House Bill No. 500

Introduced By _______________________________________________________________________________

A Bill for an Act entitled: "An Act prohibiting government entities from competing with private enterprise; providing definitions and exceptions; providing for restraint of government entity actions in competition with private enterprise unless specifically authorized by statute; amending section

20-25-108, MCA; and providing an immediate effective date."

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], 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) the operation or management of state parks, historical sites, or trails;

(ii) industries located at state correctional facilities;

(iii) a function of the state department of justice; or

(iv) a function of the legislative or judicial branches 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 authorized by statute.

(2) A private enterprise against which a state government entity is competing in violation of this section may bring a civil action in accordance with Title 27, chapter 19, in the district court of the county in which the private enterprise is located for restraint of the violation. A private enterprise that substantially prevails in an action brought pursuant to this section may also recover its costs and reasonable attorney fees.

Section 3.  Section 20-25-108, MCA, is amended to read:

"20-25-108.   Research programs -- powers of units. (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.

(2)  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, governmental agencies or departments for research programs;

(e)  match the funds of private organizations, companies, firms, individuals, 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; and

(i) not engage in acts prohibited by [section 2(1)] unless specifically authorized by statute; 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."

NEW SECTION. Section 4.  Effective date. [This act] is effective on passage and approval.

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