The supporter of a House bill that places a heavy tax on out-of-state money for initiated measure campaigns says the bill is needed to curb millions of dollars pouring into the state. However, one opponent says there’s a better way to limit outside money from influencing state matters.

House Bill 1452, heard by the House Finance and Taxation Committee Tuesday, is among a handful of bills this session that aims to alter the state’s initiative and referendum process.

Sponsored by Rep. Mike Motschenbacher, R-Bismarck, HB 1452 would impose a 90% tax on monetary contributions from a nonresident to support or oppose an initiated measure. Money collected would be split between a fund for veterans and a fund for school lunch programs.

“The biggest problem I have when I see out-of-state dollars being sent into North Dakota is we are letting these out-of-state interests use North Dakota as a punching bag,” Motschenbacher said. “The people that are spending these out-of-state dollars in North Dakota don’t have to sit in our state and live by the laws that they just passed. If they want to spend their money in their own states, that’s their prerogative. Go right ahead. But in my opinion, keep your dollars out of North Dakota.”

Motschenbacher admitted the bill needs amending at some point in the legislative process to eliminate loopholes, such as the inability to tax certain nonprofits. He also said he is aware such a law could be constitutionally challenged.

“But I’m willing to take on that fight,” he said.

Dustin Gawrylow with the ND Watchdog Network said the bill has First Amendment issues.

“I am opposing the idea of a tax on political donations and speech. I am not contradicting the idea that there’s not a problem,” he said of the money spent on measures in North Dakota in recent years. His research of campaign finance records showed more than $3.9 million in out-of-state funds spent on four measures, which excludes exempt nonprofit spending. The largest amount was $2.7 million toward promoting the 2016 Marsy’s Law measure.

Gawrylow said restricting out-of-state money should be a consistent policy, including candidate campaigns as well measures.

“If we want to talk about going to court and spending millions of dollars on a lawsuit, let’s do it in a way that actually tries to protect states’ rights, state sovereignty,” he said. He suggested doing that by requiring $1 of in-state donations for every $1 in out of-state contributions.

“We are just saying that we want North Dakota citizens and North Dakota donors to be on an equal dollar-for-dollar playing field,” he said. “If we’re going to go down the road of challenging federal law and challenging Supreme Court cases, let’s do it in a way that makes sense – that is fair and even-handed. This bill, as is, is simply a money grab and trying to tax speech.”

Other legislation includes House Bill 1230, which fines members of initiative and referendum committees up to $1,000 if found to have willfully submitted an invalid petition. A measure committee can be fined more than $10,000 and be banned from conducting business in the state for five years.

House Bill 2226 specifies the details required in language for proposed constitutional amendments. House Bill 1324 strengthens the position of the Secretary of State against legal challenges of decisions to keep measures off the ballot due to invalid signatures. It is in response to the legal challenge last year that overturned Secretary Al Jaeger’s decision to keep a term limits measure off the ballot.

Senate Concurrent Resolution 4013 requires petition circulators for constitutional measures to be voters who have lived in the state for at least 120 days. It would be illegal to pay a petition circulator. The measure would have to go on a general election ballot and be approved by at least 67% of voters rather than the current 50%.