The idea for a trust was based on the failed attempt to create a MSA health care trust fund in SB 323 in the 1999 legislative session, and Montana’s coal tax trust fund . The proposal would place 50% of the MSA proceeds into a trust, and the Legislature could only spend the principal of the trust with the approval of three-fourths majority of each chamber of the house.The health groups wanted to establish a trust fund because they believed that there would be attempts in future legislative sessions to raid MSA money for non-health related government programs.Legislators who spoke with reporters in October 1999 also agreed that the MSA money would be a target for future funding. Senator Dorothy Eck , who agreed that lawmakers would continue to spend MSA money on non-health related programs, told reporters that “[t]he political reality in this state is unless it’s in a constitutional trust, it won’t survive.”Representative John Cobb , who was actually opposed to creating the trust, also told reporters that it might be the only way to ensure that the MSA money is used for health care and tobacco prevention.To place the initiative on the ballot, the health groups would need to collect at least 40,000 voter signatures, and members estimated the cost of the campaign to get the initiative on the November 2000 ballot would be between $75,000 and $100,000, and an additional $150,000 to campaign for the initiative once it was on the ballot.In January 2000, Gov. Marc Racicot told the press that he was not yet ready to endorse the proposed ballot measure, explaining that though he liked the idea of a constitutional trust, he preferred setting aside 40% the MSA money into the trust and requiring a two-thirds approval by the legislature before being allowed to spend the principal .
The coalition’s proposal would put $427.5 million into a trust fund by 2025 and allow spending of $528.2 in interest earnings by 2030, customizable shelving while under the version preferred by Racicot, $342 million would be put into the fund and would allow spending of $422.6 in interest earning.Mick Robinson, Chief of Staff for Gov. Racicot, explained that the administration was worried about dedicating too much of the MSA money to the trust fund, which might not leave enough money for the state to meet more immediate budget needs that came up over the next quarter century.Racicot did not express a definitive position on the trust fund proposal, saying he wanted to think about the proposal more, and see a copy of the proposed initiative , before deciding whether to support it.Jim Ahrens, a spokesman for the coalition, said that members felt strongly that the 50% of MSA money should be deposited into the trust, but that the size of the legislative vote to approve spending from the trust’s principle was negotiable. Despite the difference of opinion on the specific numbers, Ahrens added that he was glad to hear Racicot favored a constitutional trust fund, instead of one created by a law that can be easily changed by the whims of future legislatures.On April 3, 2000, the Secretary of State approved the petition for the trust fund initiative prepared by the health groups, Constitutional Initiative 82. The health groups would next need to gather 40,000 signatures, which had to include 10 percent of the registered voters in 40 of the 100 House districts, by the June 23, 2000 deadline in order for CI-82 to be placed on the November 2000 ballot.The initiative, now changed to fit more with Gov. Racicot’s version of the proposal, would ask Montana voters to amend the state constitution to direct 40% of the tobacco settlement into the trust fund.
Under the terms of the revised initiative, the Montana Legislature could appropriate 90 percent of each year’s interest from the trust fund for health care programs.The principal of the trust could only be spent if two-thirds of the members of each house voted to do so.The health group coalition backing the proposal formerly organized themselves as a ballot issue committee , “The Alliance for a Healthy Montana” . AHM was made up of several health group organizations and individual contributors that provided services and financial support for the initiative campaign. By April 2000, the trust fund proposal was receiving public endorsements by Governor Racicot, as well as from the Governor’s Advisory Council on Tobacco Use Prevention.On April 18, 2000, Gov. Racicot signed the petition to put CI-82 on the November 2000 ballot,148 and told reporters that “I strongly urge Montanans to sign this petition and to take part in the electoral process.” Gov. Racicot added that “this trust fund will provide funds for not only this generation, but also for generations of Montanans in the future. It’s the kind of neighborly thing Montanans so typically do for one another.”Jim Ahrens, President of the Montana Hospitals Association who also chaired the AHM, stated that he believed that the governor’s endorsement was critical to the success of the initiative.On May 9, 2000, during a special session of the legislature, Sen. Bob Keenan , revealed a draft proposal to put a constitutional initiative on the November 2000 ballot, which would ask voters to place 100% of the MSA payments into the federal-state Medicaid insurance program.Under Keenan’s proposal, Montana would contribute $30 million to Medicaid, which would generate $78 million dollars in federal matching funds.
Keenan reasoned that the plan generated the best financial return for Montana – a total of $108 for Medicaid.Democrats, however, were immediately against Keenan’s Medicaid trust-fund proposal for two reasons. First, they expressed that the proposal would eliminate CI-82, which was in the signature gathering phase. Second, Democrats believed that if Keenan’s proposal passed, Republicans would divert state money usually used for Medicaid, replace it with MSA money, and then use the diverted money for non-health related programs, such as highways and tax relief.Democrats wanted to safeguard CI-82 as well as maintain past levels of state contributions to Medicaid, and therefore intended to have Keenan’s proposal delayed until the 2001 regular session. Democrats explained that in the full 2001 Legislature, they would have more time to debate and consider proposed amendments. As a result of the negative reaction from Democrats, Keenan would quickly revise his proposal in the hope that it could gain broader support from both the House and Senate.In response to the opposition against his proposal, vertical farming systems Keenan presented what he described as two complimentary bills – Senate Bill 12 and Senate Bill 13.Senate Bill 12 was the revised version of the Medicaid trust fund proposal, and would ask voters in the November 2000election to amend the state constitution so that 40% of the MSA money be dedicated to the Medicaid program. Senate Bill 13 duplicated the CI-82 ballot measure exactly as the Alliance for a Healthy Montana had proposed it, dedicating 40% of the state’s MSA money to a permanent trust fund, with the interest being used for health care and tobacco use prevention programs.A hearing for both SB 12 and SB 13 was held before the Senate Finance and Claims Committee on May 10, 2000, with proponent testimony coming from member organizations of the AHM. No testimony was presented in opposition to either bill.Jim Ahrens, Executive Director of AHM, in supporting SB 12, stated that Medicaid funding was essential because health care facilities, such as hospitals and nursing homes, employed about 18,000 Montanans, with a yearly cost in wages of about $500 million a year. Ahrens then testified in support of SB 13, and told the Senate Committee that the AHM would abandon its petition drive and devote its efforts to November passage of SB 13 if it was approved by the Legislature.Rose Hughes, Executive Director of the Montana Health Care Association, told the Senate Committee that her organization supported SB 12 because the state Medicaid programs had been underfunded for years and that medical facilities in Montana had not been adequately paid to provide care.In support of SB 13, Hughes testified that her organization “would be happy not to be out on the streets with our petitions if [the legislature] go ahead and refer this directly to the people.”
In addition to the health groups, representatives from state agencies also expressed their support for SB 12 and SB 13. At the Senate Committee hearing for SB 13, Deputy Attorney General Beth Baker told the Senate Committee that the Montana Department of Justice was committed to the goals of reducing tobacco use and public health problems caused by smoking. Furthermore, Baker told the Senate Committee that Attorney General Mazurek had long supported allocations from the MSA for public health programs.Attorney General Mazurek himself told reporters that the two bills “were critical components to address the [health care] goals of the settlement.”Both SB 12 and SB 13 received unchallenged support throughout most of the legislative hearing process before facing a vote by the full House. On May 10, 2000, both SB 12 and SB 13 were approved by the Senate Finance and Claims Committee, both by a vote of 16 to 1. Each bill was then approved by the full Senate – SB 12 passed by a vote of 50 to 0, and SB 13 passed by a vote of 45 to 5.Both were referred to the House Human Services Committee for a hearing on the next day, May 11, 2000.Member organizations of the AHM again expressed their support before the House Committee, with no opposing testimony being offered.The House Committee approved both bills , which were then sent to the full House for a vote.Once the two bills reached the full House on May 11, 2000, SB 12 would meet heavy resistance from representatives, while SB 13 would be approved. Though SB 12 had overwhelming support early in the hearing process, Democrat and Republican House members began to question the amount of money that would be tied up by both of the trust proposals. House Speaker John Mercer told members that “[i]t would restrict the things the next Legislature could do.”House members felt the state could not afford to dedicate 80% of the MSA payments, leaving only 20% for the general fund, because too little would be left for unpredictable cash needs in the next two years.Thus, without strong backing from either the Democrats or Republicans, SB 12 was defeated in the House 74 to 24.On the other hand, SB 13 had strong backing from Democratic legislators, the Republican Governor, the State Attorney General, and multiple state health groups.Furthermore, the health groups had pushed their trust fund initiative into the media’s attention during their original petition drive for CI-82. Thus, SB 13 was approved in the House by a vote of 69 to 24, and would be placed on the November 2000 ballot as Constitutional Amendment 35 .In addition to strong support from Governor Racicot’s administration and Democratic legislators, CA-35 proved to be popular with the electorate. Telephone polls conducted between May 22-24 by Mason-Dixon Polling and Research, Inc. of Washington, D.C. for the Lee Newspapers of Montana questioned 620 likely voters about all the initiatives on the ballot for the November 2000 election.When asked about CA-35, 76% of the respondents said they supported the trust fund, 11% were opposed, and 13% were undecided. The poll’s margin of error was 4%.158 Voter support for CA-35 continued in the months leading to the November election. Another Mason-Dixon telephone poll conducted for Lee Newspapers between September 21-23 questioned 625 registered voters about November ballot initiatives. When asked about CA-35, 62% of the respondents supported the trust fund, 22% were opposed, and 16% were undecided.Newspaper coverage of CA-35 focused on the main proponent and sponsor of the initiative, Senator Bob Keenan, and Senator Ken Miller , who became a vocal public opponent of the initiative In addition to receiving financial contributions from the tobacco industry, a May 9, 2001 letter from Senator Miller to Roger Mozingo, Vice President for State Government Relations at R.J. Reynolds, demonstrates that a continuing relationship existed between Sen. Miller and R.J. Reynolds.