_____________
bill NO. _____________
By Request of the ****
A BILL FOR AN ACT
ENTITLED: "AN ACT TRANSFERRING funds to montana
state fund; and PROVIDING AN EFFECTIVE DATE."
WHEREAS, section 39-71-2320, MCA, provides:
"All premiums and other money paid to the state fund, all property and
securities acquired through the use of money belonging to the state fund, and
all interest and dividends earned upon money belonging to the state fund are
the sole property of the state fund and must be used exclusively for the
operations and obligations of the state fund"; and
WHEREAS, section 39-71-2320, MCA, also provides:
"The money collected by the state fund for claims for injuries occurring
on or after July 1, 1990, may not be used for any other purpose and may not be
transferred by the legislature to other funds or used for other programs";
and
WHEREAS, section 39-71-2320, MCA, provides:
"However, state fund money must be invested by the board of investments
provided for in 2-15-1808, and subject to the investment agreement with the
board of investments, the earnings on investments are the sole property of the
state fund as provided in this section"; and
WHEREAS, in November of 2017, a special session
of the Legislature was called to address budgetary issues in the State of
Montana, and the State of Montana, through enacting Senate Bill No. 4, took
money being held in trust for policyholders of the State Fund for the state's
own utilization by enacting section 1 of Chapter 4, Special Laws of November
2017, to have the Board of Investments charge the State Fund an additional
management fee of 3%; and
WHEREAS,
no other state agency was assessed a management fee of 3% in Senate Bill No. 4;
and
WHEREAS, the State Fund had already paid
management costs to the Board of Investments for fiscal years 2017 and 2018 in
the amount of $2,085,278; and
WHEREAS,
the effect of charging a 3% management fee to the State Fund was the transfer
of $28.3 million of money held in trust of policyholders and to transfer it to
the state general fund; and
WHEREAS, the effect of this transfer immediately
reduced the amount of funding available for dividends that the State Fund would
otherwise return to policyholders and prevented it from reducing rates to policyholders;
and
WHEREAS, the State Fund was deprived of the
opportunity to invest the $28.3 million that was wrongfully transferred from
its accounts, thus causing it to lose investment earnings of $5,280,299 based
on the 5-year average rate of return on its invested assets; and
WHEREAS, the taking of state funds by charging an
exorbitant management fee as mandated by section 1, Chapter 4, Special Laws of
November 2017, represents a taking without just compensation; and
WHEREAS, the purpose of this legislation is to
address this wrongful taking.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE
OF MONTANA:
NEW SECTION. Section 1. Transfer of funds. (1) By August
15, 2023, the state treasurer shall transfer $33.58 million from the general
fund to the state fund account created by 39-71-2321 for claims for injuries
resulting from accidents that occurred on or after July 1, 1990.
(2) The
sum of the transfer represents the amount of the wrongful taking of state fund
monies and lost investment earnings caused by Chapter 4, Special Laws of November
2017.
NEW SECTION.
Section 2. Effective
date. [This act] is effective July 1, 2023.
INTRODUCED BY _________________________________________________