House Bill No. 500
Introduced By keenan, raney, sprague, stang, harp, debruycker, grinde, swysgood, sliter, holland, clark, denny, mccann, keating, tash, jore, brainard, prouse, curtiss, adams, cole, depratu, mcnutt, m. hanson, ahner, mills, burnett, feland, mohl, wells, bitney, barnett, smith, bookout-reinicke, devlin, gage
A Bill for an Act entitled: "An Act prohibiting STATE government entities from competing with private enterprise;
providing definitions and exceptions; providing for restraint of STATE government entity actions in competition with
private enterprise unless specifically authorized by
statute LAW; PROVIDING FOR THE REVIEW OF COMPLAINTS
CONCERNING GOVERNMENT COMPETITION WITH PRIVATE ENTERPRISE; amending section
20-25-108, MCA; and providing
an immediate effective date DATES."
WHEREAS, the American system of private enterprise is the cornerstone of this nation's democratic form of government; and
WHEREAS, small business is a vital form of free enterprise in Montana, where it is common for a business to employ a small number of employees; and
WHEREAS, in some instances, state government entities provide services or sell products to the public or private sectors that compete with similar services or products offered by private enterprise; and
WHEREAS, in 1977, the Montana Legislature passed House Joint Resolution No. 55 expressing the policy of the State of Montana to foster and assist the business community to create favorable conditions for small businesses and House Joint Resolution No. 58 requiring state agencies to determine those agency services that could be vested with the private sector and report those services, along with a plan to implement legislative policy to promote the use of private resources; and
WHEREAS, the time has come for the state to take deliberate steps to prevent government entities from providing products or services that directly compete with products or services available from the private sector.
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Definitions. As used in [sections 1
and 2 THROUGH 3], the following definitions apply:
(1) "Private enterprise" means an individual, firm, partnership, joint venture, corporation, association, or other legal entity other than a state government entity, political subdivision, or special use district, engaged in the manufacture, sale, rental, leasing, delivery, dispensing, distributing, or advertising of goods or services for a profit.
(2) (a) "State government entity" means a department, division, bureau, office, commission, council, or board of state government and includes state institutions, community colleges, and the state university system.
(b) The term does not include:
(i) AN ENTITY ENGAGED IN the operation or management of state parks, historical sites, or trails;
(ii) industries located at state correctional facilities;
a function of the state department of justice; or
a function of the legislative or judicial branches BRANCH of state government.
NEW SECTION. Section 2. State competition with private enterprise prohibited -- action for restraint, costs, and
fees. (1) A state government entity may not directly or through another state government entity, political subdivision, or
special use district engage in the manufacturing, processing, sale, offering for sale, rental, leasing, delivery, dispensing,
distributing, or advertising of goods or services to the public that are also offered by private enterprise unless specifically
(2) A private enterprise against which a state government entity is competing in violation of this section may NOT bring a
civil action in accordance with Title 27, chapter 19, in
the A district court of the county in which the private enterprise is
located STATE OF MONTANA for restraint of the violation UNLESS THE COMPLAINT HAS BEEN PRESENTED TO
THE LEGISLATIVE AUDIT COMMITTEE AND THE COMMITTEE HAS RENDERED AN OPINION ON THE
MERITS OF THE COMPLAINT. A private enterprise that substantially prevails in an action brought pursuant to this
section may also recover its costs and reasonable attorney fees.
NEW SECTION. SECTION 3. POWERS -- DUTIES. (1) THE LEGISLATIVE AUDIT COMMITTEE SHALL SCHEDULE AND HOLD MEETINGS IN THE INTERIM BETWEEN LEGISLATIVE SESSIONS AS IT CONSIDERS NECESSARY TO DETERMINE THE EXTENT TO WHICH STATE GOVERNMENT ENTITIES ARE COMPETING WITH PRIVATE ENTERPRISE IN THE PROVISION OF GOODS AND SERVICES.
(2) THE COMMITTEE MAY DEVELOP AND ESTABLISH METHODS TO OBTAIN INFORMATION FROM BOTH PRIVATE AND GOVERNMENTAL SOURCES TO DETERMINE WHETHER A STATE GOVERNMENT ENTITY HAS AUTHORITY TO COMPETE WITH PRIVATE ENTERPRISE IN THE MARKETING OR PROVISION OF GOODS AND SERVICES. THE METHODS MUST INCLUDE A COST-BENEFIT ANALYSIS AND DOCUMENTATION OF THE STEPS TAKEN BY THE COMPLAINANT TO RESOLVE THE COMPETITION COMPLAINT WITH THE STATE AGENCY THAT IS THE SUBJECT OF THE COMPLAINT.
(3) THE COMMITTEE MAY RENDER NONBINDING OPINIONS ON THE MERITS OF COMPLAINTS BEFORE IT ON A CASE-BY-CASE BASIS. THE COMMITTEE'S OPINION IS A PUBLIC RECORD AND MUST BE BASED UPON THE COMMITTEE'S REVIEW AND EVALUATION OF INFORMATION IT OBTAINS PURSUANT TO SUBSECTION (2). THE COMMITTEE SHALL RENDER ITS OPINION WITHIN 90 DAYS AFTER PRESENTATION OF A COMPLAINT. THE TIME SPENT BY THE COMMITTEE IN EVALUATING A COMPLAINT DOES NOT TOLL THE LIMITATIONS PERIOD APPLICABLE TO AN ACTION UNDER [SECTION 2].
(4) THE COMMITTEE SHALL PREPARE A REPORT OF ITS ACTIVITIES EACH BIENNIUM AND DELIVER THE REPORT TO THE LEGISLATURE ON OR BEFORE NOVEMBER 15 OF THE CALENDAR YEAR PRECEDING A LEGISLATIVE SESSION. THE REPORT MUST INCLUDE THE COMMITTEE'S OPINIONS AND MAY INCLUDE RECOMMENDATIONS TO THE LEGISLATURE REGARDING THE REMOVAL OR CREATION OF STATUTORY AUTHORITY FOR STATE GOVERNMENT ENTITIES TO ENGAGE IN COMPETITION WITH PRIVATE ENTERPRISE.
Section 4. Section 20-25-108, MCA, is amended to read:
"20-25-108. Research programs -- powers of units -- DEFINITIONS. (1) The units of the system
are authorized may,
singly or in cooperation, to engage in research and development programs with the prior approval of the regents.
Such The research and development programs may be conducted by any department of a unit or any organization
established to assist the unit. A unit or organization may:
(a) contract with private organizations, companies, firms, or individuals relative to research programs;
(b) conduct research programs with the penal, corrective, or custodial institutions of Montana and engage the voluntary participation of the inmates with the prior approval of the governing board of the institution;
(c) accept contributions, grants, or gifts from private organizations, companies, firms, individuals, governmental agencies or departments for research programs;
(d) make agreements or cooperative undertakings with private organizations, companies, firms, individuals, OR governmental agencies or departments for research programs;
(e) match the funds of private organizations, companies, firms, individuals, OR governmental agencies or departments with available funds for research programs;
(f) accumulate, invest, and expend the funds and proceeds from research programs;
(g) acquire real and personal property reasonably required for research programs;
(h) not divert funds, proceeds, or real and personal property from the research programs;
(i) not engage in acts prohibited by [section 2(1)] unless specifically authorized by
statute LAW; and (i)(j) not charge or obligate the state of Montana or the general funds or a unit or agency.
(3) The legislature declares a public need for scientific research in the units of the system to promote the general welfare and to provide an adequate defense for the United States.
(4) AS USED IN THIS SECTION:
(A) "DEVELOPMENT" MEANS APPLYING RESEARCH TO THE CREATION OF A PRODUCT OR SERVICE AND TESTING THAT PRODUCT OR SERVICE IN THE MARKETPLACE; AND
(B) "RESEARCH" MEANS THE INVESTIGATION OF A FIELD OF KNOWLEDGE LEADING TO THE DISCOVERY OF FACTS AND PRINCIPLES."
NEW SECTION. Section 5. Effective
date DATES. (1) EXCEPT AS PROVIDED IN SUBSECTION (2), [ This THIS
act] is effective on passage and approval.
(2) [SECTION 2] IS EFFECTIVE JULY 1, 1999.