. The 
passage of Initiative 1 05 will send a clear message to our Leg- 
islative bodies that the voters of Montana favor reform of our 
tax structure. Only by sending such a clear message will the 
Legislature feel obligated to address the problem with rcascn 
and analysis. 

• Passage of Initiative 105 will force the Legislature to ad- 
dress the problems of taxation in Montana and arrive at a 
proper solution. 



These Arguments Prepared by: Gary Buchanan. Billings; 
George .Anderson. Helena; and R. Stephen Browning, Hel- 
ena. 



14 



HOW THE ISSUE WILL APPEAR ON THE BALLOT: 

INITIATIVE NO. 105 

FISCAL NOTE 

THIS MEASURE WOULD REDUCE STATEWIDE PROPERTY TAX COLLECTIONS BY AP- 
PROXIMATELY $30 MILLION DURING THE 1988-89 BIENNIUM FOR PROPERTY IN 
PROTECTED CLASSES. ALTERNATELY, UNPROTECTED PROPERTY MAY PAY IN- 
CREASED TAXES AND/OR GOVERNMENT SERVICES MAY BE REDUCED. 

I — I FOR limiting certain property taxes to 1986 levels unless the legislature reduces property 

— taxes prior to July 1,1987, and establishes alternative revenue sources. 

I — I AGAINST limiting certain property taxes to 1 986 levels unless the legislature reduces prop- 

— erty taxes prior to July 1 , 1 987, and establishes alternative revenue sources. 

NOTE: The ballot title and explanatory statement was written by the Attorney General as required by state law. The 
complete text of Initiative No. 105 appears on page 23. 



Argument Against 
Initiative No. 105 

Overall tax reform in Montana is overdue. Without ques- 
tion this reform should include some type of property tax 
consideration. Initiative No. 105, however, is simply the 
wrong vehicle to achieve that goal for a number of reasons. 

The legislature is the appropriate body to make and revise 
tax policy. The proponents of Initiative 105 admit this in 
their "policy" statement. The tax structure of Montana is in- 
tricate and complex and should be altered only with full de- 
bate and careful consideration of the impact on other tax rev- 
enue. The tax structure can aptly be compared to a line of 
dominos — topple one and all others are affected. 

The legislature should be allowed to act and deliberate 
without mandated restrictions. Initiative 105 requires the 
legislature to react in a certain manner or the initiative will 
take effect. In reacting to this coercion the legislature, under 
pressure, may well enact legislation which could worsen the 
overall tax situation. 

If enacted, the initiative itself will not freeze all property 
taxes at 1986 levels. The initiative excludes property in 
classes I, 2, 5, 7, 8, 10, 11, 13, 15, 16, 17 and 18 from the 
freeze. Taxes will be allowed to increase on such property as 
agricultural equipment, aircraft, boats, and timber land, to 
name a few. These taxpayers whose property taxes are not 
frozen will be forced to pay more to make up the defici*. This 
concept is in direct conflict with the equal protection clause 
of the U. S. and Montana Constitutions. 

Finally, tax reform must come in Montana. It must be ar- 
rived at by way of leason and analysis with a full understand- 
ing of the short term and long term implications for the tax- 
paying public. 

WE APPEAL TO THE VOTERS TO DEFEAT THIS INI- 
TIATIVE AND ALLOW OUR ELECTED REPRESENTA- 
TIVES TO TAKE A REASONED APPROACH TO A 
PROBLEM IN WHICH ALL MONTANANS SHARE. 



Rebuttal of Argument For 
Initiative No. 105 

Again, no one argues that something should be done about 
tax reform in Montana. Initiative 1 05, however, is simply not 
the appropriate way to address the problem. Contrary to 
what the sponsors suggest Initiative 105 will not freeze all 
property taxes at the 1986 levels . The classes of property 
which will be frozen and the classes of property which will be 
exempt has been determined by the sponsors of Initiative 
105. 

The sponsors of Initiative 105 give no facts to support 
their claim that passage of this initiative will improve Mon- 
tana's business climate. We believe that comprehensive tax 
reform is more likelv to improve the business climate than is 
this piecemeal approach. 

Further, the sponsors of Initiative 105 fail to point out that 
passage of the initiative will place a cap on school district lev- 
ies. This is one of the few areas where people can directly vole 
to impose additional taxes. Initiative 105 would hinder the 
public's ability to fund local education at the level the public 
feels is appropriate. 

Tax reform is necessary and overdue. However, it should 
be undertaken, only after a well-reason ed review of the entire 
tax structure and not by a selective fre e/e on certain types of 
property . 

In conclusion, THE PROPER PLACE FOR TAX RE- 
FORM IS IN THE MONTANA LEGISLATURE which can 
give full consideration to all the complex provisions of the 
state tax system. We urge you, the voters, to vote NQ on Ini- 
tiative 105. 



These Arguments Prepared by: Bob Watt, Missoula; Linda 
Skaar, Helena; Delane Beach, Baker; Gordon Morris, Hel- 
ena; and Charles E. Erdmann, Helena. 



15 




Complete Text of 
CONSTITUTIONAL 
AMENDMENT NO. 15 



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF 

MONTANA: 

Section 1. Article II, section 14, ofthe Constitution of the State of 
Montana is amended to read: 

"Section 1 4. Adult rights. A person 1 8 years of age or older is an 
adult for all purposes, except that the legislature or the people by 
initiative may establish the legal age for purchasing, consuming, or 
possessing alcoholic beverages." 

Section 2. Effective date. If approved by the electorate, this 
amendment becomes effective January 1. 1987. 

Section 3. Submission to electorate. This amendment shall be 
submitted to the electors of the State of Montana at the general 
election held in November 1986 by printing on the ballot the full 
title of this act and the following: 

FOR removing the legal drinking age of 1 9 years from the consti- 
tution and allowing the legal drinking age to be established by stat- 
ute or initiative. 

AGAINST removing the legal drinking age of 19 years from the 
constitution and allowing the legal drinking age to be established by 
statute or initiative. 




Complete Text of 
CONSTITUTIONAL 

AMENDMENT NO. 16 



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF 
MONTANA: 

Section 1. Repealer. Article XIII, section 3, ofthe Constitution of 
the State of Montana is repealed. 

Section 2. Submission to electorate. This amendment shall be 
submitted to the electors of Montana at the general election to be 
held November 4, 1986, by printing on the ballot the full title of this 
act and the following words: 

FOR abolishing the Montana salary commission. 

AGAINST abolishing the Montana salary commission. 



^ 



Complete Text of 
CONSTITUTIONAL 
INITIATIVE NO. 27 



BE IT ENACTED BY THE PEOPLE OF THE STATE OF 
MONTANA: 

Section 1. .Article VIII, Section 7, ofthe Constitution ofthe State 
of Montana is amended to read: 

"Section 7, Ta.x appeals. The legislature shall provide indepen- 
dent appeal procedures for taxpayer grievances about appraisals, 
a s se s sments, equalization, and taxes. The legislature shall include a 
review procedure at the local government unit level." 

Section 2. .Article VIII, ofthe Constitution ofthe State of Mon- 
tana is amended by adding a new section to read: 

"Section I 5. Certain taxes prohibited - certain tax changes only 
by referendum or initiative. No tax shall be imposed on any real or 



personal property. The establishment of a sales tax, or the increase 
of sales tax or personal income tax shall be accomplished only by 
referendum ofthe legislature with the approval of a m^ority ofthe 
qualified electors or initiative ofthe people. " 

Section 3. Article Xll. Section I, of the Constitution of the State 
of Montana is amended to read: 

"Section I: Agriculture. (I) The legislature shall provide for a 
Department of Agriculture and enact laws and provide appropria- 
tions to protect, enhance, and develop all agriculture. (2) Special 
l evies may be made on livestock and on agricultural commodities 
for disease control and indemnification, predator control, and live - 
stock and commod i ty inspect i on, protection, research, and pr omo - 
tion. Revenue derived shall be used solely for the purposes ofthe 
lev i es. " 

Section 4. Article VIII, Sections 3, 4, and 5, ofthe Constitution of 
the State of Montana are repealed. 

"Section 3. Property tax administration. The state shall ap - 
praise, assess, and equalize the valuat i on of a l l property which is to 
be taxed in the manner provided by law. 

Section 4 . Equal valuation. .All taxing jurisdictions sha l l use the 
assessed valuation of property established by the state. 

Section 5. Property tax exemptions. ( 1 ) The legislatu r e may ex - 
empt from taxation. (A) Property ofthe United States, the state, 
counties, cities, towns, school districts, municipal corporation s , 
and public libraries, but any private inte r est in such p r operty may 
be taxed separate l y. (B) Institutions of purely public charity, hospi - 
tals and places of burial not used or held for p r ivate or corpo r ate 
profit, places for actual religious worship, and property used exclu - 
sively for educational purposes. (C) .Any other classes of property. 
(2) The legislature may authorize creation of special improvement 
districts for capital i mprovements and the maintenance the r eof It 
may authorize the assessment of charges for such improvements 
and maintenance against tax exempt property directly benefited 
therebv." 



Complete Text of 
CONSTITUTIONAL 
INITIATIVE NO. 30 



BE IT ENACTED BY THE PEOPLE OF THE STATE OF 
MONTANA: 

Section 1. Article II, section 1 6, ofthe Constitution ofthe State of 
Montana is amended to read: 

"Section 16. The administration of justice. UJ Courts of justice 
shall be open to every person, and speedy remedy afforded for 
every injury of person, property, or character. Right and justice 
shall be administered without sal e denial, or delay. 

Lll No person shall be deprived of Jjusiull legal redress for injury 
incurred in employment for which another person may be liable 
except as to fellow employees and his immediate employer who 
hired him if such immediate employer provides coverage under the 
Workmen's Compensation Laws of this state. Right and just i ce 
shall be adm i nistered without sale, den i al, or delay. 

(31 This section shall not he con strued as a limitation uPon the 
authority ofthe legislniure to ena ct statutes establishing, limiting. 
modifying, or abolishing remedi es, claims for relief damages, or 
allocations of responsihilitv for damages in any c ivil proceeding: 
except thai any express dollar li m its on compensatory damages for 
actual economic loss for bodily iniury mu st he approved by a 2/3 
vote of each house of the legislature. 

Section 2. EtTective Date. This amendment is efieclive on ap- 
proval ofthe electorate." 




16 




Complete Text of 
LEGISLATIVE 
REFERENDUM NO. 100 



BE IT ENACTED BY THE LEGISLATURE OF THE 
STATE OF MONTANA: 

Section 1. Short title. [Sections 1 through 20] may be cited as the 
"Montana State Lottery Act of 1985". 

Section 2. Purpose ( 1 ) The purpose of [sections 1 through 20] is 
to allow lottery games in which the player purchases from the state, 
through the administrators of the state lottery, a chance to win a 
prize. [Sections 1 through 20] do not allow and may not be con- 
strued to allow any game in which a player competes against or 
plays with an\ other person, including a person employed by an es- 
tablishment in which a lottery game may be played. 

(2) The administration and construction of [sections 1 through 
20] must comply with Article III, section 9, of the Montana consti- 
tution, which mandates that all forms of gambling are prohibited 
unless authorized by acts of the legislature or by the people through 
initiative or referendum. Therefore, [sections 1 through 20] must 
be strictly construed to allow only those games that are within the 
scope of this section and within the definition of "lottery game". 

(3) The state lottery may not: 

(a) operate a slot machine or carry on any form of gambling pro- 
hibited by the laws of this state; or 

(b) carry on any form of gambling permitted by the laws of this 
state but which is not a lottery game within the scope of this section 
and within the definition of "lottery game". 

Section 3. Definitions. As used in [sections I through 20], the fol- 
lowing definitions apply: 

(1) "Commission" means the state lottery commission created 
by [section 4]. 

(2) "Director" means the director appointed by the governor un- 
der [section 6] to administer and manage the state lottery. 

(3) "Lottery" or "state lottery" means the Montana state lottery 
created and operated pursuant to [sections 1 through 20). 

(4) "Lottery game" means any procedure, including any on-line 
or other procedure using a machine or electronic device, by which 
one or more prizes are distributed among persons who have paid 
for a chance to win a prize and includes but is not limited to weekly 
(or other, longer time period) winner games, instant winner games, 
daily numbers games, and sports pool games, except games prohib- 
ited by Title 23, chapter 5, part 1; lotteries prohibited by Title 23, 
chapter 5. part 2; card games regulated by Title 23, chapter 5, part 
3; raffles and bingo games governed by Title 23, chapter 5, part 4; 
and sports pools governed by Title 23, chapter 5, part 5. 

Section 4. State lottery commission — allocation — composition 
— compensation — quorum. { I ) There is a state lottery commis- 
sion. 

(2) The commission consists of five members, who shall reside in 
Montana, appointed by the governor. 

(3) At least one commissioner must have 5 years of experience as 
a law enforcement officer. At least one commissioner must be an 
attorney admitted to the practice of law in Montana. At least one 
commissioner must be a certified public accountant licensed in 
Montana. 

(4) After initial appointments, each commissioner shall be ap- 
pointed to a 4-year term of office, and the terms shall be staggered. 

(5) A commissioner may be removed by the governor for good 
cause. An office that for any reason becomes vacant must be filled 
within 30 days by the governor, and the commissioner filling the 
vacancy shall serve for the rest of the unexpired term. 

(6) The commission shall elect one of its members as chairman. 

(7) Three or more commissioners constitute a quorum to do 
business, and action may be taken by a majority of a quorum. 

(8) Commissioners are entitled to compensation, to be paid out 
of the state lottery fund, at the rate of $50 for each day in which they 
are engaged in the performance of their duties and are entitled to 



travel, meals, and lodging expenses, to be paid out of the state lot- 
tery fund, as provided for in Title 2, chapter 1 8, part 5. 

(9) The commission is allocated to the department of commerce 
for administrative purposes only as prescribed in 2- 1 5- 1 2 1 . 

Section 5. Powers and duties of commission. The commission 
shall: 

( 1 ) establish and operate a state lottery and may not become in- 
volved in any other gambling or gaming; 

(2) determine policies for the operation of the state lottery, su- 
pervise the director and his staff, and meet with the director at least 
once every 3 months to make and consider recommendations, set 
policies, determine types and forms of lottery games to be operated 
by the state lottery, and transact other necessary business; 

(3) determine the price of each ticket or chance and the number 
and size of prizes; 

(4) provide for the conduct of drawings of winners of lottery 
games: 

(5) carry out, with the director, a continuing study of the state 
lotteries of Montana and other states to make the state lottery more 
efficient, profitable, and secure from violations of the law; 

(6) study the possibility of working with other lottery states to 
offer regional lottery games; 

(7) prepare quarterly and annual reports on all aspects of the op- 
eration of the state lottery, including but not limited to types of 
games, gross revenue, prize money paid, operating expenses, net 
revenue to the state, contracts with gaming suppliers, and recom- 
mendations for changes to [sections 1 through 20], and deliver a 
copy of each report to the governor, the department of administra- 
tion, the legislative auditor, the president of the senate, the speaker 
of the house of representatives, and each member of the appropri- 
ate committee of each house of the legislature as determined by the 
president of the senate and the speaker of the house; and 

(8) adopt rules necessary to carry out [sections 1 through 20], 
Section 6. Director — appointment — compensation — qualifi- 
cations. ( I ) The director must be appointed by the governor and 
shall hold office at the pleasure of the governor. 

(2) The director must be qualified by training and experience to 
direct the state lottery. He must be a full-time employee and may 
not engage in any other occupation. 

(3) The director's salary is equal to 90% of the salary of the direc- 
tor of the department of commerce. 

Section 7. Powers and duties of director. ( 1 ) The director shall: 

(a) administer the operation of the state lottery in accordance 
with [sections I through 20] and the rules and other directives of 
the commission; 

(b) appoint an assistant director for security and employ and di- 
rect personnel necessary to the operation of the state lottery; 

(c) license lottery ticket or chance sales agents and suspend or 
revoke licenses pursuant to [sections 1 through 20] and commis- 
sion rules; and 

(d) maintain, with the assistant director for security, the security 
of the state lottery. 

(2) With the concurrence of the commission or pursuant to com- 
mission rules, the director may enter into contracts for materials, 
equipment, and supplies to be used in the operation of the state lot- 
tery, for the design and installation of games, for consultant serv- 
ices, and for promotion of the lottery. All contracts must be made 
in accordance with state law. No contract is legal or enforceable 
that provides for the management of the state lottery or for the en- 
tire operation of its games by any private person or firm. When a 
contract is awarded, a performance bond satisfactory to the com- 
mission and executed by a surety company authorized to do busi- 
ness in this state or otherwise secured in a manner satisfactory to 
the commission, in an amount equal to the price of the contract, 
must be delivered to the commission. 

Section 8. .Assistant director for security — qualifications — du- 
ties. ( 1 ) The director shall appoint an assistant director for security. 

(2) The assistant director for security must be qualified by train- 
ing and experience, have at least 5 years of law enforcement experi- 
ence, and be knowledgeable and experienced in computer security. 



17 



(3) The assistant director for security shall: 

(a) be responsible for a security division to assure security, hon- 
esty, fairness, and integrity in the operation and administration of 
the lottery, includingbut not limited to an examination of the back- 
ground of all prospective employees, ticket or chance sales agents, 
lottery vendors, and lottery contractors. The security division is 
designated a law enforcement agency for the purpose of adminis- 
tering [sections 1 through 20]. 

(b) in conjunction with the director, confer with the attorney 
general or his designee to promote and ensure security, honesty, 
fairness, and integrity of the operation and administration of the 
lottery; and 

(c) in conjunction with the director, report any alleged violation 
of law to the attorney general, the legislative auditor, and any other 
appropriate law enforcement authority for further investigation 
and action. 

Section 9. Ticket or chance sales agents — licenses. (1) Lottery 
tickets or chances may be sold only by ticket or chance sales agents 
licensed by the director in accordance with this section. 

(2) The commission shall by rule determine the places at which 
state lottery game tickets or chances may be sold. 

(3) (a) Before issuing a license, the director shall consider: 

(i) the financial responsibility and security of the appli- 
cant and his business or activity; 

(ii) the accessibility of his place of business or activity to 
the public; and 

(iii) the sufficiency of existing licenses to serve the public 
convenience and the volume of the expected sales. 

(b) No person under 1 8 years of age may sell lottery tickets or 
chances. 

(c) A license as an agent to sell lottery tickets or chances may not 
be issued to any person to engage in business exclusively as a lottery 
ticket or chance sales agent. 

(4) The director may issue temporary licenses upon conditions 
he considers necessary. 

(5) License applicants shall pay a $50 fee to cover the cost of in- 
vestigating and processing the application. 

(6) The director may require a bond from any licensed agent in 
an amount provided in the commission's rules and may purchase a 
blanket bond covering the activities of licensed agents. 

(7) A licensed agent shall display his license or a copy thereof 
conspicuously in accordance with the commission's rules. 

(8) A license is not assignable or transferable. 

(9) No employee of a ticket or chance sales agent may be required 
to sell lottery game tickets or chances if the sale is against his reli- 
gious or moral beliefs. 

(10) Sales agents are entitled to no more than a 5% commission 
on tickets and chances sold. 

(11) Each sales agent shall keep a complete and up-to-date set of 
records and accounts fully showing his sales and provide it for in- 
spection upon request of the commission, the director, the depart- 
ment of commerce, the office of the legislative auditor, or the office 
of the attorney general. 

(12) Sales agents may pay the state lottery only by check, 
bankdraft, electronic fund transfer, or other recorded, noncash, fi- 
nancial transfer method as determined by the director. 

( 1 3) A license may be suspended or revoked for failure to main- 
tain the license qualifications provided in subsection (3) or for vio- 
lation of any provision of [sections I through 20] or a commission 
rule. Prior to suspension or revocation, the licensee must be given 
notice and an opportunity for a hearing. 

Section 10. Sales restrictions. (1) The price of each lottery game 
ticket or chance must be clearly stated thereon. The price of a lot- 
tery game chance vended by a machine or electronic device must be 
clearly stated on the machine or device. 

(2) Tickets and chances may not be sold to or purchased by per- 
sons under 1 8 years of age. 

(3) Tickets and chances must be paid for in cash. 

(4) Tickets and chances may not be sold to or purchased by com- 
missioners, the director, his staff, gaming suppliers doing business 
with the stale lottery, suppliers' officers and employees, employees 



of any firm or governmental agency auditing or investigating the 
state lottery, or members of their families living with them. 

( 5 ) The names of elected officials may not appear on any ticket or 
chance. 

Section 11. Disclosure of odds. The director shall make adequate 
disclosure of the odds with respect to each state lottery game by 
stating the odds in lottery game advertisements and by posting the 
odds at each place in which tickets or chances are sold. 

Section 12. State lottery fund. There is a fund of the enterprise 
fund type, as defined in 1 7-2-102, to be known as the state lottery 
fund. The gross revenue from the state lottery, consisting of money 
from the sale of lottery tickets and chances, ticket or chance sales 
agent license fees, unclaimed prizes, or any other source, must be 
deposited in the fund, except that, at the discretion of the director, 
money for prizes paid immediately by a sales agent and money 
equaling the sales agent's commission may be drawn by a sales 
agent from his gross revenue before depositing his gross revenue 
with the state lottery. 

Section 13. Disposition of revenue. ( 1 ) As near as possible to 45% 
of the money paid for tickets or chances in each separate state lot- 
tery game must be paid out as prize money for the game. 

(2) Up to 1 5% of the gross revenue from the state lottery may be 
used by the director to pay the operating expenses of the state lot- 
tery. Commissions paid to lottery ticket or chance sales agents are a 
state lottery operating expense. 

(3) That part of all gross revenue not used for the payment of 
prizes and operating expenses is net revenue and must be paid 
quarterly from the enterprise fund established by [section 1 2] to the 
superintendent of public instruction for distribution as equaliza- 
tion aid to the retirement funds required by 20-9-501 . [The net rev- 
enue is statutorily appropriated, as provided in [section 2 of House 
Bill 12].] The superintendent of public instruction shall establish 
the dollar amount per ANB by dividing the net lottery revenue for 
the school year by the total state ANB in the prior school year. He 
shall then notify each county superintendent by the fourth Monday 
of July of the total retirement fund equalization aid available to the 
county, as calculated separately for elementary and high school dis- 
tricts using the prior year's ANB and prorated as specified in 20-9- 
501(6) for any joint school district, and each county superintendent 
must use such amounts to reduce the total retirement fund levy re- 
quirement for elementary school districts and the total retirement 
fund levy requirement for high school districts. The superintendent 
of public instruction shall then distribute by state warrant the total 
amount of retirement fund equalization aid for each county by Oc- 
tober I of the school fiscal year. 

Section 14. Felony and gambling-related convictions — ineligi- 
bility for lottery positions. No person who has been convicted of a 
felony or a gambling-related otTensc under federal law or the law of 
any state may be a commissioner, director, assistant director, em- 
ployee of the state lottery, or licensed ticket or chance sales agent. 
Prior to appointment to any such position, a person shall submit to 
the commission a full set of fingerprints made at a law enforcement 
agency by an agent or officer of such agency on forms supplied by 
the agency. 

Section 15. Confiict of interest. No commissioner, director, as- 
sistant director, state lottery employee, licensed ticket or chance 
sales agent, or member of his family living with him may have a 
financial interest in any gaming supplier or any contract between 
the state lottery and a gaming supplier or accept any gift or thing of 
value from a gaming supplier. 

Section 16. Drawings for and payment of prizes — unclaimed 
prizes. ( I ) All drawings must be held in public. The selection of win- 
ning tickets may not be performed by an employee of the lottery or 
by a member of the commission. All drawings must be witnessed by 
a professional staff employee of the legislative auditor's office, and 
all lottery drawing equipment used in public drawings to select win- 
ning prizes or participants for prizes must be examined by the di- 
rector's staff and a professional staff employee of the legislative au- 
ditor's office prior to and after each public drawing. 

(2) The commission may provide for the immediate payment of 
prizes bv the ticket or chance sales agent who sold the winning 



18 



ticket or chance whenever the amount of the prize is less than an 
amount set by commission rule. Payment may not be made directly 
by a machine or device or by a computer terminal. 

(3) Prizes over $ 1 00,000 may in the discretion of the commission 
be paid either in one lump sum or in equal yearly installments with- 
out interest over a period of not more than 10 years, except that 
each installment payment must be at least $20,000. 

(4) Prizes not claimed within 6 months are forfeited and must be 
paid into the state lottery fund. No interest is due on a prize when a 
claim is delayed but made within 6 months. 

(5) The right to a prize is not assignable, but prizes may be paid to 
a deceased winner's estate or to a person designated by judicial or- 
der. 

Section 17. Disclosures by gaming suppliers. (1) Any person, 
firm, association, or corporation that submits a bid or proposal for 
a contract to supply lottery equipment, tickets, or other material or 
consultant services for use in the operation of the state lottery shall 
disclose at the time of such bid or proposal: 

(a) the supplier's business name and address and the names and 
addresses of the following: 

(i) if the supplier is a partnership, all of the general and lim- 
ited partners; 

(ii) if the supplier is a trust, the trustee and all persons enti- 
tled to receive income or benefit from the trust; 

(iii) if the supplier is an association, the members, officers, 
and directors; 

(iv) if the supplier is a corporation, the officers, directors, 
and each owner or holder, directly or indirectly, of any equity secu- 
rity or other evidence of ownership of any interest in the corpora- 
tion; except that, in the case of owners or holders of publicly held 
equity securities of a publicly traded corporation, only the names 
and addresses of those owning or holding 5% or more of the pub- 
licly held securities must be disclosed; 

(v) if the supplier is a subsidiary company, each intermediary 
company, holding company, or parent company involved there- 
with and the officers, directors, and stockholders of each; except 
that, in the case of owners or holders of publicly held securities of 
an intermediary company, holding company, or parent company 
which is a publicly traded corporation, only the names and ad- 
dresses of those owning or holding 5% or more of the publicly held 
securities must be disclosed; 

(b) if the supplier is a corporation, all the states in which the sup- 
plier is authorized to do business and the nature of that business; 

(c) other jurisdictions in which the supplier has contracts to sup- 
ply gaming materials, equipment, or consultant services; 

(d) the details of any conviction, state or federal, of the supplier 
or any person whose name and address are required by subsection 
(l)(a) of a criminal offense punishable by imprisonment for more 
than 1 year and shall submit to the commission a full set of finger- 
prints of such person made at a law enforcement agency by an agent 
or officer of such agency on forms supplied by the agency; 

(e) the details of any disciplinary action taken by any state 
against the supplier or any person whose name and address are re- 
quired by subsection (l)(a) regarding any matter related to gaming 
consultant services or the selling, leasing, offering for sale or lease, 
buying, or servicing of gaming materials or equipment; 

(0 audited annual financial statements for the preceding 5 years; 

(g) a statement of the gross receipts realized in the preceding year 
from gaming consultant services and the sale, lease, or distribution 
of gaming materials or equipment to states operating lotteries and 
to private persons licensed to conduct gambling, differentiating 
that portion of the gross receipts attributable to transactions with 
states operating lotteries from that portion of the gross receipts at- 
tributable to transactions with private persons licensed to conduct 
gambling; 

(h) the name and address of any source of gaming materials or 
equipment for the supplier; 

(i) the number of years the supplier has been in the business of 
supplying gaming consuhant services or gaming materials or equip- 
ment; and 



(j) any other information, accompanied by any documents the 
commission by rule may reasonably require as being necessary or 
appropriate in the public interest to accomplish the purposes of 
[sections 1 through 20]. 

(2) No person, firm, association, or corporation contracting to 
supply gaming equipment or materials or consultant services to the 
state for use in the operation of the stale lottery may have any finan- 
cial interest or connection with any person, firm, association, or 
corporation licensed as a ticket or chance sales agent. 

(3) No contract for supplying consultant services or gaming ma- 
terials or equipment for use in the operation of the state lottery is 
enforceable against the state unless the requirements of this section 
have been fulfilled. 

Section 18. Annual audit. The legislative auditor shall conduct 
an annual audit of the state lottery. The costs of the audit must be 
paid out of the state lottery fund. A copy of the audit report must be 
delivered to the commission, the director, the governor, the presi- 
dent of the senate, the speaker of the house of representatives, and 
each member of the appropriate committee of each house of the 
legislature as determined by the president of the senate and the 
speaker of the house. 

Section 19. Audit of lottery security. (1) After the first 9 months 
of sales to the public and every 2 years after that, the office of the 
legislative auditor shall conduct or have conducted a comprehen- 
sive audit of all aspects of security in the operation of the lottery. 
The costs of the audit are a state lottery operating expense and must 
be paid out of the state lottery fund. The audit must include: 

(a) personnel security; 

(b) lottery sales agent security; 

(c) lottery contractor security; 

(d) security of manufacturing operations of lottery contractors; 

(e) security against ticket or chance counterfeiting and alteration 
and other means of fraudulently winning; 

(0 security of drawings among entries or finalists; 

(g) computer security; 

(h) data communications security; 

(i) database security; 

(j) systems security; 

(k) lottery premises and warehouse security; 

(1) security in distribution; 

(m) security involving validation and payment procedures; 
(n) security involving unclaimed prizes; 

(0) security aspects applicable to each particular lottery game; 
(p) security of drawings in games whenever winners are deter- 
mined by drawings; 

(q) the completeness of security against locating winners in lot- 
tery games with preprinted winners by persons involved in their 
production, storage, distribution, administration, or sales; and 

(r) any other aspects of security applicable to any particular lot- 
tery game and to the lottery and its operations. 

(2) The security audit report must be presented to the commis- 
sion, the director, the governor, the president of the senate, and the 
speaker of the house of representatives. 

Section 20. Penalties. It is a misdemeanor, punishable by a fine 
not to exceed $500 or imprisonment in the county jail for a term 
not to exceed 6 months, or both, to knowingly or purposely: 

( 1 ) require an employee to sell lottery tickets or chances in viola- 
tion of [section 9(9)1; 

(2) violate [section 9(11)]; 

(3) sell a lottery ticket or chance to a person under 1 8 years of age; 

(4) violate [subsection (3) or (4) of section 10]; 

(5) serve as a commissioner, director, assistant director, em- 
ployee, or licensed agent of the state lottery in violation of [section 
14]; 

(6) violate [section 1 5]; 

(7) violate [section 1 7]; or 

(8) influence the winning of a prize through the use of coercion, 
fraud, deception, or tampering with lottery equipment or materi- 
als. 



19 



Section 21. Section 23-5-202, MCA, is amended to read: 

"23-5-202. Application. This part shall not apply to the provi- 
sions of part 4 of this chapter, to [sections 1 through 20]. or to the 
gi ving away of cash or merchandise attendance prizes or premiums 
by public drawings at agricultural fairs or rodeo associations in this 
state, and the county fair commissioners of agricultural fairs or ro- 
deo associations in this state may give away at such fairs cash or 
merchandise attendance prizes or premiums by public drawings." 

Section 22. Initial appointment and terms of commissioners. Ini- 
tial appointments to the commission must be made within 30 days 
after [the effective date of sections 1 through 25]. Two of the initial 
appointees shall serve for 2 years, two shall serve for 3 years, and 
one shall serve for 4 years. 

Section 23. Initial duties of commission — lottery study — first 
game. ( I ) The commission shall immediately conduct an initial 
study of other state lotteries. 

(2) The commission shall begin the operation of state lottery 
games at the earliest practicable time and in any event no later than 
July 1, 1*J87. 

Section 24. Temporary state treasury line of credit for expense of 
starting slate lottery . There is a temporary line of credit that may be 
drawn by the director of the state lottery from the state general fund 
and deposited in the state lottery fund, in the amount of 
$ 1 ,500,000. This temporary line of credit may be drawn upon only 
during the first 12 months after the effective date of [sections 1 
through 20) and only for the purpose of financing the initial ex- 
penses of starting the state lottery. The director may draw upon all 
or part of this temporary line of credit. Any funds advanced under 
the temporary line of credit must be repaid out of the lottery's net 
revenue to the general fund within I year ofthe advance, and no net 
revenue may be paid out under [section 13(3)] until all advanced 
funds are repaid. Interest must be paid at an annual simple interest 
rate of 1 0% on funds advanced, commencing on the day funds are 
advanced and until the funds are repaid. 

Section 25. Severability. If a part of this act is invalid, all valid 
parts that are severable from the invalid part remain in effect. If a 
pari of this act is invalid in oneor more of its applications, the part 
remains in effect in all valid applications that are severable from 
the invalid applications. 

Section 26. Effective date. ( 1 ) If approved by the electorate, sec- 
tions 1 through 25 ofthis act are effective January 1, 1987. 

(2) This section and section 27 are effective on passage. 

Section 27. Submission to electorate. The question whether sec- 
lions I through 25 ofthis act will become effective shall be submit- 
ted lo the electors ofthe State of Montana at the general election to 
be held in November 1 986 by printing on the ballot the full title of 
this act and the following: 

FOR establishing a state lottery. 
AGAINST establishing a state lottery. 




Complete Text of 
INITIATIVE NO. 



104 



BE IT ENACTED BY THE PEOPLE OF THE STATE OF 
MONTANA: 

New Section. Section 1 . Short title. [Sections 1 through 4] may be 
cited as "The Milk Price Decontrol Act of 1986". 

New Section. Section 2. Definitions. (1) Unless the context re- 
quires otherwise, in [sections 1 through 4] the following definitions 
apply: 

(a) "Board" means the board of milk control provided for in 2- 
15-1802. 

(b) "Class I milk" includes all bottled or packaged milk, low fat, 
buttermilk, chocolate milk, whipping cream, commercial cream, 
half-and-half, skim milk, fortified skim milk, skim milk flavored 
drinks, and any other fluid milk not specifically classified in this 



section or by the department under subsection (2) ofthis section, 
whether raw, pasteurized, homogenized, sterile, or aseptic. 

(c) "Class II milk" includes milk used in the manufacture of ice 
cream and ice cream mix, ice milk, sherbet, eggnog, sour cream, 
cottage cheese, condensed milk, and powdered skim for human 
consumption. 

(d) "Class III milk" includes milk used in the manufacture of 
butter, Cheddar cheese, process cheese, livestock feed, powdered 
skim other than for human consumption, and skim milk dumped. 

(e) "Consumer" means a person or agency, other than a dealer, 
purchasing milk for consumption or use. 

(0 "Cooperative association" means an organization of dairy 
farmers incorporated as a cooperative association under the laws of 
the State of Montana or any other state and owned collectively by 
its member producers for whom it markets milk. 

(g) "Dealer" means a distributor or producer-distributor. 

(h) "Department" means the department of commerce provided 
for in 2-15-1801. 

(i) "Distributor" means a person purchasing milk from any 
source, either in bulk or in packages, and distributing it for con- 
sumption in this state. 

(j) "Licensee" means a person who holds a license from the de- 
partment. 

(k) "Market" means an area ofthe state designated by the depart- 
ment as a natural marketing area. 

(1) "Milk" means the lacteal secretion of a dairy animal including 
raw and cooled secretions, whether pasteurized, standardized, ho- 
mogenzied, recombined, concentrated fresh, or otherwise proc- 
essed, that is designated as grade A by a duly constituted health au- 
thority, and also includes secretions in any manner rendered sterile 
or aseptic, whether or not they are regulated by any health authority 
ofthis or any other slate or nation. 

(m) "Person" means a person, firm, corporation, or cooperative 
association. 

(n) "Producer" means a person who produces milk for consump- 
tion in this state and sells it to a distributor. 

(o) "Producer-distributor" means a person producing and dis- 
tributing milk for consumption in this state. 

(p) "Producer prices" means prices at which milk owned by a 
producer is sold in bulk to a distributor. 

(2) The department may assign new milk products, not expressly 
included in one of the classes defined in this section, to the class 
which in its discretion it determines to be proper. 

New Section. Section 3. Policy. ( 1 ) The people declare that: 

(a) milk is a necessary article of food for human consumption; 

(b) the production and maintenance of an adequate supply of 
heathful milk of proper chemical and physical content, free from 
contamination, is vital to the public health and welfare; 

(c) the production of milk in the state of Montana is an industry 
affecting the public health and interest; 

(d) health regulations alone are insufficient to prevent distur- 
bances in the milk industry and to safeguard the consuming public 
from inadequacy of a supply ofthis necessary commodity; 

(e) it is the policy ofthis state to promote, foster, and encourage 
the intelligent production and orderly marketing of milk and 
cream, to eliminate speculation and waste, and to make the distri- 
bution between the producer and consumer as direct as can be effi- 
ciently and economically done; 

(f) investigations have revealed and experience has shown that 
due to the nature of milk, the conditions surrounding the produc- 
tion and marketingof milk, and the vital importanceof milk to the 
health and well-being of the citizens ofthis state, it is necessary to 
invoke the police powers ofthe state to provide constant supervi- 
sion and regulation ofthe milk industry ofthe state at the producer 
level to prevent the occurrence and recurrence of unfair trade prac- 
tices within the industry at the producer level; 

(g) milk is a perishable commodity which is easily contaminated 
with harmful bacteria, cannot be stored for any great length of time, 
and must be produced and distributed fresh daily, and that al- 
though the supply of milk cannot be regulated from day to day, due 



20 



to natural and seasonal conditions, milk must be produced on a 
constantly uniform and even basis: 

(h) the demand for milk fluctuates from day to day making it nec- 
essary that producers and distributors produce and have on hand a 
surplus of milk so that the consuming public has an adequate sup- 
ply at all times, and that the surplus must of necessity be converted 
into b> -products of milk; 

(i) a milk surplus, though necessary and unavoidable, tends to 
undermine and destroy the milk industry unless the surplus is regu- 
lated; 

(j) due to the perishable nature of milk and the conditions sur- 
rounding its production and marketing, unless the producers can 
recover the cost of production, the supply and quality of milk are 
affected against the best interests of the citizens of this state, whose 
health and well-being are vitally affected; and 

(k) due to the nature of milk and the conditions surrounding its 
production, the law of supply and demand is inadequate to protect 
the producer in this and other states, and in the public interest it is 
necessary to provide state supervision and regulation of the prices 
paid to milk producers in this state. 

(2) The general purposes of [sections I through 4] is to protect 
and promote the public welfare and eliminate unfair trade prac- 
tices in the milk industry at the producer level. 

New Section. Section 4. Establishment of minimum prices. (1) 
The board shall fix minimum producer prices for class I, class II, 
and class III milk by adopting rules in a manner prescribed by the 
Montana Administrative Procedure Act. 

(2) The board shall establish prices by means of flexible formulas 
that bring about such automatic changes in producer prices as are 
justified on the basis of changes in production costs and supply and 
demand conditions. 

(3) The board shall consider the costs of production and prices in 
neighboring areas and states to achieve minimum prices that are 
fair, equitable, and in the public interest. 

(4) The board shall, when publishing notice of proposed rule- 
making under authority of this section, set forth the specific factors 
that will be taken into consideration in establishing the formulas 
and in determining the actual costs of production and state the 
studies and investigations of its auditors and accountants that will 
be shown at the hearing, so that all interested parties will have an 
opportunity to question or rebut them as a matter of record. 

(5) The specific factors may include, but are not limited to: 

(a) current and prospective supplies of milk in relation to current 
and prospective demands for milk for all purposes; 

(b) the cost factors in producing milk, which include among 
other things the prices paid by farmers generally, as used in parity 
calculations of the United States Department of Agriculture, prices 
paid by farmers for dairy feed, and farm wage rates in this state; 

(c) the alternative opportunities, both farm and nonfarm, open 
to milk producers, prices received by farmers for all products other 
than milk, prices received by farmers for beef cattle, and the per- 
centage of unemployment in the state and nation as determined by 
appropriate state and federal agencies; and 

(d) the prices of butter, nonfat dry milk, and cheese. 

(6) If the board proposes to base a rule establishing or revising 
any milk pricing formulas upon facts within its own knowledge, as 
distinguished from evidence which may be presented to it by the 
consuming public or the milk industry, the board shall include in 
the notice of proposed rulemaking the specific facts within its own 
knowledge which it will consider, so that all interested parties will 
have an opportunity to question or rebut those facts as a matter of 
record. 

( 7 ) After consideration of the evidence produced, the board shall 
make written findings and conclusions and fix by rule the formula 
that will be used to compute minimum producer prices for milk in 
classes 1, II, and III. 

(8) Each rule establishing or revising a milk pricing formula shall 
classify milk by forms, classes, grades, or uses the board considers 
ad\ isable and specify the minimum producer price for each. 

(9) The board shall adopt rules after notice and hearing in the 
manner prescribed by the Montana Administrative Procedure Act 



to regulate transportation rates which distributors, contract haul- 
ers, haulers, and others charge producers for farm-to-plant and, if 
necessary, interplant transportation of bulk milk. 

{ 1 0) All bulk milk purchased by a distributor must be purchased 
on a uniform basis established by the board after the producers and 
distributors have been consulted. 

(11) Upon petition by a cooperative association or ten percent of 
the affected producers, the board shall hold a hearing to receive and 
consider evidence regarding the advisability and need for a base or 
quota plan as a method of payment by a distributor or by all distrib- 
utors under any pooling plan of producer prices. 

(12) Upon petition of a cooperative association or ten percent of 
the affected producers, the board shall hold a hearing to receive and 
consider evidence regarding the advisability and need for a 
marketwide or statewide pooling arrangement as a method of pay- 
ment of producer prices. The board shall receive and consider evi- 
dence concerning production and marketing practices that have 
historically prevailed statewide. If the board finds that the evidence 
warrants the establishment of a marketwide or statewide pooling 
arrangement, the board shall establish one by rule, but the rule is 
not effective until it is approved by at least half of the producers 
voting individually or through their cooperative association in a 
referendum of the affected producers conducted by the board. 

(13) The requirements for notices of hearings on the establish- 
ment of milk pricing formulas apply to hearings regarding base or 
quota plans or marketwide or statewide pooling arrangements. 

(14) Rules adopted under this section shall be enforced by the 
department. 

Section 5. Section 81-23-103, MCA, is amended to read: 
"81-23-103. General powers of the department. (I) the depart- 
ment shall superv'ise, regulate, and control the milk industry of this 
state, including the production, processing, storage, distribution, 
and snle utilization, and purchase of milk sold for consumption 
only as it pertains to the producers in this state. Nothing in thi s 
chapter abrogates or affects the status, force, or operation of any 
provision of public health laws or the law under which the depart - 
ment of livestock is constituted together with the department of 
livestock rules, county board of health rules, or municipal ordi 
nances for the promotion or protection of the public health. The 
department may cooperate with the department of health and envi- 
ronmental sciences, the board of livestock, any county or city board 
of health, or the department of agriculture in enforcing this chap- 
ter. 

(2) The department shall investigate all matters pertaining to the j 
production, processing, storage, distribution, and sale utilization i 
and purchase of milk onlv as thev relate to the producers of milk in 
this state and conduct hearings upon any subject pertinent to the 
administration of this chapter. The department may subpoena 
milk dealers, their records, books, and accounts, and any other per- 
son from whom information may be desired or considered neces- 
sary to carry out the purposes and intent of this chapter and may 
take depositions of witnesses who are sick or absent from the state 
or who cannot otherwise appear in person before the department at 
its offices. The department shall give at least 10 days' notice to the 
proposed witness. The department may not regulate or cont rol any 
prices other than pr oducer prices." 

Section 6. Section 81-23-105, MCA, is amended to read: 
"81-23-105. Testingof milk. (I) For the purpose of determining 
the value of milk supplied by producers during routine audits of 
milk processing plants which receive raw milk directly from pro- 
ducers, the department of commerce shall establish a program of 
testing such raw milk. 

(2) The department of commerce may levy an assessment on li- 
censed producers to secure the necessary funds to administer this 
program. This assessment is in addition to those provided in 81-23- 
202. 

(3) All personnel employed in the sampling and testing program 
shaH must be licensed by the animal health division of the depart- 
ment of livestock. 



21 



(4) The department of comme r ce may shall conduct all types of 
sampling, grading, and testing techniques which it considers neces- 
sary to carry out the intent of this section." 

Section 7. Section 81-23-201, MCA, is amended to read: 
"81-23-201. Licenses to producers, producer-distributors, and 
distributors, and jobbers. In any market where the provisions of 
this chapter apply, it is unlawful for a producer, producer- 
distributor, or distributor, o r jobbc r to produce, transport, process, 
store, handle, d i stribute, oi buy o r sell milk unless the dealer is 
properly licensed as provided by this chapter. It is unlawful for a 
person to buy, seth handle, or process, o r distribute milk which he 
knows or has reason to believe has been previously dealt with or 
handled in violation of any provision of this chapter. The depart- 
ment may decline to grant a license or may suspend or revoke a 
license already granted, upon due cause and after hearings." 

Section 8. Section 81-23-202. MCA, is amended to read: 
"81-23-202. Licenses — disposition of income. (1) A producer, 
producer-distributor, or distributor, o r jobbe r may not engage in 
the business of producing or selling milk subject to this chapter in 
this state without first having obtained a license from the depart- 
ment of livestock or, in the case of milk entering this state from an- 
other state or a foreign nation, without complying with the require- 
ments of the Montana Food, Drug and Cosmetic .Act and without 
being licensed under this chapter by the department. The annual 
fee for the license from the department is $2 and is due before July 
1 and shall be deposited by the department to the credit of the gen- 
eral fund. The license required by this chapter is in addition to any 
other license required by state law or any municipality of this state. 
Th i s chapter shall apply to every part of the state of Montana. 

(2) In addition to the annual license fee, the department shall, in 
each year, before April 1, for the purpose of securing funds to ad- 
minister and enforce this chapter, levy an assessment upon pro- 
ducers, producer - distributors, and distributors as follows: 

(a) a fee per hundredwe i ght on the total volume of all milk sub - 
j e ct to th i s chapter produced and sold by a produccr - distr i butor; 

(bXaJ a fee per hundredweight on the total volume of all milk 
subject to this chapter seH marketed by a producer, 

feKtl) a fee per hundredweight on the total volume of all milk 
subject to this chapter seM received by a distributor, excepting that 
which is sotd marketed to another distributor. 

(3) The department shall adopt rules fixing the amount of each 
fee. The amounts may not exceed levels sufficient to provide for the 
administration of this chapter. The fee a s sessed on a producer or on 
a distributor may not be more than one half the fee assessed on a 
producer - d i stributo r . 

(4) The asessment upon p roduce r- dist r ibuto r s, producers; and 
distributors shall be paid quarterly before January 15, April 15, 
July 1 5. and October 1 5 of each year. The amount of the assessment 
shall be computed by applying the fee designated by the depart- 
ment to the volume of milk soW received from producers in the 
preceding calendar quarter. 

(5) Failure of a producer, p r oducer - distributor, or distributor to 
pay an assessment when due is a violation of this chapter and his 
license under this chapter automatically terminates and is void. A 
license so terminated shall be reinstated by the department upon 
payment of a delinquency fee equal to 30% of the assessment which 
was due. 

(6) .All assessments required by this chapter shall be deposited by 
the department in the state special revenue fund. All costs of ad- 
ministering this chapter, including the salaries of employees and 
assistants, per diem and expenses of board members, and all other 
disbursements necessary to carr>- out the purpose of this chapter, 
shall be paid out of control board moneys in that fund. 

(7) The department may. if i t finds the costs of adm i nistering and 
enforc i ng th i s chapter can be derived from lower rates, amend its 
rules to fix the rates at a less amount on or befo r e . ' ^pril 1 in any 
year: The departm en t shall revi e w h s rates each year, and if it finds 
that the cost of administering and enforcing this chapter can be de- 
rived from lower rates, amend its rules within 6 months to fix the 
rates at a lesser amount. " 



Section 9. Section 81-23-203. MCA. is amended to read: 
"8 1-23-203. .■Application for licenses. An applicant for license to 
operate as a producer, producer-distributor, or distributor, o r job - 
ber shall file a signed application upon a blank prepared under the 
authority of the department, and an appl i cant shall state include 
facts concerning his circumstances and the nature of the business to 
be conducted which in the opinion of the department are necessary 
for the administration of this chapter. The application shall certify 
the applicant to be the holder of all licenses required by the depart- 
ment of livestock for the conduct of his business or. in the case of 
milk entering this state from another state or a foreign nation, to be 
in compliance with the requirements of the Montana Food. Drug, 
and Cosmetic .Act. The application shall be accompanied by the li- 
cense fee required to be paid." 

Section 10. Section 8 1 -23-402. MCA, is amended to read: 

"8 1-23-402. Reports of dealers — accounting system — records. 
( 1 ) The department may require licensees to file with it reports at 
reasonable or regular times which the department may r equ ir e, 
showing the licensee's production, sale, or distribution of milk and 
any other information considered necessar>' by the department 
necessary which pertains to the production, sale, or distribution of 
milk, either under oath or otherwise, as the department may di r ect- 
Failure or refusal to file a report when di r ected to do s o i s g r ounds 
for the revocat i on of the license and i s a vio l ation for which the li - 
cen s ee may be fined as p r ovided by th i s chapter, one or both, at the 
discretion of the department. 

(2) The department shall adopt a uniform system of accounting 
to be used by the distributor to account for the usage of all milk 
received by the distributor. 

(3) A distributor and a producer-distributor shall keep: 

(a) a record of all milk, cream, or dairy products received, de- 
tailed as to location, names and addresses of suppliers, prices paid, 
deductions or charges made, and the use to which the milk or cream 
was put; 

(h)a record of the quantity of each kind of milk or dairy product 
manufactured and the quantity and pr i ce of m il k or dairy products 
Qxsold: 

(c) a complete record of all milk, cream, or dairy products sold, 
classified as to kind and grade, showing where sold , and the amount 
received in payment ; 

(d) a record of the wastage or loss of milk or dairy products; and 

(e) a record of the i tems of handl i ng expense : 

(0 a record of all refrigeration facilit i es sold for sto r age purposes 
to any per s on, s how i ng types, s i zes, and locat i on of the fac ili t i e s 
and the origina l o r dupl i cate origina l of all agreements covering 
sales for them: 

(fXeJ other records whteh the department considers necessary 
for the proper enforcement of this chapter." 

Section 11. Section 81-23-405, MCA. is amended to read: 
"81-23-405. Violations made misdemeanors - penalties. (1) A 
person who knowingly or purposely produces, sells , di s tr i butes, o r 
hand l e s m i lk in anyway, for sale or buys milk from a producer, ex- 
cept as a consumer without a license from the department as re- 
quired by this chapter or who violates a lawful rule of the depart- 
ment or board is guilty of a misdemeanor punishable by a fine not 
exceeding $600. Each day's violation is a separate offense. 

(2) The district courts have original jurisdiction in all criminal 
actions for violations of this chapter and in all civil actions for the 
recover^' or enforcement of penalties provided for in this chapter. 
All of those act i ons, both criminal and civil, shall be t r ied i n the 
d i str i ct court. 

(3) The count> attorneys , i n their respect i ve count i es, shall dili- 
gently prosecute all violations of this chapter." 

New Section. Section 12. Repealer. Sections 81-23-101. 81-23- 
102. 81-23-106. and 81-23-302 through 81-23-305, MCA are re- 
pealed. 

New Section. Section 13. Codification. Sections 1 through 4 are 
intended to be codified as an integral part of Title 81. chapter 23. 
MCA. and the provisions of Title 81. chapter 23. MCA. apply to 
sections 1 through 4. 



22 



New Secfion. Section 14. Severability. If a part of this act is in- 
valid, all valid parts that are severable from the invalid part remain 
in effect. If a part of this act is invalid in one or more of its applica- 
tions, the part remains in effect in all valid applications that are 
severable from the invalid applications. 

New Section. Section 1 5. Extension of authority. Any existing au- 
thority of the Board of Milk Control, the Department of Com- 
merce, or the Department of Livestock to make rules on the subject 
of the provisions of this act is extended to the provisions of this act. 

New Section. Section 1 6. Effective date. This act is effective Jan- 
uary 1, 1987. 




Complete Text of 
INITIATIVE NO. 105 



BE IT ENACTED BY THE PEOPLE OF THE STATE OF 

MONTANA: 

Section 1. Declaration of policy. 

( 1 ) The State of Montana's reliance on the taxation of property to 
support education and local government has placed an unreasona- 
ble burden on the owners of classes three, four, six, nine, twelve, 
and fourteen property, as those classes are defined in Title 1 5, ch. 6, 
part 1. 

(2) The legislature's failure to give local governments and local 
school districts the flexibility to develop alternative sources of reve- 
nue will only lead to increases in the tax burden on the already over- 
burdened property taxpayer. 

(3) The legislature is the appropriate forum to make the difficult 
and complex decisions to develop: 

(a) a tax system that is fair to property taxpayers; and 

(b) a method of providing adequate funding for local govern- 
ment and education. 



(4) The legislature has failed in its responsibility to taxpayers, ed- 
ucation, and local government, to relieve the tax burden on prop- 
erty classes three, four, six, nine, twelve, and fourteen. 

(5) The people of the State of Montana declare it is the policy of 
the State of Montana that no further property tax increases be im- 
posed on property classes three, four, six, nine, twelve, and four- 
teen. 

Section 2. Property tax limited to 1986 levels. 

{ 1 ) Except as provided in subsections (2) and (3), the amount of 
taxes levied on property described in 1 5-6- 133,1 5-6- 134,1 5-6- 136, 
15-6-139, 15-6-142, and 15-6-144 may not, for any taxing jurisdic- 
tion, exceed the amount levied for taxable year 1986. 

(2) The limitation contained in subsection ( 1 ) does not apply to 
levies for rural improvement districts. Title 7, ch. 1 2, part 2 1 ; spe- 
cial improvement districts, Title 7, ch. 12, part 41; or bonded in- 
debtedness. 

(3) New construction or improvements to or deletions from 
property described in subsection (1) is subject to taxation at 1986 
levels. 

(4) As used in this section, the "amount of taxes levied" and the 
"amount levied" mean the actual dollar amount of taxes imposed 
on an individual piece of property, notwithstanding an increase or 
decrease in value due to inflation, reappraisal, adjustments in the 
percentage multiplier used to convert appraised value to taxable 
value, changes in the number of mills levied, or increase or decrease 
in the value of a mill. 

Section 3. Contingent effective date. 

( 1 ) Except as provided in subsection (2), this act is effective July 
1, 1987, and applies to taxable year 1987. 

(2) This act will not become effective if, prior to July 1, 1987, an 
act is passed and approved that: 

(a) states that it is being enacted in response to this initiative; 

(b) reduces property tax on a statewide basis on property de- 
scribed in 15-6-133, 15-6-134, 15-6-136, 15-6-139, 15-6-142, and 
15-6-144; and 

(c) establishes alternative revenue sources to replace revenue lost 
to local governments, school districts, the university system, and 
other property taxing jurisdictions as a result of the reduced prop- 
erty taxes. 



23 



JIM WALTERMIRE 

Secretary of State 
Montana State Capitol 
Helena, MT 59620 

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24 



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