Montana State Legislature

Understanding Constituent Services

Background

The 68th Legislature has passed HB 150 which amends 5-2-204, MCA. 5-2-204, MCA, provides for a stipend for legislators and/or allows reimbursement of constituent services expenses not paid from a constituent services account or otherwise reimbursed. The statute provides a primary $3,000 stipend or allowance for each legislator and a secondary amount of between $1,000 and $4,000 depending on the square mileage of a legislator's district, for districts over 100 square miles.

This gives legislators the option to choose how the primary $3,000 is distributed.

1. “Stipend” which is taxed:
   
   Taxation: this information is provided for discussion purposes only. A legislator should consult with their personal taxation specialist for the appropriate option for their purposes.
   
   The Internal Revenue Service requires an employee (legislator) to account for items of expense reimbursed by an employer to avoid the employee having to take the amounts as income on the employee’s income tax return. By adopting an accountable plan, legislators may be reimbursed for certain expenses incurred in performing legislative duties regarding providing services for constituents.
   
   The employer may elect to treat taxable fringe benefits as paid in a pay period, or on a quarterly, semiannual, or annual basis, but no less frequently than annually. IRS Ann. 85-113 The employer may elect to add taxable fringe benefits to employee regular wages and withhold on the total or may withhold on the benefit at the supplemental wage flat rate of 25%. There may be additional state taxes. Reg. §31.3402(g)-1; Reg. §31.3501(a)-1T.
    
2. “Allowance”
   
   If a legislator elects to receive an “allowance,” the legislator shall apply for reimbursement to the legislative services division by submitting written documentation (claim form, required receipts, etc.). While some of the reimbursement may still be taxed, certain reimbursements are not taxable with proper documentation and certain requirements met.

Primary Allowance

Allowable Expenses

The primary $3,000 may be used for providing constituent services which include, but are not limited to:

• Unreimbursed expenses for mileage, per diem (meals), or lodging
  • Mileage and meals do not require a receipt to be reimbursed
  • Lodging, air travel, and “other expenses over $25” require receipts
• The following are also reimbursable expenses, but individual requests over $25 require receipts:
  • Telecommunications or phone, internet, computer hardware and software
  • Postage
  • Education-related expenses

Secondary Amount

The law specifies that legislators must apply for reimbursement to the Legislative Services Division by submitting written documentation that satisfies applicable requirements of 2-18-5, MCA which apply to meals, lodging, and transportation for otherwise unreimbursed expenses related to the legislator’s expenses incurred for providing constituent services. The secondary amount is a variable amount that is determined by square mileage of district. Please click Constituent Services Secondary Reimbursement Amount by District to see if your district is eligible for a secondary amount (and applicable amount).

Requirements for Secondary Amount

Legislators may submit a claim form for reimbursement at any time prior to December 31, 2024. Depending on the type of claim, certain reimbursements may be taxable, for instance reimbursed meals for meetings that do not require an overnight stay.

• Constituent Services Secondary Reimbursement Amount by District
• Secondary Amount Claim Form

Rules for Reimbursement (Secondary Amount)

• Leadership approval is not necessary. The Legislative Services Division is responsible for review for type of expense, taxable status, and amount available.
• A legislator may request reimbursement for previously unreimbursed expenses for mileage, per diem, or lodging from the secondary amount.
• Legislators may not claim salary.
• Receipts are required for lodging and airfare.
• On any reimbursement form the legislator must indicate that these expenses were not reimbursed by any other legislative or state fund, organization, or a constituent services account provided for in 13-37-402, MCA.
• Accounts expire December 31, 2024.

 For more information about salary and compensation, contact Legislative Financial Services at (406) 444-4380.