Montana State Fund is asking a court to declare unconstitutional legislation awaiting Gov. Steve Bullock’s signature that would impose a 3% “management fee” on the carrier’s investment portfolio, according to media reports.

Laurance Hubbard

The complaint filed with the District Court in Helena argues that state law prohibits legislative raids on any money the carrier collects, which includes money it has invested and income from the investments.

On the same day the complaint was filed, Judge Mike McMahan denied a request for a temporary restraining order, saying the carrier would not suffer any irreparable harm if forced to wait until a Dec. 4 hearing on a request for a preliminary injunction.

Bullock has yet to enact Senate Bill 4, a measure introduced by Sen. Ed Buttrey, R-Great Falls, which would assess a 3% management fee on the carrier’s portfolio administered by the state Board of Investments. The fee is projected to generate $29.7 million over the next two years to help close a $227 budget deficit.

The fee was part of the package of proposals the governor announced when calling a special budget session that ran for three days starting Nov. 14.

As soon as the proposal was in print, Montana State Fund President and CEO Laurence Hubbard questioned the legality of the fee. During an emergency meeting of the board of directors, Hubbard said the carrier would likely have to seek an injunction if the lawmakers passed the bill.

After the judge on Friday denied the request for a restraining order, Hubbard pointed out that the ruling did not address the actual merits of the complaint, according to a report by the Associated Press.

The governor’s office, however, took the judge’s ruling as an indication that the legal challenge will not succeed.

“We have serious concerns about the propriety of the lawsuit, and it appears the court feels the same way,” spokeswoman Ronja Abel said.

Judge McMahon’s decision questioned whether State Fund had a cause of action and said the carrier had not established “that it is likely to succeed on the merits of its claims” to warrant a restraining order.