The topic of marijuana tax revenue has been in the news several times over the last couple of months, as the fate of Senate Bill 442 (SB 442) from the 2023 legislative session is still unresolved. SB 442 passed through both chambers during the legislative process but was vetoed by the governor on the last day of the session. However, the timing of the veto on Sine Die created confusion on whether or not the Legislature could override the veto.

Until the matter is resolved, SB 442 remains unsigned by the governor and therefore the effects of the legislation are not in law. The Legislative Services Division recently collaborated on an analysis of the present law distribution of the marijuana tax revenue allocation and what would change if SB 442 had gone into effect if a gubernatorial veto had never taken place, or if the Legislature were to override the veto.

SB 442 revises the allocation of marijuana tax revenue to include distribution to the Department of Transportation to fund county road construction and maintenance as well as revising some of the allocation percentages to the existing funds in 16-12-111, MCA. The analysis provided by Legislative Services explains the new revenue allocation authorized by SB 442 would occur beginning in fiscal year 2024, however, for illustration purposes, the analysis provides a distribution scenario based on fiscal year 2023 marijuana tax & fee collections to show the potential changes made by SB 442.

Looking specifically at the newly established County Roads fund, which was arguably the main reason for SB 442, the analysis provides tables showing how the fund is apportioned to each county and how each county’s contributions toward marijuana tax revenue compare with the respective county’s allocation of the County Road fund distribution. The analysis concludes with a hypothetical illustrative state map of marijuana tax revenue generation and County Road fund distribution under SB 442 using fiscal year 2023 data:

For the full analysis, click here, or visit the Economic Affairs Interim Committee’s marijuana committee topic page: https://leg.mt.gov/committees/interim/eaic/eaic-marijuana/

If you have questions on the analysis or would like additional information on the topic, contact committee staff: Erin Sullivan, Research Analyst