I-194 is dangerously overbroad
HELENA, Mont. – Today, the Frontier Institute issued a statement outlining the organization’s opposition to I-194, the ballot proposal known as the “Montana Plan” which would strip businesses and nonprofits of the legal power to speak about candidates and ballot measures.
“Under I-194, Montana businesses and nonprofits could lose their legal status for simply posting an opinion about a local property tax levy vote or ballot measure on Facebook. That’s wrong, and it’s dangerously overbroad. The government should not condition the right to exist as a company or a nonprofit on silence about elections,” said Kendall Cotton, president and CEO of the Frontier Institute.
I-194 would strip corporations, nonprofits, LLCs, unions, trade associations, and other “artificial persons” of the legal power to spend “money or anything of value” to support or oppose candidates, parties, or any state or local ballot issues, including local property tax levy votes. A violation forfeits the entity’s Montana legal privileges, including limited liability and the right to do business in the state.
Frontier Institute’s concerns with I-194 include:
- Overly Broad
- I-194’s extremely broad definition of “political spending power” threatens severe penalties for normal, organic speech. A social media post or a blog page is “anything of value.” A local hardware store posting on its Facebook page “vote no on the city tax levy” or a nonprofit like Frontier Institute posting “this ballot measure is poorly drafted” is, on the face of I-194’s language, an ultra vires act that triggers losing legal status.
- I-194 carves out “bona fide news, commentary, or editorial content” but does not define these terms or provide a way to distinguish “bona fide” commentary from “political spending”. The government will have extremely broad discretion to decide after the fact whether the hardware store’s tax levy Facebook post was “commentary” or an illegal political expenditure.
- I-194 is far broader than Montana’s existing campaign finance laws, which provide safe harbor for unpaid, organic communications about elections. Current law does not treat unpaid social-media posts as election communications and does not force reporting of de minimis activity (MCA 13-1-101; ARM 44.11.603–.605; COPP, Expenditures: Paid Communications; Hovland v. Arends; Nakamura v. Bozeman Tenants United). I-194 lacks the speech protections of a paid-versus-organic test or de minimis threshold.
- Lopsided Enforcement
- Montana-based businesses and nonprofits will face the most severe penalties from enforcement. The punishment is forfeiture of Montana charter privileges including limited liability, perpetual existence, and the right to do business in the state. That is an existential threat to a Helena nonprofit, a Kalispell LLC, or the local hardware store. It is a paper threat to an out-of-state corporation or national 501(c)(4) that spends on Montana elections without needing a Montana charter.
- I-194 itself admits it “does not purport to affect privileges conferred by the laws of another jurisdiction.” Montana simply cannot cancel a Delaware charter for an out-of-state 501(c)(4) that never registered in MT, owns no land, and only buys election ads. If the group has a Montana certificate of authority, the Secretary of State can try to revoke it. If it does not, the state’s remaining tool against this would be a lawsuit asking a court to stop further spending and make the group pay the state what it already spent, a case that can run for years after the election has already passed.
- The practical result of I-194 is that Montana-based businesses and nonprofits face dissolution-level risk for ordinary speech about a local property tax levy or ballot measure while the out-of-state election spenders can restructure and keep spending.
- Dangerous Precedent
- America’s founders understood that people have a natural right to associate: to join together in a business, a church, or a nonprofit and to speak as a group. But I-194 asserts that because the State of Montana issues the paperwork that legally recognizes an association, the state has the power to silence their speech. That is a dangerous expansion of government power.
- If I-194’s logic stands, there is no reason it stops at restricting “artificial persons” from doing anything else: operating a gun range, a church, a bookstore, or engaging in any other activity disfavored by the state.
- I-194 is not just a campaign finance rule. It is a dangerous claim that existence under the law is a privilege the government may condition on silence about elections.
