House Bill No. 534

Introduced By wells, bitney

A Bill for an Act entitled: An Act making the state liable for interest and attorney fees in a judgment involving a contract; amending

sections 2-9-317 and 18-1-404, MCA; and providing an immediate effective date.

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 18-1-404, MCA, is amended to read:

"18-1-404.  Liability of state -- limitations -- costs. (1) (a) The state of Montana shall be is liable in respect to any contract entered into in the same manner and to the same extent as a private individual under like circumstances, except the state of Montana shall is not be liable for interest prior to or after judgment or for punitive damages.

(b) The state of Montana is liable for interest from the date on which the payment on the contract became due. For purposes of this section, the interest rate is 10% simple interest each year, whether due before or after a judgment. If the contract does not specify when interest is payable before a judgment, interest must be paid at the time provided in 17-8-242(2).

(2)  Costs may be allowed as provided in 25-10-711. In all other cases, costs shall must be allowed in all courts to the successful claimant to the same extent as if the state of Montana were a private litigant,. except that such The costs shall must not include attorney's attorney fees.

(3) This section does not apply to a contract governed by Title 19."

Section 2.  Section 2-9-317, MCA, is amended to read:

"2-9-317.  No interest if judgment paid within two years -- exception. If Except as provided in 18-1-404(1)(b), if a governmental entity pays a judgment within 2 years after the day on which the judgment is entered, no penalty or interest may be assessed against the governmental entity."

Section 3.  Effective date. [This act] is effective on passage and approval.